HDFC sells $717 million of home loans to reduce credit book
HDFC Bank Ltd. has sold a housing loan portfolio of about Rs 60 billion ($717 million), seeking to further lighten its credit load amid regulatory pressures on the industry.
The portfolio was sold to about half a dozen state-controlled banks through private deals, according to people familiar with the matter, who asked not to be identified as the information is not yet public.
The Mumbai-based bank also unloaded another pool of car loans worth about Rs 90.6 billion, securitized in a fixed income product called pass-through certificates, the people said. The lender had been engaged in talks — reported in late August by Bloomberg — to offload the pool to about a dozen local asset management companies.
The deals confirm India’s largest bank in market value is intensifying efforts to shrink its retail loan portfolio amid heightened regulatory pressure to improve the sector’s credit-deposit ratios — a measure of how much of an institution’s deposits are being lent out. The portfolio sales would help HDFC Bank improve its ratio that has worsened in recent years as credit growth outpaced deposit in the nation and following its merger with mortgage lender Housing Development Finance Corp.
The buyers who subscribed to the pass-through certificates, backed by HDFC’s car loans, included ICICI Prudential AMC, Nippon Life India Asset Management Ltd., SBI Funds Management Pvt. and Kotak Mahindra Asset Management Co., the people said. The certificates offered yields in the range of 8.02% to 8.20% monthly for three tranches,
