No risks to consumption story yet, says HDFC Bank

Mumbai: 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, said. 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 added.

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 Industry’s 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%.

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