Axis Bank expects growth in personal loans to continue

Private sector lender's personal loans segment grew 28% y-o-y to 265,083 crore as on 31 Dec

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Private sector lender Axis Bank believes it will be able to sustain its current growth in personal loans with the quality of the credit portfolio remaining healthy, a senior executive said on Tuesday.

Personal loans-a category of unsecured loans where the Reserve Bank of India (RBI) has been warning of exuberance-grew 28% year-on-year (y-o-y) to 65,083 crore as on 31 December. In comparison, ICICI Bank and HDFC Bank witnessed a 37.3% y-o-y and 10.3% y-o-y growth in personal loans.

Sumit Bali, group executive and head of retail lending at Axis Bank, said that over 80% of customers in the personal loan segment are existing ones and the bank has quite a bit of their banking history. Such data on past transactions help banks make better credit decisions. To be sure, the share of existing bank customers in personal loans is higher than in segments like loan against property (76%), auto loan (65%), and home loan (57%), besides others.

The bank's total advances grew 22% y-o-y to ₹9.32 trillion as on 31 December. Retail loans, a subsegment of the overall advances, rose 27%y-o-y.