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HDFC Bank plans to sell Rs 10,000 crore of loan portfolios using a rare debt instrument.
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The bank aims to reduce exposure to certain sectors amid challenges in raising deposits.
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The loan sale will be backed by a pool of car loans and offered to local asset managers.
HDFC Bank is planning to sell Rs 10,000 crore of loan portfolios using a rare debt instrument called pass-through certificates. This move aims to reduce the bank’s exposure to certain sectors amid challenges in raising deposits. The certificates will be backed by a pool of car loans and offered to local asset managers.
The bank has reported a 35.33% surge in its standalone net profit for the first quarter of the financial year 2024-25. However, its credit-to-deposit ratio remains high at 105%, indicating a need to manage its loan growth. The Reserve Bank of India has expressed concerns over high credit-deposit ratios of some banks, which can pose liquidity and credit risks.
HDFC Bank’s loan sale is expected to be issued in multiple tranches in the next few weeks, offering interest rates between 8.3-8.5% to investors. This move is part of the bank’s efforts to manage its loan growth and maintain liquidity amid challenges in raising deposits.
