HDFC Bank to close Rs 9000 cr loan sale this month, sources say

Mumbai: India's largest private lender HDFC Bank hopes to complete a planned sale of loans worth more than Rs 9000 crore ($1.08 billion) - its largest to date - by the end of September, three sources aware of the matter said on Thursday.

The sources requested anonymity as they are not authorised to speak to media.

HDFC Bank did not immediately reply to a Reuters query.

HDFC Bank merged with parent Housing Development Finance Corp in July 2023, adding a large pool of mortgage loans to the bank's portfolio but a much smaller amount of deposits. This has put it under pressure to increase the pace at which it raises deposits or to slow loan growth.

The bank is in the process of issuing pass through certificates that are backed by a pool of car loans.

India Ratings has assigned a provisional AAA(SO) rating to these instruments and said the collateral pool had an outstanding of 90.62 billion rupees as on Aug 31.

The provisional ratings are based on the origination, servicing, collection and recovery capabilities of HDFC Bank, the rating agency said.

"The bank has already tied up with investors that include mutual funds, some corporates as well as some non-banking finance companies who would be subscribing to these instruments," one of the sources said.

The pass through certificates, divided in three parts, will mature in September 2026, July 2027 and September 2030, and will have loans worth RS 3500 crore, Rs 1800 crore and Rs 3762 crore, respectively.