HDFC seeks to offload Rs 8,400 crore loans

12 Sep 2024 , 01:28 PM

According to news reports, HDFC Bank Ltd., India’s largest private sector lender, is in talks with multiple global banks to sell loans worth up to 84 billion rupees ($1 billion) in order to lower its credit book and bring it closer to deposits.

Discussions are ongoing with banks such as Barclays Plc, Citigroup Inc., and JPMorgan Chase & Co., according to the reports. ICICI Bank Ltd. is also involved in the talks, according to one of the reports.

The proposed loan portfolio sales, with conditions still to be finalised, would take place through a debt product known as pass-through certificates.

Indian banks face significant regulatory pressure to raise their credit-to-deposit ratios, which measure how much of a bank’s deposits are given to borrowers. The loan sales would help HDFC improve that ratio, which has deteriorated in recent years as credit growth has outpaced deposits.

Bloomberg News has reported that the institution is reportedly in separate talks with local asset management organisations about selling loans worth up to 100 billion rupees. It had sold a 50 billion rupee loan portfolio to an unnamed buyer in June.

At the end of March, HDFC’s credit to deposit ratio was 104%, up from 85% to 88% in the preceding three fiscal years, according to ICRA Ltd.

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