HDFC Bank offloads Rs 6000 crore home loans, mitigating credit load

HDFC Bank has sold a housing loan portfolio of about Rs 6,000 crore ($717 million) in respect 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 sources.

The bank also unloaded another pool of car loans worth about Rs 9,060 crore, securitized in a fixed-income product called pass-through certificates, the people said. The lender had been engaged in talks to offload the pool to about a dozen local asset management companies.

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This came as 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 which has worsened in recent years as credit growth outpaced deposits 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, they said.

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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.

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