HDFC Bank's home loan book reached INR 6.84 lakh crore in December, nearing SBI's INR 6.94 lakh crore. SBI had surpassed HDFC in February 2021 with a market share of 23.5% to HDFC's 17%. Despite HDFC Bank's rapid growth post-merger, it lost market share. However, HDFC Bank's sequential growth outpaced competitors at 3.6%. SBI aims for a INR 10 lakh crore home loan book in five years. HDFC Bank focuses on reducing loan processing time and increasing cross-selling opportunities. They plan to introduce home refurbishment loans and a home saver product to enhance customer offerings and digital connectivity.
HDFC Bank, the largest private sector lender, announced its home loan book's growth to INR 6.84 lakh crore in the December quarter, narrowing the gap with State Bank of India (SBI), the country's largest lender, which stands at INR 6.94 lakh crore. SBI had overtaken HDFC in home loan assets in February 2021 with a market share of 23.5%, surpassing HDFC's 17% share. Before the merger, HDFC Bank's parent firm, HDFC, held a dominant position in the market.
In the December quarter, SBI's home loan book grew by 13.6% year-on-year and 3.22% sequentially to reach INR 6.94 lakh crore. On the other hand, HDFC Bank's home loan Assets Under Management (AUM) increased by 3.6% sequentially to reach INR 6.84 lakh crore. The merger with HDFC came into effect in July 2023, making annualised comparisons impossible.
According to the March 2023 balance sheet, HDFC Bank emerged as the market leader in home loans with a combined book of INR 7.3 lakh crore, surpassing SBI's INR 6.4 lakh crore. HDFC contributed INR 6.25 lakh crore to this portfolio, while HDFC Bank contributed INR 1.02 lakh crore. Despite the merger and the industry's faster-than-average growth in the December quarter, HDFC Bank's market share declined.
Arvind Kapil, head of home loans and mortgages at HDFC Bank, highlighted that the bank accounted for over 20% of the incremental home loan sales in the December quarter, experiencing the fastest sequential growth among all lenders at 3.6%. He emphasised that the bank's home loan book, now at INR 6.84 lakh crore, contributes 30% to its balance sheet exceeding INR 25 lakh crore.
SBI's balance sheet grew to INR 35.84 lakh crore, a 14.38% increase year-on-year from INR 31.33 lakh crore. Dinesh Khara, SBI's chairman, reiterated the bank's position as the largest home loan lender, with a mortgage book exceeding INR 6.52 lakh crore as of the June quarter.
Khara mentioned SBI's internal target of doubling the home loan book to INR 10 lakh crore in the next five years and reaching INR 7 lakh crore by FY24, a target he believes is achievable. Kapil emphasised HDFC Bank's rapid strides in loan processing turnaround time post-merger, aiming to further reduce the timeline.
Additionally, Kapil noted that 80% of new home loan customers now open savings accounts with HDFC Bank since the merger, compared to only 35% pre-merger. This expansion of the current account savings account (CASA) base lays the groundwork for stronger digital connectivity and cross-selling opportunities.
Looking ahead, HDFC Bank plans to launch home refurbishment loans in mid-March and a home saver product in April, enhancing its offerings to existing and prospective home buyers. These initiatives align with the bank's strategy to capitalise on cross-selling opportunities and strengthen its position in the home loan market.
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