Strategy employed by India’s top 5 Banks and breakup of their loan books.

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In this article, we will look at the strategy employed by India’s top 5 biggest banks (HDFC Bank, Kotak Mahindra Bank, State Bank of India, Axis Bank and ICICI Bank), the break-up of their loan books, areas of concern and much more!

First of all, let’s look at the split of their loan books –

Data of Kotak and SBI has been taken from investor ppts. For the other 3 banks, taken from a brokerage report.

From the above, we notice that Retail and unsecured lending was the growth lever for a lot of banks in terms of either fee income. We also notice that unsecured lending forms a good part of the total loan book for a few players.

Let us see how the Banks performed and which part of the loan book they grew the most in Q3 –

Axis Bank – It reported a 39% increase in Credit card loans, a 43% increase in Auto loans and a 39% increase in personal loans. The growth in secured lending is far lower.

ICICI Bank – It reported a 51.3% growth in personal loans, a 42.8% increase in credit card loans! In a slowing Auto industry, the 2W loans grew at 49.6%, and CV loans at 15.4%!

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HDFC Bank – Auto Loans did not grow. Personal Loans grew by nearly 20%. CV loans did not grow. Credit Cards grew by nearly 30%. Gold loans did not grow. Bank has warned repeatedly on retail Asset quality.

Kotak Mahindra Bank – Corporate Banking did not grow, . CV portfolio grew a little bit. Small Business, Personal Loans, Credit Cards did not grow. This places it in complete contrast to Axis/ICICI. Note:-Kotak sits on a CET-1 ratio of 17.7% which is one of the highest in the Banking industry!

Kotak Mahindra Bank had repeatedly warned on unsecured exposure & has slowed down the Auto book.


With the alarm bells going off in unsecured lending right now, time will surely tell us if the players who grew their auto and unsecured lending did good underwriting or not.

Disclosure – Please do not construe this article as a piece of investment advice. It is written simply for educational purposes.

This is the second article on my banking series. Next article I will cover everything you need to know about a bank, all its terminologies, and meanings. Post that I will start a series of articles on the NBFC Sector.

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Aditya Shah

Aditya Shah

Aditya Shah is a SEBI-Registered Investment Advisor. He is the founder of Hercules Advisors that invests for the long term in high quality publicly listed Indian companies at reasonable valuations.
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