Private sector lender HDFC Bank, which has a wholesale loan book of ₹3.5 lakh crore as on September 30, 2018, believes that there has been an improvement in the credit demand of companies, but big-ticket private capex is yet to kick in.

Kaizad Bharucha, Executive Director, HDFC Bank, said credit demand of companies has improved from single-digit growth last year to 14.4 per cent at present, with better capacity utilisation and growing requirements for working capital.

“We have seen some sectors continuing to do well – auto ancilliary, transmission, roads, food processing and healthcare,” he told BusinessLine , adding that big-ticket private capex kicking in is yet to be seen.

Access to formal credit

Similarly, demonetisation and Goods and Services Tax (GST) have also created an opportunity for smaller businesses to access formal credit.

“There was a bit of disruption when it got implemented but after that it has created a good opportunity for SMEs to access formal credit, which they can now get through GST returns and access a wider bouquet of banking facilities,” he said.

Bharucha, who is responsible for wholesale banking at HDFC Bank, said the lender’s loan book on a combined annual basis, has grown by 20 to 22 per cent in the last three to five years.

Domestic wholesale loans amounted to 45 per cent of its total loan book as on September 30, 2018. Explaining the bank’s strategy in wholesale banking, Bharucha said it is not focussing on any particular segment or sector, but has a diversified book.

“We have had a steady run over the last few years and have seen healthy growth from each of the verticals in wholesale banking,” he said, adding that the lender has leveraged its geographic presence, focussed on digitisation in the wholesale segment, and has a good turnaround time.

“This has led to differentiated experience, and we have been able to gain a bit of market share and a higher share of the customer wallet,” he said.

Interest rates

He also expects interest rates to continue on a rising trajectory, and the dollar-rupee volatility to continue for some time but will be range-bound.

“We have seen an increase in interest rates over the last several months. Looking at various parameters, we are directionally, in an interest rate scenario which will rise. However, the exact timing of the rise will be data and event dependent,” he said.

HDFC Bank shares fell 0.7 per cent on Thursday and closed at ₹2,005.45 apiece on the BSE.

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