HDFC Bank aims to close $1 billion loan sale deal in September to improve credit-deposit ratio

By Dharamraj Dhutia

MUMBAI (Reuters) - India's largest private lender HDFC Bank hopes to complete a planned sale of loans worth more than 90 billion rupees ($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 35 billion rupees, 18 billion rupees and 37.62 billion rupees, respectively.

($1 = 83.6180 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Mrigank Dhaniwala)