India’s largest mortgage lender, HDFC Ltd sees strong growth of housing loans in HDFC bank. Keki Mistry, Vice-Chairman and Chief Executive Officer (CEO) of HDFC Ltd, said that the opportunity of loans in HDFC bank are much higher than those with HDFC Ltd.
"With the passage of time, the objective is to sell housing loans from more locations and branches of the bank," Mistry said.
The market, Mistry said, which currently has a penetration level of around 11 percent of the gross domestic product (GDP), can reach up to 20 percent in the coming years.
In an exclusive interview with Moneycontrol, Mistry, who is associated with the HDFC brand for nearly 42 years, also highlighted that there will be structural opportunities in housing finance as the sector has seen tremendous change.
“In the early 1980s, we were the only housing loan provider. Convincing people in the 80s that housing finance and loan would work was a major challenge. But now the sustained demand for housing loans has been strong,” Mistry said.
Post merger, there is a huge opportunity to the housing finance sector, Mistry said. and the post merger entity will provide a bigger platform for lending to the housing sector.
“Growth opportunity on loans will be a bigger opportunity in HDFC Bank than HDFC. Gradually, the objective is to expand housing loans from more and more branches of the bank,” Mistry said.
On regulatory requirements for lenders, Mistry said: “Regulator requires a 60 percent liquidity cover ratio (LCR). We have over 100 percent,” Mistry said.
LCR is a proportion of highly liquid assets which lenders keep aside to ensure enough funding during a period of uncertainty.
On the appointment of a head for the merged entity, Mistry said that an integration committee is working on the same.
“Mortgage head for the merged entity - It's still being worked out. We have an integration committee looking at this,” said Mistry.
The lender, in the quarter ended December 2022, reported a net profit of Rs 3,691 crore compared to Rs 3,260 crore, witnessing a 13 percent rise.