How did Indian banking sector fare in September 2023?

The Indian banking sector saw vibrant growth in September 2023, suggests a report by Kotak Institutional Equities. PSU banks, regional private banks, and capital market players were the top segments. Central Bank of India's stock surged by 46 per cent.

Bank NIFTY, the index that covers banking stocks, rose by 0.2 per cent. Axis Bank (AXSB) went up by 6 per cent and State Bank of India (SBIN) rose by 4 per ent. However, ICICI Bank (ICICIBC) fell by 2 per cent while HDFC Bank (HDFCB) decreased by 4 per cent.

The main private bank index dropped by 1.9 per cent.

Payments remained strong overall. Credit card spending rose by 12 per cent compared to the previous year, while debit card spending fell by 23 per cent. UPI transactions increased by 41 per cent.

Credit growth was strong in retail (31 per cent), services (25 per cent), and agriculture (17 per cent) but was slow for big industries (5 per cent). In July, HDFC Ltd merged into HDFC Bank.

Among specific credit growth areas, in the retail segment, housing loans, vehicle loans and credit cards saw growth of 38 per cent, 21 per cent and 30 per cent, respectively. In the services segment, NBFCs (non-banking financial companies) saw 26 per cent growth while real estate saw 38 per cent growth.

Read the Kotak Institutional Equities report here.