The UBS said that non-bank financial companies (NBFCS) will be the main drivers of growth, leaving the traditional lender behind the simple funds of retail and consumption-led credit and strong demand. On the contrary, banks are expected to face the demand for thin margins and sluggish corporate loans.
UBS analysts said, “NBFC (former HFCS) has won a stake in the last 10 years, which we expect to continue (C 16% CAGR FY 25-30EE), said UBS analysts. Banks, say, corporate credit is expected to increase.
UBS projects will increase by about 1.4 times the speed of loan banks from non-bank financial companies, with profits 1.5 times faster. For banks, the loss of the edge of their deposit is an additional burden. The current and savings-account ratio of the industry has dropped by about 700 basis points since its recent peak, a sign that more home money flows into mutual funds, insurers and equity.
Plenty of space for financing
India’s relatively low credit penetration offers many stories of growth. Home debt is only 5% of GDP, compared to 5% in China and 73% in the US, while less than one quarter of the working age Indians borrow from a formal lender. The UBS said “makes enough runways to continuous growth in retail loans.”
Living events
Housing loans are expected to increase by about 13% annually, with business lending expanding rapidly at 18%. Loan-even a loan against small-ticket credit-SME finance, property and gold loans should be in a double-digit region.
Property, property management and payments are closed
The UBS said the fastest growth would come from businesses involved in the market. Property operators under management are forecast to grow 21% a year, while asset managers should deliver 17.4%. Digital payment is another brilliant place: fee income can be more than twice as much as 1 trillion by 2030 as EPI transactions spread to small cities and traders.
Non-life carriers are also gaining momentum to expand more faster than life insurers on the rising demand for health and motor coverage.
Tariff risk
The UBS warned that the U.S. The friction of the accompanying trade can weigh India’s point of view. The US accounts for $ 87 billion or fifth in India’s exports. 50% tariff scenario can clip 35 to 60 basis points with GDP growth in financial 2026 and 2027, Pay FirM said. Direct exposure to banks such as textiles and gems like tariff-hit industries is normal, but the current account deficit and rates can squeeze the wider risk of credit rates.
Trooper
Financial companies already produce a third of India’s corporate profit and a quarter of its stock-market value. Their combined market cap has doubled in about five years. 1.1 trillion dollars. However, NBFCs, insurers and property administrators are dominated by private banks.
The UBS said, “When we expect lending companies to maintain an impressive share of financial profits, we believe that they are likely to lose shares because we expect other segments such as property management, AMC and payment.”
Also read | Indian economy will take -6 55-60 billion from Trump’s ‘Draconian’ tariff, warns Chris Wood of Jefferies
(Disclaimer: The recommendations, suggestions, opinions and views given by experts are their own. This does not represent the views of the economic time)
(Now you can subscribe to our Etmarkets WhatsApp channel)