HDFC Bank To Securitise Over Rs 12,000 Crore Car Loans To Reduce Assets

HDFC Bank plans to pool car loans worth Rs 12,372 crore and sell to mutual funds before the first week of December, five people told NDTV Profit. This comes as the bank is planning to bring down loan assets on its balance sheet to control its loan-to-deposit ratio.

This would be the private sector bank's second pass through certificate issue in the current financial year.

On Thursday India Ratings and Research assigned AAA (SO) rating to HDFC Bank's pass-through certificates. These will be in three tranches of 2026, 2027 and 2030 tenures, the rating agency said.

The rating assigned "addresses the timely payment of interest and timely payment of principal to the PTC investors as per transaction documentation," the rating agency said in its statement.

The loan pool consisting of nearly 1.83 lakh car loans had a weighted average seasoning of 17.5 months and weighted average amortisation of 23.3%, implying strong repayment track record, India Ratings said.

The weighted average interest rate of the entire loan pool was at 8.91%. The bank plans to offer the PTCs at 8.3-8.4% according to a person with direct knowledge of the development. This is around the same rate as its last PTC issuance.

In September, HDFC Bank had issued PTCs worth Rs 10,000 crore, which were auto loans, to mutual funds at 8.40%. The bank has previously sold Rs 6,000 crore worth housing loans in private deals previously this year.

Calls and emails sent to HDFC Bank were left unanswered at the time of publishing this story.

As of the quarter ended September, the bank's ratio between loans and deposits is around 100%, Chief Financial Officer Srinivasan Vaidyanathan had said in Jul-Sep earnings call. This is higher that the industry average of around 80%.

Recent asset sales by the bank were part of a strategic move by the lender. Going ahead, depending on the amount of appetite in the market, HDFC Bank would continue to use asset sales, along side deposit accretion to bring down its credit-deposit ratio.

As of September, HDFC Bank had a loan book of Rs 24.95 lakh crore, up 7% year-on-year. Outstanding deposits rose faster at 15% from a year ago to Rs 25 lakh crore.

Before its merger with Housing Development Finance Corporation Ltd, the bank had a credit-deposit ratio of around 86-87%. This rose to 110% immediately after the merger in July 2023.

In the July-September quarter, the bank offloaded Rs 19,000 crore worth loans through direct assignment route. NDTV Profit previously reported that the bank is looking to sell Rs 60,000-70,000 crore worth loans through direct assignment in the coming quarters.