Mumbai, India: In a move aimed at streamlining its credit portfolio, HDFC Bank, a leading Indian lender, has offloaded a significant portion of its home loan portfolio. The bank sold approximately $717 million (₹60 billion) worth of home loans to a consortium of undisclosed state-controlled banks through private deals.
This strategic decision stems from recent regulatory pressures on the Indian banking sector, urging institutions to maintain healthy credit-deposit ratios. HDFC’s rapid loan growth, coupled with its merger with Housing Development Finance Corporation (HDFC), had led to a potential imbalance in its credit book.
The sale of these home loans allows HDFC to reduce its overall credit exposure, mitigating risk and enhancing its compliance with regulatory requirements. While the exact buyers remain confidential, reports suggest that the portfolio was acquired by a group of six state-owned banks. This transaction is unlikely to impact existing home loan borrowers, as the underlying loans simply change ownership within the banking system.
The impact on HDFC’s stock price was minimal, reflecting investor confidence in the bank’s long-term prospects. This move underscores HDFC’s commitment to maintaining a healthy financial position and its focus on responsible lending practices. It also demonstrates the growing liquidity within the Indian banking sector, with state-owned banks actively seeking opportunities to acquire quality loan assets.
