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If the home loan portfolios of major banks, as reflected in the first quarter numbers, is any indication, Covid-19 has not deterred home buyers.
A comparative analysis of housing loan data of banks for the first quarter shows a significant increase ranging from six per cent to about 14 per cent compared with the corresponding quarter of the previous fiscal.
For State Bank of India, the home loan portfolio increased 11 per cent to ₹5,05,473 crore in the first quarter of the current fiscal ended June 30, 2021, constituting 23 per cent of the bank’s total domestic advances compared with ₹4,55,443 crore in the year-ago period. That Covid did not impact demand for home loans is also evident from the fact that in the previous year (FY20-21), SBI posted only a 10.72 per cent growth in the segment.
SBI is not alone. Canara Bank’s home loan portfolio, too, increased 13.15 per cent during the period at ₹65,136 crore. In the previous year, the growth in portfolio was only 10.6 per cent. Punjab National Bank is also in the same league as it registered a 6.1 per cent growth.
Key drivers
On what drove the surge in home loans, a senior SBI official said: “Bank employees braved the pandemic and processing of loan applications and disbursal were not adversely impacted. In the absence of corporate loan growth, there has also been greater focus on retail loans, of which home loans constitute a major chunk.’’
Sanjiv Chadha, Managing Director & CEO, Bank of Baroda, said: “Home loans are growing pretty much as per market.’’ During the pandemic times, home loans, along with gold and car loans, are seen as ‘very safe’ for business, say bankers.
The growth in home loans will be sustained in the current year too, say analysts. Banks are also stepping up efforts to sustain the growth.
SBI has sharpened its focus on housing loans. As part of its ‘Monsoon Dhamaka’ offer, it announced a 100 per cent waiver on processing fees till August 31. Before the offer, the processing fee was 0.40 per cent.
Other banks are also gearing up to woo customers with special offers for the coming festival season.
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