Shobhana Subramanian / Mumbai Mar 27, 2009, 00:39 IST
Loan growth may slow down in 2009-10 as the company loses some market share.
Competition is not new to HDFC, after all ICICI Bank was a tough competitor when it went on a customer acquisition spree some years back. This time around, although ICICI may not be in a position to give HDFC a run for its money, public sector banks, especially State Bank of India (SBI) could.
The difference between four years ago and now is that money today is not yet cheap and certainly not as inexpensive as it was back in 2004 and 2005. Of course with bank loans to HDFC now treated as priority lending, the cost of funds for HDFC should come down. But should long-term rates go up, HDFC will feel the pinch.
That’s why the market sat up and took note when SBI kicked off an 8 per cent in- the- first -year product believing HDFC could lose some market share. In the recent rally, the stock which had plunged to a two year low, has gained 31 per cent to the Sensex’s 23 per cent. The good news is that transactions could start picking up in the second half of 2009 now that property prices have started trending down as have interest rates.
But although the home loan major believes it can manage a growth of 20 per cent in 2009-10, analysts are not so sure. CLSA points out that HDFC’s loan growth (pre-securitisation) would be around 15-17 per cent. One reason for this is that HDFC Bank may now hold back a higher proportion of loans that it originates; the bank currently sources just over a fourth of HDFC’s loans.
As a result HDFC’s operating income may increase by about 15 per cent in 2009-10 while its net profits should grow by about 10-12 per cent. HDFC has always scored when it comes to keeping bad loans in check, which is why a few delays or even defaults will not hurt the balance sheet. At Rs 1,653,the stock trades at around 2.8 times the estimated adjusted book value for 2009-10.
Attn : Existing HDFC Home Loan Customers - Join Yahoo Group
The existing customers of HDFC home loan have formed a group at Yahoo Groups by the name of 'hdfchomeloancustomers' to address the concerns of existing customers who are paying high interest rates. Please join the group and make it a success in reducing the rate of interest and getting better services from HDFC.
Please forward to all you know are HDFC customers
Posted by: vikas
April 14 , 2009, 22:18 IST
Hi Vivek,
I tried to find the group but unable to locate the correct address. Would you pls send me the link
Rgds
vikas
Content Guide
Competition is not new to HDFC, after all ICICI Bank was a tough competitor when it went on a customer acquisition spree some years back. This time around, although ICICI may not be in a position to give HDFC a run for its money, public sector banks, especially State Bank of India (SBI) could.
