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
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
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)