HDFC sells $17 million of home loan to reduce credit book

Indian lender 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. In June, HDFC also sold a 50 billion rupee loan portfolio. Its credit-deposit ratio stood at 104% at the end of March, higher than the 85% to 88% rate in the previous three fiscal years, according to ICRA Ltd., an affiliate of Moody’s Ratings. The fact that deposit growth is lagging that of credit “may potentially expose the banking system to structural liquidity issues,” the central bank said in August. For its upcoming earnings report for the quarter ended September, HDFC Bank is expected to show deposit growth of 13% on-year, compared with an 8% increase in loans, according to Suresh Ganapathy, head of financial services research at Macquarie Capital.
 

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