Seeing a mix of pent-up and festive demand, says Sumit Bali of Axis Bank

Private sector lender Axis Bank, which has witnessed robust retail spends and demand ― higher than pre-Covid-19 levels in many segments ― believes that the trend will continue until the year end, following which much would depend on the news on the vaccine development front.

“Right now, we are seeing a mix of pent-up and festive demand. In December again, we will see a lot of people travelling and going on holidays. If the news flow on the vaccine continues to be positive and availability is there in reasonable sight... that would give comfort to people to go out and spend,” said Sumit Bali, President and Head, Retail Lending and Payment, Axis Bank.

He is confident about the growth prospects ahead.

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“We will continue to grow the retail book, which is profitable. There was some pain this year due to low growth and moratorium, but the pace of growth will keep improving. Ideally, we would like to maintain a 50-50 split between corporate and retail books,” he said.

In an interaction with BusinessLine, Bali, who joined Axis Bank earlier this year, said the lender has been registering month-on-month growth in both disbursements and collections.

“Collections on the secured product side is back to the pre-Covid-19 level and is looking good. The unsecured segment is also improving month-on-month,” he noted.

In terms of disbursements, Bali said segments including mortgages ― home loan, loan against property, and affordable housing ― along with small business banking and loans for cars, two-wheelers and commercial vehicles, have been growing.

“On all our secured businesses, we are higher than pre-Covid level,” he said, adding that the bank has been moderating the pace of growth for personal loan, cards, and unsecured business instalment loans.

“We are also calibrating business growth and want to be sure as to how the data is emerging post moratorium getting over. October gave us some more confidence over September; November is similar,” he said.

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The lender has registered strong growth in credit card spends.

Categories like hotels, travels and restaurants that were almost nil in the initial months after the pandemic are also registering activity.

“Our sense is that post Diwali, there will be a lull for 10 to 15 days after which the year-end rush for holidays will start. Customers are back to travelling. December is likely to be a good month. The only piece missing would be overseas spend, but besides that almost everything is back,” Bali said.

In its second quarter results, the bank had reported that card fees and retail loan processing fees had recovered with 76 per cent and 237 per cent quarter-on-quarter growth reflecting sequential pick-up in spends and disbursements.