Indian banks see rapid corporate credit growth despite potential profit pressure

Major Indian banks recorded rapid expansion in their corporate loan portfolios during the second quarter of the 2027 fiscal year. According to the Economic Times, corporate advances grew faster than retail lending across several top financial institutions, driven by demand for scale and lower servicing costs. [1]

The Economic Times reported that Axis Bank saw its corporate advances increase by 34 percent year on year in the second quarter. In comparison, the bank registered 25 percent growth in small and medium enterprise loans and 16 percent growth in retail advances during the same period. [1]

Other major lenders experienced similar trends, according to the Economic Times. ICICI Bank expanded its domestic corporate portfolio by 30.6 percent, while HDFC Bank recorded a 16.4 percent increase in its corporate and wholesale loan segment. [1]

Although corporate lending offers broad scale, the Economic Times reported that aggressive competition for large borrowers can narrow lending spreads. Profitability across corporate and retail divisions ultimately depends on risk adjusted returns after accounting for capital requirements, operating expenses, funding costs, and credit losses. [1]