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Corporate credit is growing faster, but banks may not earn more from it

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Corporate credit is growing faster, but banks may not earn more from it

Corporate credit is growing faster, but banks may not earn more from it

The faster growth in corporate advances points to stronger demand, but whether it improves bank profitability depends on pricing, risk and the cost of funding.

I hold new banknotes, symbolizing financial growth, with a modern bank and muted cityscape behind me.

Axis Bank's corporate advances grew 34% year on year in Q2 FY27, against 25% growth in SME loans and 16% in retail advances.

ICICI Bank's domestic corporate portfolio expanded 30.6%, while HDFC Bank's corporate and other wholesale loans grew 16.4%.

Corporate lending offers scale and potentially lower servicing costs, but competition for large borrowers can compress lending spreads.

Corporate versus retail profitability depends on risk adjusted returns after funding costs, operating expenses, credit losses and capital requirements, not loan growth alone

Corporate lending is growing faster than retail credit at three of India's largest private sector banks, but the acceleration does not establish that corporate loans are more profitable. Axis Bank's corporate advances rose 34% year on year in the September quarter of FY27, against 25% growth in small and medium enterprise (SME) loans and 16% in retail advances. ICICI Bank's domestic corporate portfolio grew 30.6%, while HDFC Bank's corporate and other wholesale loans expanded 16.4%. Retail loan growth was slower at both lenders, at 14.8% for ICICI Bank's retail and rural portfolio and 11.7% for HDFC Bank. Advt

65 lakh crore. 5%. The figures indicate that the acceleration extends beyond large corporate borrowers to smaller businesses, although growth rates differ by lender and portfolio definition.


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