HDFC Bank to keep home loans as focus of growth strategy post merger

HDFC Bank will keep home loans at the centre of its growth strategy after a merger with HDFC Ltd is concluded.

HDFC Bank Ltd. will keep home loans at the centre of its growth strategy after a merger with HDFC Ltd. is concluded, with such credit likely to make up nearly a third of the bank's portfolio going forward, two senior officials at the group said.

The pace of growth in home loans will broadly mirror growth seen in HDFC's home loan portfolio, the first official said, declining to be identified as strategy discussions are not public.

Individual home loans have grown at a compounded annual rate of 16% over the last five years, according to its investor presentation.

The home loan segment is seen as a steady growth business with low delinquencies and has seen a boost since the pandemic.

While the share of portfolio will oscillate based on growth in other segments, the group is comfortable with it staying at current levels, the official said.

"We see home loans as a secured sticky product which can generate sticky deposits and spur lending into a number of home-related personal loan categories," the official added.

The merger, announced in April last year and set to conclude in early July, will see India's largest housing financier merge with the bank it parented in 1994 - now the country's largest private lender.