HDFC bank says no risks to consumption story yet


MUMBAI, Aug 25: Largest credit card issuer HDFC

Bank feels the consumption story is still on and will keep

growing the unsecured lending business going forward.

The largest private sector lender said the quality of

itscredit card portfolio is not yet affected by the broader

economic realities and the stressed part is half that of the

industry average.

The comments come amid times when a fall in

consumption, one of the primary drivers of the unsecured

credit card segment, is being blamed for the deepening

slowdown across the economy.

Even when the broader economy is in great shape, you

will have some parts under stress. Consumption story is still

on, Parag Rao, the banks country head for payment products,

told PTI here over the weekend.

However, he was quick to acknowledge that there is a

slide in auto sales, but added this does not mean that the

overall consumption story is down in the dumps.

High capex over the past six-seven years has resulted

in a plateauing of growth, which is not akin to a fall, he


When asked about the delinquency rates, he said the

bank has always been assessing risks in a defined way and

putting in adequate systems in pace to ensure lowest

delinquency rates.

The banks delinquency rates are half of the

industrys average, he claimed without quantifying the same.

An industry source said average overdue for over 30

days for the cards industry stands at 4-4.5 percent.

Rao said only a fourth of its credit card user base is

new to the bank, while others are existing relationships which

ensures lower delinquency.

The bank, which launched a new proposition to the

millennials over the weekend, is aiming to keep growing the

unsecured book, Rao said.

When asked if it has the sufficient headroom to grow,

he said it is comfortable from the board-approved portfolio

levels perspective to grow this business.

The bank has a portfolio of 1.27 crore card

outstanding as per the RBI data for June.

Its credit card outstanding had stood at RS 49,253

crore as of the June quarter, and had grown both year-on-year

and sequentially. (PTI)