EY India Banking Update

Enlisted are the critical insights and takeaways for July – Sep’23 :

• FY23 banking system credit was up 15% YoY with private and PSU banks growing at 18% and 14% respectively. However, the deposit growth remain modest – 9.5% in Sept 2022
• PSBs are aggressively gaining credit market share on an incremental basis with ~53% share. Private banks contributed 47% to incremental credit share while foreign banks contributed <1%.
• The top five PSBs mobilised a total of Rs 8.43 trillion in deposits in FY23. The rise in deposits can be attributed to the large branch network and growing partnerships of PSU banks with third party players, including business correspondents and fintech.
• There are some anecdotal signs of private capex coming back.
• Rise in policy rates led to faster repricing of loan yields across banks in FY23
• Overall, FY2023 has been encouraging, with sustained momentum in growth, expansion in margins, below average NPL formation and one of the best years for return ratios.

Download the report to know more on key trends and insights on Indian banking sector.