HDFC Bank sees double-digit growth in home loan business post merger

Updated - February 15, 2024 08:15 pm IST

Published - February 15, 2024 07:44 pm IST - MUMBAI

Image used for representative purpose only.

Image used for representative purpose only. | Photo Credit: REUTERS

HDFC Bank on Thursday said that its home loan business had witnessed healthy double digit growth post merger of HDFC Ltd with itself.

“The home loan business experienced stable and healthy double-digit year-on-year (YoY) growth for two quarters, ending December 31, 2023,” Arvind Kapil, Country Head- Mortgage Banking, Home Loan, LAP & HDFC Sales, HDFC Bank said at a briefing. “The growth in sales turnover has come on the back of a wider distribution network,” he added.

He said the business reported 3.6% sequential growth as of December 2023, the highest among peers in home loans, and that the turnaround time to make a decision had been reduced to one-third post merger.

“Further, savings accounts for incremental disbursals had moved to 80% from 35% earlier, which means a large number home loan customers of HDFC Ltd. have shifted their EMP paying savings accounts from other banks to HDFC Bank. This sets the foundation for a stronger digital connect with incremental customers,” Mr. Kapil said.

Stating that the bank’s market share in home loans had grown approximately by 18% to 20% on incremental disbursals post the merger, he said the business had exhibited robust and consistent higher double-digit, year-on-year growth for the first six months, post the merger. 

By mid-March, the bank had announced to introduce a seamless home refurbishment loan facility for its customers. And by April 2024, it would come out with a ‘Home Saver’ product by which any excess liquidity would go towards prepayment of the loan.

“One of the biggest opportunities was to generate CASA and initial signs are encouraging. Pre-merger, about 30-35% of incremental disbursals were to customers with an HDFC Bank savings account. This has reached about 80% of incremental disbursals, post-merger,” Mr. Kapil said.

“The home loan business for the bank has become both an asset and liability generator and is growing sizeably. This leads to a higher stickiness quotient and a stronger customer connect with the bank for a longer duration,” he added.

On the operational front, the bank has decided to convert all erstwhile HDFC Ltd.’s service centres to branches in a phased manner and its entire mortgage team would also become relationship managers. 

The bank has already commenced cross selling its products/services. through these service centres from February 01, 2024. 

As a part of the cross-sell strategy, home loan customers would be able to avail of a wide range of products/services like consumer durable loans, credit cards, wealth advisory product, unsecured loans and home refurbishment loans.

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