(Bloomberg) — Indian lender HDFC Bank Inc. sold about 60 billion rupees ($717 million) worth of its mortgage portfolio to further ease its credit burden amid growing regulatory pressure on the industry.
The portfolio was sold to about six state-run banks in private transactions, said the people, who asked not to be identified because the information has not yet been made public.
The Mumbai-based bank also sold about 90.6 billion rupees worth of auto loan receivables that were securitized in fixed-income products known as pass-through securities, the people said. The bank was in talks to sell the receivables to around a dozen local asset managers, Bloomberg reported in late August.
The deal underscores India’s largest bank by market capitalization’s focus on shrinking its retail lending portfolio amid growing regulatory pressure to improve its credit-to-deposit ratio, a measure of how much of a financial institution’s deposits are lent out.The portfolio sale will help improve HDFC Bank’s ratio, which has deteriorated in recent years as credit growth outpaced deposits in India and its merger with mortgage lender Housing Development Finance Corp.
Buyers of pass-through certificates secured by HDFC’s auto loans included ICICI Prudential AMC, Nippon Life India Asset Management, SBI Funds Management and Kotak Mahindra Asset Management, the people said.The certificates offered monthly yields of 8.02%-8.20% in three tranches.
An SBI fund spokesman confirmed the auto loan transaction. HDFC Bank and the other buying funds did not immediately respond to Bloomberg’s request for comment.
