HDFC Aims To Capitalise On India’s Consumer Boom Beyond Home Loan Dominance

HDFC Bank is leveraging its home lending services to tap into a broader range of consumer finance clients, encompassing purchases such as air conditioners, cars, and televisions. The bank, ranked as the world’s sixth-largest, is transforming around 530 offices from mortgage-focused centers into full-fledged banking outlets in the upcoming months, according to Kaizad Bharucha, HDFC Bank’s Deputy Managing Director.

The bank’s merger with HDFC has enabled it to extend home loan services to more than three times the locations, with plans to expand further. This strategic move aims to capture the attention of customers seeking various financial products tied to home ownership.

Bharucha emphasised that as customers secure home loans, they can seamlessly obtain consumer finance loans for appliances and other items without needing to engage with other entities. This approach aligns well with the burgeoning demand for retail customer loans in India, a nation witnessing remarkable growth in consumer finance needs.

With the competitive landscape expanding due to the demand surge, HDFC Bank is positioning itself to stand out in this evolving market. Other players, including Jio Financial Services are also entering the fray, intensifying the competition.

Furthermore, HDFC Bank plans to enhance its focus on loans for affordable housing and construction finance. The bank’s strong financial backing from entities such as Life Insurance Corp of India and Singapore’s sovereign wealth fund GIC Pte. supports its expansion endeavors.

Bharucha highlighted that the bank’s cautious and prudent approach has contributed to maintaining low gross nonperforming assets, which stood at 1.13 per cent in relation to customer assets at the end of June. He emphasized the importance of balancing growth with prudence, a principle that HDFC Bank has consistently demonstrated over time.

Notably, around 70 per cent of HDFC’s previous mortgage customers were not HDFC Bank clients, and merely 2 per cent of the bank’s customers had sourced their home loans from HDFC before the merger. This indicates a significant untapped potential for cross-selling and expanding the bank’s customer base.