Tag: HDFC

HDFC, Axis Bank sold Reliance Capital debt facilities to ACRE, BFSI News, ET BFSI

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A few months before the Reserve Bank of India (RBI) superseded the board of Reliance Capital (RCap), Ares SSG Capital-backed Assets Care & Reconstruction Enterprise (ACRE) acquired debt facilities from HDFC and Axis Bank at 27-28 paise on a rupee.

ACRE, an asset reconstruction company, purchased a ₹524-crore term loan from housing finance company HDFC Ltd and a ₹100-crore term loan and ₹490-crore non-convertible debentures (NCDs) from Axis Bank, the people said. Both trades were carried out on an all-cash basis, one of the persons cited above said.

HDFC and Axis Bank were the only two lenders that had provided term loans to RCap, according to the company’s annual report for the financial year March 31, 2021.

The Anil Dhirubhai Ambani Group-promoted finance company has total liabilities of ₹19,123 crore.

Axis Bank sold two 8.85% NCDs maturing in 2026 amounting to ₹488.2 crore and one 9% NCD maturing in 2026 of ₹1.85 crore to Assets Care & Reconstruction in the secondary bond market in October.

Default Category
The trade with HDFC was concluded in June, the people cited above said. HDFC had an outstanding loan of ₹524 crore and interest overdue of ₹79 crore as of March 31, 2021.

HDFC, Axis Bank and ACRE did not respond to the request for comment. The debt facilities of RCap were downgraded to D – indicating default category – in September 2019 by CARE Ratings, when it missed payments on NCDs.

RCap, having been in default for over two years, saw its board superseded on Monday. In a statement, RBI said it had done this given the “defaults by Reliance Capital in meeting the various payment obligations to its creditors, and serious governance concerns, which the board has not been able to address effectively.” The company’s total liabilities include NCDs of ₹16,260 crore, term loans of ₹625 crore and inter-corporate deposits of ₹561 crore. It has also issued a corporate guarantee of ₹1,677 crore.

In June last year, ET reported that Deutsche Bank had purchased ₹565 crore of Reliance Capital bonds at a discount of 70% in the secondary market through seven transactions.

RBI will approach the National Company Law Tribunal between Friday and Monday to admit the finance company for corporate insolvency resolution process, one of the persons cited above said. Y Nageswara Rao, a former executive director at Bank of Maharashtra, has been appointed administrator of RCap. The ADAG-promoted Reliance Capital is registered as a core investment company with RBI, with investments in general and life insurance, asset management, stockbroking, housing finance, wealth management and asset reconstruction.



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Real capex will revive in 9-12 months. says Axis Bank CEO Amitabh Chaudhry, BFSI News, ET BFSI

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Even as large corporations firm up greenfield and brownfield investment plans, Amitabh Chaudhry, CEO, Axis Bank, believes that real capex will revive in the next 9-12 months and will signal the revival of credit offtake. Chaudhry, who was reappointed as MD of the bank for another three years, tells Saloni Shukla that he had pivoted the bank toward a better quality franchise and the bank would soon catch up with the NIMs and RoAs reported by the likes of ICICI Bank and HDFC Bank. Edited excerpts:

What’s your view on the Indian economy? Is it on the mend?
The festive season has been better than what was expected. Optimism is returning, there have been a lot of conversations around incremental capex which will take place soon. Some of them have announced investment plans but the real capex will start coming in only in the next 9-12 months when the credit offtake will start. On the government side, earlier only a couple of areas were spending like defence and infrastructure but I am now told other departments are also being pushed to spend. The GST and tax collections are looking good, so the government has some spare money to spend.

What are the signs of concern for you?
Yes, there are signs of worry. While the third Covid wave has not come as expected after the festive season, some concerns remain on that front. On the upside, 57% of the population has got at least the first dose of vaccination. But we do see the fourth wave in Europe, so you cannot ignore that fact. We are hearing of shutdowns for unvaccinated people.

Plus there are supply chain issues, this is impacting India also especially the car industry. My impression is it could go on for another 12 months. Commodity prices remain high. Geo-political issues are worrisome, especially what is happening between the Western world and China.

What kind of capacity utilisation are you seeing and which sectors would see capex pick up?
The capex conversations are coming from infrastructure sectors and those supporting them. India’s exports are up 55%, so some of the industries which are reliant on exports also have a lot of capex coming through. Generally, as capacity utilisation starts touching 70-75%, they do need to start planning for capex as it doesn’t come overnight. My view is that once the supply chain issues in the auto industry go away that will also see demand pick up. On the service side, the bigger players have raised a lot of capital; so when things open up they could acquire assets at cheaper rates.



