India Retail Banking: Opportunities and Risks to 2023

India Retail Banking: Opportunities and Risks to 2023

Summary

Based on our proprietary datasets, this report analyzes the Indian lending market, with a focus on the consumer lending segment. The report discusses in detail the credit card, personal, and mortgage loan markets, covering market size, competitors’ market shares, and survey insights. The report also provides a market overview and insights on the retail deposit segment. In addition, it covers the key digital disruptors in India’s retail lending segment.

Total loan balances outstanding (including credit card balances, personal loan balances, and residential mortgage balances outstanding) in India recorded a compound annual growth rate (CAGR) of 17.5% during 2014-18 to reach INR22.2tn ($319.1bn).

The majority of loan balances outstanding are from home loans, with residential mortgage balances outstanding accounting for 52.2% of total balances in 2018, followed by personal loans (43.8%) and credit cards (4%). Poor business sentiment, declining consumer confidence, and the growing unemployment rate are likely to impact the growth of total loan balances outstanding in the coming years.

As a result, we estimate total loan balances outstanding to record a subdued CAGR of 11.3% over 2019-23. The Indian lending space is dominated by State Bank of India (SBI), HDFC, and ICICI Bank. But these banks are facing increased competition from non-banking financial companies (NBFCs), digital banks, and digital lending platforms breaking into the market, offering faster and hassle-free loan approvals.

The savings market in India recorded a CAGR of 9.8% over 2014-18 to reach INR78.2tn ($1.1tn) in 2018. The market grew at a lower rate compared to loan balances during the five-year review period, but is improving amid a weak economic scenario. Indians are inclined to save more than spend as consumer confidence is dipping.

Scope

• Mortgage balances in India grew by 19% in 2018, the highest annual growth rate of the review period.
• The personal loan market in India recorded a CAGR of 17.7% during 2014-18. Although personal loan balances increased by 12.4% in 2018, this was almost half the 22.2% growth registered during 2017.
• Credit card balances recorded a CAGR of 30.5% during 2014-18, driven by the increasing popularity of credit cards for e-commerce purchases in India.

Reasons to buy

• Make strategic decisions using top-level historic and forecast data on the Indian retail lending industry.
• Identify the most promising lending segment.
• Receive detailed insights into lending in India, including consumer lending.
• Understand the changing market and competitive dynamics by learning about new competitors and recent deals in the retail lending space.
• Receive comprehensive coverage of the retail deposit market in India.