India's private banks see profits squeezed as retail lending falls
Business
India's biggest private banks are seeing their profits squeezed, thanks to fewer people taking out retail loans this June quarter.
HDFC Bank's net interest margin, or NIM, dropped to 3.26%, and Kotak Mahindra Bank hit its lowest NIM in nearly five years, at 4.53%.
It is clear the slowdown is affecting everyone.
Private banks pivot to corporate loans
With retail lending down, banks are shifting focus to corporate loans, which earn them less profit.
Axis Bank says its margins might have finally stabilized at 3.46%, but rising bond yields pushed companies to borrow from banks instead of issuing bonds, cutting into bank earnings even more.
HDFC Bank plans to fight back by opening more branches and boosting its share of retail loans.