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HDFC Bank to hold 2,000 workshops to prevent fin frauds, BFSI News, ET BFSI

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Mumbai, Nov 15 (PTI) Largest private sector lender HDFC bank on Monday said it will be organising 2,000 workshops over the next four months for preventing financial frauds. The campaign will tell the customers about ways to safeguard themselves against financial fraud, starting with not disclosing any information on banking details.

A special focus is being given to the youth segment, where the bank will be targeting Senior Secondary Schools and Colleges, so that the awareness is ingrained, as per an official statement.

“Digitalization offers customers unparalleled convenience and access to banking services. With these conveniences comes a lot of risks of cyber frauds as well. The fraudsters are constantly on the prowl looking out for gullible customers,” it’s managing director and chief executive Sashidhar Jagdishan said.

The second edition of the campaign titled ‘Mooh Band Rakho’ was launched by K. Rajeswara Rao, Special Secretary, NITI Aayog. Lt General Dr Rajesh Pant, National Cyber Security Co-ordinator, was also present.



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Mcap of 6 of top-10 valued companies jump more than Rs 1.18 lakh cr, BFSI News, ET BFSI

Personal Finance

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Six of the 10 most valued companies together added Rs 1,18,383.07 crore in market valuation last week, with major contribution coming in from Reliance Industries Limited. During the last week, the 30-share BSE benchmark jumped 619.07 points or 1.03 per cent.

While Reliance Industries Limited, Tata Consultancy Services, Infosys, HDFC, Bajaj Finance and Kotak Mahindra Bank were the gainers, HDFC Bank, Hindustan Unilever Limited, ICICI Bank and State Bank of India emerged as laggards.

The valuation of Reliance Industries Limited zoomed Rs 59,437.12 crore to reach Rs 16,44,511.70 crore.

Infosys added Rs 29,690.9 crore to take its market valuation to Rs 7,48,580.98 crore. HDFC’s valuation gained Rs 17,187 crore to Rs 5,41,557.77 crore and that of Tata Consultancy Services jumped Rs 5,715.04 crore to Rs 13,03,730.66 crore.

The market capitalisation (mcap) of Kotak Mahindra Bank rose by Rs 3,301.84 crore to Rs 4,11,183.32 crore and that of Bajaj Finance by Rs 3,051.17 crore to Rs 4,57,355.51 crore.

In contrast, the valuation of HDFC Bank Ltd diminished by Rs 22,545.39 crore to Rs 8,60,436.44 crore. State Bank of India’s market valuation declined by Rs 17,135.26 crore to Rs 4,56,270.76 crore.

The valuation of Hindustan Unilever Limited dipped by Rs 3,912.07 crore to reach Rs 5,65,546.62 crore and that of ICICI Bank by Rs 3,810.99 crore to Rs 5,39,016.40 crore.

In the ranking of most valued firms, Reliance Industries Limited was leading the chart followed by Tata Consultancy Services, HDFC Bank, Infosys, Hindustan Unilever Limited, HDFC, ICICI Bank, Bajaj Finance, State Bank of India and Kotak Mahindra Bank. PTI SUM MR



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M-cap of eight of top-10 most-valued companies jumps over Rs 1.18 lakh cr, BFSI News, ET BFSI

Personal Finance

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New Delhi, Nov 7 (PTI) Eight of the top-10 most valued companies together added Rs 1,18,930.01 crore in market valuation last week, with Tata Consultancy Services and State Bank of India (SBI) emerging as the lead gainers. Last week, the BSE benchmark gained 760.69 points or 1.28 per cent.

A special one-hour Muhurat trading session was held on Diwali (November 4) to mark the beginning of the traditional Hindu calendar year, called ‘Vikram Samvat’.

Markets were closed on Friday on the occasion of ‘Diwali Balipratipada’.

Reliance Industries Ltd and ICICI Bank were the only laggards from the top-10 list.

The market valuation of Tata Consultancy Services zoomed Rs 40,782.04 crore to reach Rs 12,98,015.62 crore.

SBI added Rs 25,033.54 crore taking its valuation to Rs 4,73,406.02 crore.

The valuation of Infosys jumped Rs 17,158.49 crore to Rs 7,18,890.08 crore and that of HDFC gained Rs 10,153.08 crore to Rs 5,24,370.77 crore.

Bajaj Finance added Rs 7,502.68 crore taking its valuation to Rs 4,54,304.34 crore.

The market capitalisation (m-cap) of Hindustan Unilever Ltd jumped Rs 6,978.29 crore to Rs 5,69,458.69 crore and that of HDFC Bank rallied Rs 6,453.41 crore to Rs 8,82,981.83 crore.

Kotak Mahindra Bank‘s valuation went higher by Rs 4,868.48 crore to Rs 4,07,881.48 crore.

In contrast, the market capitalisation of Reliance Industries Ltd (RIL) declined Rs 24,612.17 crore to Rs 15,85,074.58 crore.

ICICI Bank’s valuation dipped Rs 13,680.32 crore to Rs 5,42,827.39 crore.

