Stories
HDFC Bank Open to Selling Home Loans Under Favorable Market Conditions
- •HDFC Bank CEO Sashidhar Jagdishan stated that the bank may consider selling down or securitizing home loan assets if market conditions and investor demand are favorable.
- •The bank is unwilling to chase home loan growth at the cost of margins, choosing to let go of deals where intense pricing competition makes no economic sense.
- •Despite pricing pressures, mortgages remain central to HDFC Bank's customer acquisition strategy for long-term relationships and cross-selling.
- •Nearly 60 percent of the bank's overall home loan portfolio is now repaid through HDFC Bank accounts following the merger with HDFC Ltd.
- •Jagdishan advised investors to focus on earnings per share growth and return on assets rather than individual post-merger metrics.
Key Questions Answered
HDFC Bank may consider selling down or securitising home loan assets if market conditions and investor demand are favourable. Outgoing CEO Sashidhar Jagdishan noted that while the bank will not chase growth at the expense of margins, mortgages remain central to its customer acquisition and cross-selling strategy.
Following the merger with HDFC Ltd in July 2023, the bank inherited a large housing finance mortgage business. Nearly 60% of the overall home loan portfolio is now repaid through HDFC Bank accounts, as the combined entity integrates its businesses and manages its balance sheet.
Investors should focus on earnings per share (EPS) growth and return on assets (RoA) rather than individual metrics like margins or headline business growth when assessing post-merger performance. Outgoing CEO Sashidhar Jagdishan emphasized that the bank's post-merger performance should be evaluated as that of a new institution.
