The pace of growth in the revenue pool from corporate banking services for banks in India moderated to 4 per cent year-on-year (Y-o-Y) in calendar 2023 from 15 per cent in 2022, according to Coalition Greenwich, a research unit of CRISIL.
While cash management exhibited strong growth on the back of momentum from higher rates in 2023, that business is expected to temper somewhat as peak rates level off. Investment banking pools registered double-digit gains as primary activity in capital markets increased. Lending toned down a bit as corporates focused on strengthening balance sheets as rates remained elevated.
CRISIL’s unit, in its “Voice of Client – 2024 India Corporate Banking Study”, said the majority of corporates have a positive outlook for their businesses in the year ahead.
Corporates in India are moving to capitalise on bullish domestic macro conditions by expanding into international markets. Approximately 83 per cent of large India-headquartered corporations now employ at least one bank for cross-border trade and payments—a metric that serves as a good proxy for international operations. That share is up from 71 per cent only two years ago.
Coalition Greenwich said that while foreign banks bring a robust network and product capabilities when it comes to international banking, two strong trends are helping Indian banks compete in this arena. First, Indian banks’ digital capabilities increasingly compete with those of the more established foreign banks—especially their speed-to-market. Digital is an important differentiator and key selection criterion for corporates across markets and geographies when choosing a banking provider.
Second, thanks to higher interest rates internationally and a slightly reduced lending appetite of some foreign banks, Indian banks have been able to compete effectively on pricing and balance sheets, it added.
First Published: Aug 13 2024 | 7:10 PM IST
