Q1FY20 result: HDFC Bank sees massive growth in credit cards, home and personal loans; EMIs get cheaper

While HDFC Bank continued to book profit in its financial audit report even in June 2019 (Q1FY20) quarter, the key highlight of the result was lending pattern. Interestingly, in this quarter, the lender saw just 17.1% increase in their total advances to Rs 829,730 crore compared to a year ago in the same period. Among the total, retail loans and wholesale loans grew by 16.5% and 19.6% respectively. For a HDFC Bank customer, retail loans are of significant importance as they come as a helping hand during financial emergency. Retail loans include smaller ticket size to big ones like home loans, personal loans, car loans, two-wheeler, credit cards, gold loans and much more. 

Surprisingly, HDFC Bank’s retail loan segment was led by massive borrowings via credit cards followed by personal and home loans. Growth in these three lending product was above 24% on a y-o-y basis. Interestingly, to make such loans even more attractive the lender has already brought down interest rates since this month making many EMIs cheaper. 

In its financial audit report, HDFC Bank revealed that it was credit card lending which turned out to be top performer in advances with growth of 28.77% to Rs 49,523 crore in Q1 compared to Rs 38,458 crore a year ago same period. 
At present, HDFC Bank credit card interest rates are upto 3.4% per month. But the interest rate may be adjusted based on your relationship with the bank and the use of the card. If you have a stellar record in making payments on time, you could be charged a lower rate.

Going forward, the second best lending was derived from home loans, as the bank recorded a jump of 26.68% to Rs 55,769 crore in Q1FY20 versus Rs 44,021 crore in the corresponding period of the previous year. 

From July 15, 2019 effect, the lender’s home loan upto Rs 30 lakhs has seen interest rates between 8.55% to 9.05% for salaried women, while between 8.70% to 9.20% is set for non-salaried women. As for others' category, the home loan interest rate are imposed at 8.60% to 9.10% salaried class and 8.75% to 9.20% for non-salaried. In case of loan above Rs 30 lakh but upto Rs 75 lakh, the interest rate ranges from 8.80% to 9.45% for women borrowers and 8.85% to 9.50% for others category. The home loan interest rate is levied between 8.85% to 9.50% on women borrowers for their amount above Rs 75 lakh, while the same loan amount has 8.90% to 9.55% rate on others category. 

Meanwhile, personal loans also did not fail to cheer HDFC Bank’s lending performance, as the product registered growth of 24.75% to Rs 97,148 crore in Q1 as against Rs 77,868 crore in June 2018 quarter. For opting a personal loan at HDFC Bank, the lender levies interest rate between 15.50% to 21.50%.

Not only the above three lending product, but HDFC Bank saw across retail segment robust growth. In commercial vehicle segment, the lender posted a growth of 17.61% yoy, followed by 10.89% and 10.60% growth in business banking and Kisan Gold card respectively. However, single-digit growth was witnessed in lending products like auto loans, two-wheelers, gold loans and loan against securities as they rose by 5.48%, 9.14%, 2.27% and 1.83% on yearly basis. 

HDFC Bank in its audit report said, "Advances to the vehicle loan segment, where sales volumes have seen some moderation, grew at 8.3% over the previous year."