In the last few years retail banking, especially mortgages, and personal loans, have proved a saviour for the banking industry. Growing upwards of 20 per cent, retail has actually been compensating for low corporate banking growth.
Of late, however, margins are under pressure from intense competition. Besides future growth (which may continue), there are issues of risk in unsecured lending.
Going forward, rising interest rates may affect existing homeowners and there may be some some delinquencies. Some banks, meanwhile, are now venturing into new areas such as consumer durables financing, affordable housing, and micro loans.
At some stage , the corporate banking growth has to come back.