In the ranking of top-10 firms, RIL remained the most-valued company, followed by Tata Consultancy Services, HDFC Bank, Infosys, Hindustan Unilever Limited, ICICI Bank, HDFC, State Bank of India, Bajaj Finance and Kotak Mahindra Bank.



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HDFC reports 31.7% jump in standalone net profit in Q2

Banking & Finance

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Housing Development Finance Corporation (HDFC) Ltd on Monday reported a 31.7 per cent jump in its standalone net profit for the second quarter of the fiscal, led by higher dividend income as well as a drop in expenses.

It said that the individual approvals and disbursements grew by 67 per cent and 80 per cent, respectively, during the half-year ended September 30, 2021 compared to the corresponding period in the previous year. “Individual disbursements in the month of October 21 were the highest ever in a non-quarter end month,” it further said.

Spike in total income

For the quarter ended September 30, HDFC had a standalone net profit of ₹3,780.5 compared to ₹2,870.12 crore in the corresponding quarter last fiscal. Its total income increased by 4.2 per cent to ₹12,226.39 crore in the second quarter of the fiscal as against ₹11,732.70 crore in the same period last fiscal.

The net interest income for second quarter of the fiscal rose by 13 per cent to ₹4,108.51 crore from ₹3,646.54 crore a year ago. The net interest margin was 3.6 per cent for the quarter under review as against 3.7 per cent for the first quarter of the fiscal. Dividend income shot up to ₹1,171.26 crore in the July to September 2021 from ₹322.97 crore a year ago.

Home loans demand

“The demand for home loans continues to remain strong. Growth in home loans was seen in both the affordable housing segment as well as in high end properties. The increasing sales momentum and new project launches augurs well for the housing sector,” HDFC said in a statement on Monday.

The collection efficiency for individual loans on a cumulative basis improved to stand at over 98 per cent during the quarter ended September 30. The provisions as at September 30, 2021 stood at ₹13,340 crore

As per regulatory norms, the gross non-performing loans as at September 30, 2021 stood at ₹10,341 crore. This is equivalent to 2 per cent of the loan portfolio compared to 2.24 per cent as on June 30, 2021.

Expected credit loss was ₹452 crore for the second quarter of the fiscal, marginally higher than ₹436 crore a year ago. This was however, a 34.1 per cent drop from the expected credit loss of ₹686 crore as of June 30, 2021.

As at September 30, 2021, loans restructured under the RBI’s resolution framework for Covid-19 related stress (OTR 1 and 2.0) was equivalent to 1.4 per cent of the loan book compared to 0.9 per cent as at June 30, 2021.

Of the loans restructured, 63 per cent are individual loans and 37 per cent are non-individual loans. Of the total restructured loans, 35 per cent is in respect of just one account. Assets under management increased by 10.6 per cent to ₹5.97-lakh crore as of September 30 from ₹5.4-lakh crore a year ago.

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HDFC Q2 net profit up 32%

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Housing Development Finance Corporation (HDFC) Ltd reported a 31.7 per cent jump in its standalone net profit for the second quarter of the fiscal at ₹3,780.5. Its net profit was ₹2,870.12 crore in the corresponding quarter last fiscal.

The net interest income for the half year ended September 30, 2021 stood at ₹8,255 crore compared to ₹7,039 crore in the previous year, representing a growth of 17 per cent.

The reported Net Interest Margin was 3.6 per cent.

“The demand for home loans continues to remain strong. Growth in home loans was seen in both the affordable housing segment as well as in high end properties. The increasing sales momentum and new project launches augurs well for the housing sector,” HDFC said in a statement on Monday.

During the half-year ended September 30, 2021, individual approvals and disbursements grew by 67 per cent and 80 per cent respectively compared to the corresponding period in the previous yea

Individual disbursements in the month of October 21 were the highest ever in a non-quarter end month, it further said.

The collection efficiency for individual loans on a cumulative basis improved to stand at over 98 per cent during the quarter ended September 30, 2021.

The provisions as at September 30, 2021 stood at ₹13,340 crore

As per regulatory norms, the gross non-performing loans as at September 30, 2021 stood at ₹10,341 crore. This is equivalent to 2 per cent of the loan portfolio compared to 2.24 per cent as on June 30, 2021.

As at September 30, 2021, loans restructured under the RBI’s Resolution Framework for Covid-19 Related Stress (OTR 1 & 2.0) was equivalent to 1.4 per cent of the loan book (as at June 30, 2021: 0.9 per cent of the loan book). Of the loans restructured, 63 per cent are individual loans and 37 per cent are non-individual loans. Of the total restructured loans, 35% is in respect of just one account.

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India Post Payments Bank and HDFC Ltd partner to offer home loans

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Mortgage lender HDFC Ltd and India Post Payments Bank (IPPB) have entered into a strategic alliance to offer home loans to nearly 4.7 crore customers of IPPB.

