Gold loans & credit growth: AU Bank, DCB, IndusInd, Shriram & 7 others reveal their playbook

At the Equirus India Growth Summit, top management from 11 banks and NBFCs sat down with analysts and didn't hold back. From AU Small Finance Bank to Shriram Finance, the conversations covered everything: where credit costs are heading, how deposit wars are playing out, and which lending segments are about to boom. Here's what every investor watching Indian financial stocks needs to know, distilled from the room.

AU SFB is targeting loan growth at 2-2.5 times nominal GDP over the next 3-5 years, leaning hard into vehicle loans, mortgage-backed business loans, and a fresh push into gold loans where it's chasing a 1-1.5% market share from a tiny base. The bank is also gunning for a major cost efficiency win, aiming to cut its cost-to-assets ratio from over 4% down to 3.5%. One catch: its credit card business isn't profitable yet and needs 3-4 million cards just to break even.

DCB has been chipping away at the premium it pays over larger banks for deposits, shrinking the gap from 110-120 basis points to about 70, with more room to fall to 45. Gold loans are becoming a bigger deal here too, already 20% of the book and on track to become the bank's third-largest product. Management is playing it safe with gold, capping loan-to-value at 75% even though regulators allow 85%, a cushion that paid off when gold prices dipped.

Every business line at IndusInd is currently dragging down returns, but management sees a path back to a return on assets of 1-1.25%, driven by lower credit costs and tighter cost control. Foreign currency deposits are expected to make up 4-5% of the base soon, which will pressure margins short-term before boosting them from the third quarter onward. The bank is also capping its microfinance exposure at roughly 7% of the book after a stress period, while quietly scaling up gold loans across 500 branches.

Housing finance demand remains strong, especially in South India and emerging Tier-2 towns, with management adding new branches in Uttar Pradesh specifically to chase that growth. Roughly 87% of the loan book resets quarterly, which actually works in the company's favor as rates climb. The company is guiding for 14% loan growth and 23% disbursement growth this year, alongside a healthy return on equity target near 18%.

The company is actively shifting borrowers from group microfinance loans into individual loans, which come with better yields and lower credit costs. Its mortgage business is scaling fast too, though it's currently capturing only about 10% of demand from its own existing customer base, leaving plenty of runway. Management wants to hit an asset base of 500 billion rupees by December 2028, eventually reaching a trillion rupees, while starting to cut interest rates from the third quarter.

Rather than chasing aggressive expansion, Equitas is focused on operating leverage to protect profitability even as margins compress by 10-15 basis points. Housing loans are the standout growth driver here, targeted at 25-30% growth, while microfinance exposure gets capped near 10% of the book. A capital raise combining tier-1 and tier-2 funding is planned for early next fiscal year to support the next leg of expansion.

MAS is shifting away from partner-driven lending toward direct sourcing, aiming to push that share from 67% to 70%, while also expanding its partner network. Housing finance is the standout, growing at 30-35%, and the company is pushing into new geographies including Karnataka, Andhra Pradesh, and Delhi-NCR. Management isn't planning to raise fresh equity for at least two years, a sign of confidence in current capital levels.

Used commercial vehicle prices have jumped 30-35% over five years, and demand has surprised to the upside in recent months on the back of strong freight activity. The company is expanding gold and small business loans into hundreds of new branches, since only about 15% of its 3,225-branch network currently offers the full product suite. Management is guiding for 15-17% commercial vehicle growth over the next five years, with new vehicle financing set to take a bigger share of the mix.

Ujjivan wants secured lending, think housing, vehicle and gold loans, to make up 70% of its book by 2030, up from about 50% today. It's expanding aggressively into North and East India with over 100 new branches planned to fuel both loans and deposits. A capital raise of roughly 20 billion rupees is expected around November once its capital ratio dips below an internal 20% floor, part of a broader push toward a trillion-rupee loan book by 2030.

Almost every bank and NBFC in the room is racing into gold loans right now, from AU Bank and DCB to IndusInd and Shriram. It's a low-risk, high-margin business that's becoming a go-to lever for growth as competition intensifies in traditional lending categories. At the same time, nearly every management team downplayed worries about weather disruptions and geopolitical oil-price shocks, saying they've seen no material impact on loan demand or repayment behavior so far.

Deposit costs are easing across the board as competition for funding cools, giving banks room to protect margins even as loan mix shifts toward secured, lower-risk lending. Microfinance is being deliberately capped or diversified away from at nearly every institution, replaced by individual loans, mortgages, and gold as the new growth engines. For investors, the message from this summit is consistent: India's lenders are prioritizing quality and balance sheet strength over blistering growth, betting that discipline now pays off in stronger returns later.