In the three months to September 2018, retail loans grew 21% y-o-y on the back of 28% growth in live accounts, crossing 107 million accounts. However, banks reported a drop in average ticket-size because of the change in loan mix towards short-duration consumer loans like credit cards, personal loans and consumer durable loans.
Credit growth has picked up from record lows as the banking system shook off the impact of demonetisation. Lenders are increasingly focusing on retail lending because of rising non-performing assets in commercial lending.
Tier-I cities like Mumbai, NCR, Chennai, Kolkata, Bengalure, Pune and Ahmedabad account for about 50% of outstanding loans. The average retail lending balance is Rs 7 lakh. A Kotak Institutional Equities Research report shows mortages says delinquency rates have declined or remained stable across products, barring loan against property where it has increased to 3% of loans.
Mortgages grew 18% y-o-y as of Q2FY19, led by 11% volume growth and 6% growth in average ticket size. The share of housing finance companies is at 50% and the average ticket-sizes for public sector banks, non-banking financial companies and private banks were at Rs 18 lakh, Rs 24 lakh and Rs 34 lakh, respectively.
Personal loans grew 35% y-o-y led by a 26% volume growth and 6% growth in average ticket-size. Credit card receivables grew 35% y-o-y led by a 32% volume growth and 3% growth in average balances.