Don’t miss the latest developments in business and finance.

Kotak Bank says seeing fall in home loan book growth

Image
Press Trust of India Mumbai
Last Updated : Dec 29 2013 | 2:40 PM IST
Private sector lender Kotak Mahindra Bank is witnessing a sizable reduction in its home loan book growth in the current fiscal at 10-15 per cent levels on poor consumer sentiment, a senior official has said.
"For the past two years, our home loan book has been growing at 30-40 per cent, but this year it has grown by only 10-15 per cent," executive vice-president and head of retail assets Sumit Bali told PTI.
He said the poor market sentiment is the prime reason for the slowdown in home loan growth and the same trend is being witnessed by the realty sector as well where demand has slowed down.
The official of the bank, which had cut its home loan rates by up to 0.25 per cent last week, said people decide on home purchases when they see certainty, which includes multiple factors like a low and stable inflation, steady job creation, etc.
If that does not happen, they tend to pull back and wait for certainty to emerge before making their decision, he said adding that one should ideally enter in a depressed market for the best valuations.
As of the September quarter, the bank's home loans had stood at Rs 11,307 crore and had posted a year on year growth of 17 per cent.
Kotak Mahindra Bank, one of the youngest lenders among the domestic players, joined its larger peers SBI, ICICI Bank and mortgage major HDFC in cutting the home loan rate by 0.25 per cent last week.
Bali said competitive environment and a reduction in cost of funds were the drivers for Kotak to cut its rates.
When asked about the impact of the move on margins, he exuded confidence that the bank will broadly be able to hold on to them and added that a pick up in volumes following the move will also help.

Also Read

First Published: Dec 29 2013 | 2:40 PM IST

Next Story