“Leveraging its extensive and robust country-wide network of 650 branches and over 1,36,000 banking access points (post offices), IPPB aims to make HDFC Ltd’s home loan products and its expertise available to its customers across India,” the two said in a statement on Tuesday.

The partnership aims to facilitate HDFC Ltd’s home loans to customers, especially in unbanked and underserved areas. IPPB will offer housing loans through nearly 1,90,000 banking service providers including postmen and Gramin Dak Sevaks.

J Venkatramu, Managing Director and CEO, IPPB said, “Complemented by our robust network and HDFC’s leadership in the housing finance market, the alliance aims to make housing loans available and accessible, using a digitally-enabled agent banking channel and position IPPB as a one-stop platform for all banking needs of customers, including credit.”

As per the MoU, credit, technical and legal appraisals, processing, and disbursement for all home loans will be handled by HDFC Ltd, while IPPB will be responsible for sourcing of loans.

Renu Sud Karnad, Managing Director, HDFC Ltd said, “IPPB has a strong presence across the country. This strategic alliance will go a long way to promote affordable housing in the remotest locations of our country.”

She further noted that housing is much more affordable today. “In the last couple of years, property prices have more or less remained the same in major pockets across the country while income levels have gone up. Record low-interest rates, subsidies under Pradhan Mantri Awas Yojana and the tax benefits have also helped,” she said.

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CCI nod for HDFC Bank’s stake buy in HDFC ERGO

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The Competition Commission of India (CCI) has approved the acquisition of 4.99 per cent shareholding in HDFC ERGO General Insurance Company (HDFC ERGO) by HDFC Bank.

It maybe recalled that HDFC Bank had in June said that its Board had given approval to buy more than 3.55 crore shares in group firm HDFC ERGO General Insurance Company for over ₹1,906 crore from the parent company Housing Development Finance Corporation (HDFC).

“Commission approves acquisition of 4.99 per cent of the outstanding equity share capital of HDFC ERGO General Insurance Company by HDFC Bank,” said a tweet by the CCI.

Meanwhile, an official release said that the Acquirer is a public listed banking company registered with the Reserve Bank of India, which provides a wide range of banking services covering commercial and investment banking on the wholesale side and transactional/branch banking on the retail side.

As a part of the retail banking segment, the acquirer also engages in the distribution of life and general/non-life insurance products.

The Target is a joint venture between HDFC and ERGO International AG and is engaged in the business of general/non-life insurance in India and offers a complete range of general/non-life insurance products, the release added.

Parexel International

Meanwhile, the CCI has also approved the acquisition of Parexel International Corporation by Phoenix Parentco, Inc.

The proposed combination envisages acquisition of 100 per cent of the equity shareholding of Parexel International Corporation (Target) by Phoenix Parentco, Inc. (Acquirer). The Acquirer is jointly controlled by EQT Fund Management S.à r.l. (EQT) and the Goldman Sachs Group, Inc. (Goldman Sachs).

The Target is headquartered in Durham, USA. It provides biopharmaceutical outsourcing services to biopharmaceutical companies. The global activities of Target can be categorised into broad segments viz. clinical solutions and consulting, the release added.

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HDFC Bank’s recast loans rise to 1.7%, NPAs ease, BFSI News, ET BFSI

Banking & Finance

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Mumbai: HDFC Bank has reported a significant increase in restructured loans under the Covid relief scheme. Analysts are concerned that a large chunk of these loans might turn into non-performing assets (NPAs).

On the positive side, the bank has reported an improvement in gross NPA ratio by 12 basis points (100bps = 1 percentage point) quarter on quarter to 1.35%. Its subsidiary HDB Financial Services also reported a improvement in GNPA to 6.1% from 7.8% in the corresponding quarter last year.

“However, the restructuring pool for the bank surged sharply quarter on quarter to Rs 20,300 crore (1.7% of loans vs. 0.68% in Q1), mainly led by liberal restructuring in the personal loan book. As a prudent strategy, the bank made additional Rs 1,200 crore provisions in Q2 and now carries a contingent plus floating buffer of Rs 9,200 crore (0.8% of loans),” said Anand Dama of Emkay Global in a research note.

Addressing analysts on Saturday, HDFC Bank chief credit officer Jimmy Tata said, “Restructured loans are considered while making the provisions. If there were to be another shock, the balance sheet needs to be much more resilient, historically we have been conservative and our stance does not change”. He added that the bank was monitoring the restructured loan portfolio based on both pre- and post-Covid behaviour of the borrower. “We do not think the impact will be more than 10-20bps on our NPAs at any point in time,” he said.

The country’s largest private lender on Saturday reported a net profit of Rs 8,834 crore for the quarter ended September 2021, up 18% from the previous year.



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