Indian lender HDFC plans to double retail loans

Mumbai

HDFC Bank, India's most valuable lender, plans to double the amount of loans it makes to retail borrowers over the next couple years as consumer demand ramps up from a pandemic-induced slowdown.

Uncertainty is declining and demand is improving as businesses seek to bolster growth after Covid-19, Arvind Kapil, the bank's country head for retail assets, said. It's an opportunity to reverse the declining share of loans to this segment of the market that was needed to preserve asset quality, he added.

"We are planning to double our retail assets book in a focused manner," Mr Kapil said. "I can sense a robust demand at ground level. I run businesses and I am giving you a feel of what I see."

Of the bank's total 11.5 trillion rupees (S$210 billion) loan book, Mr Kapil is in charge of retail borrowing worth 3.7 trillion rupees, which is expected to reach almost eight trillion rupees within the next two years.

The plans contrast the bank's strategy a year ago when it slowed retail lending to protect its asset quality as the pandemic led to millions of job losses and businesses closures.

HDFC's retail lending share as a portion of its total fell to 47 per cent in March, the lowest in at least five years from an average of 54-55 per cent previously.

"The results of doubling our business will be more visible early next financial year," Mr Kapil said.

"We will balance our top line growth with our return on assets objective," he said. BLOOMBERG