Hdfc Bank To Fund Heavy Vehicles

HDFC Bank is entering into heavy- and light-commercial vehicle (HCV, LCV) financing, which is currently dominated by the non-banking finance companies (NBFCs).

Aditya Puri, managing director of the bank, said: "We will start offering loans for buying HCVs and LCVs from January 2002. We are targeting fleet operators in the cities where we have a presence."

He said the bank was aiming to become one of the top three HCV, LCV financiers in the next two years. "Since we are already into financing two- and four-wheelers, the entry into commercial vehicle financing is a natural progression," Puri added.

"The banking relationships that we have with HCV, LCV manufacturers such as Ashok Leyland, Tata Engineering, and Mahindra & Mahindra will help us in building this business," he said.

The bank will face competition from well-entrenched players such as ICICI and, Kotak Mahindra, apart from regional leaders such as Sundaram Finance and Cholamandalam Finance.

However, it is expected to have a definite edge over these NBFCs as its cost of funds is much lower owing to its commercial bank status.

Meantime, signalling its strong retail intent, HDFC Bank will be closing its first securitisation deal of loan assets by the end of this year.

"The termination of our first securitisation deal will give us a AAA portfolio and a good cash margin," said Puri.

HDFC Bank has seen consistent growth in business during the last six months, according to Puri. He said the bank had seen increase in credit offtake due to its success in weaning business away from rivals.