Home loans drive SBI growth, PSB beats HDFC in Q1 lending

MUMBAI: Home loans were a key growth driver for SBI in the June quarter, with outstanding credit rising 15% to Rs 8.5 lakh crore at June-end from Rs 7.4 lakh crore in June 2024. Of the Rs 3.6-lakh-crore increase in its loan book over the year, nearly a third - Rs 1.1 lakh crore - came from home loans.Meanwhile, HDFC Bank's outstanding home loans increased 7% to Rs 8.4 lakh crore in June 2025 from Rs 7.9 lakh crore in June 2024. The private lender's home loan growth has been sluggish, which the bank attributed to intense price competition.In Q1, SBI's mortgage book growth was around Rs 20,000 crore, rising from an outstanding base of Rs 8.3 lakh crore as of March 2025. SBI's loan additions during the first quarter were nearly 35% of the total of Rs 56,643 crore in home loans added by banks during the first quarter, RBI data showed.In the earnings call, SBI chairman C S Setty said that SBI's incremental loan market share gains were "led primarily by high return on risk-weighted asset segments such as retail mortgages and secured small business credit", indicating that home loans were a key driver of the bank's credit growth in the quarter. The push for housing has come against a backdrop of slower corporate credit growth, which Setty attributed to around Rs 12,000 crore of prepayments as borrowers refinanced at lower rates in a declining interest rate cycle, the shift of Rs 16,000-18,000 crore of borrowing by large corporates to the more competitive commercial paper market, and SBI's decision not to match very low rates in some cases to preserve risk-adjusted pricing, noting that such trends are a recurring feature when interest rates fall.

According to Setty, home loans have been the main driver for retail credit as well. "Home loans we have done 15% ... that's a phenomenal growth. But I definitely visualise that the unsecured personal loan segment and auto loan segment is not doing all that well in terms of sales. These two will pick up in the second half," he said.On tariffs, Setty said, "As far as supply chain disruption and tariff order are concerned, there are four or five sectors with higher impact, but from a banking perspective they pose no systemic risk as SBI's exposure is minimal."