HDFC expects banking sector to grow SME in next 3 to 5 years

The bank has planned a leverage in its distribution to non-urban markets and digital strengths to expand its SME banking platform

India’s biggest private lender HDFC Bank plans to grip its distribution in non-urban markets and digital strengths to expand SME banking platform, was said by management to its analysts.

The management mentioned to analysts that recent changes in the management structure were aimed to facilitate a far more focused approach towards execution in this vertical and Rahul Shukla will drive growth in the business. The bank expects that, the SME business to be the fastest-growing segment over the next three to five years.

It also mentioned that, “the bank is cognizant of the asset quality risks associated with this segment and hence will keep underwriting and collection teams tighter.”

In the month of  April, HDFC Bank announced the  internal reorganization that would see it form three distinct focus areas, namely, business verticals, delivery channels, and technology. It was named as, Project Future-Ready.

Jagdishan mentioned that “On the client side, the bank is largely comfortable as 85 per cent of retail clients work with corporates rated AA and above, where job losses have been low, SMEs were better prepared than in the past, and larger corporates have better liquidity in their balance sheet.”

He told to analysts that, bank has taken a cautious view over the past one to one-and-a-half months in the light of COVID-19 and its impact on staff and clients.

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