HDFC Bank mulling loan portfolio sale amid growth scrutiny: Report

HDFC Bank is considering the sale of some of its loan portfolio, according to people familiar with the matter, amid heightened regulatory scrutiny on the country’s lenders as their credit growth surges. India’s biggest private sector bank has approached public-sector lenders, non-banking financial companies as well as some insurance companies and asset managers about participating in the sale, said the people, who requested anonymity discussing private conversations. A measure of how much of a bank’s deposits are being lent out as loans — known as the credit-deposit ratio — has drawn scrutiny from the Reserve Bank of India as that gauge for the nation’s industry stands at a decade high. Selling some of its loan portfolio would go some ways to help HDFC bring that down following an increase in the wake of its 2023 merger with the bank’s parent HDFC. It may also aid its liquidity.The move is an unusual one for HDFC Bank, which is approaching the market with such a sale for the first time since the two firms combined, the people said. A spokesperson for Mumbai-based HDFC Bank didn’t reply to an email request for comment. Shares of the bank fell the most in a month on Friday after it reported flat sequential deposit performance in the quarter ended June.