HDFC Bank makes loan grab as bad debts hit rivals

Mumbai: HDFC Bank Ltd, an Indian lender whose earnings have risen by at least 20% every year since 1998, is seeking to bolster its share of the nation’s corporate-loan market as surging bad debts hold back rivals.

The lowest nonperforming-loan ratio among the biggest Indian lenders and the highest market capitalization is allowing HDFC Bank to invest in operations and extend more credit, as counterparts including State Bank of India and ICICI Bank Ltd combat soured debt. Overseas banks refocusing on their local markets is also presenting an opportunity for the Mumbai-based lender, whose profit-growth record is unmatched by any of the world’s 200 biggest lenders, according to data compiled by Bloomberg.

“Some of the existing players are going out and new players are taking a higher share,” said K. Balasubramanian, group head for corporate banking at HDFC Bank, which has a market capitalization of Rs.3.2 trillion. “We are focusing on expanding the client base.”

Private banks in India are extending loans faster than their state-run counterparts, which account for more than 70% of the total outstanding advances. Prime Minister Narendra Modi is seeking a revival in credit growth, which slumped to a 22-year low of 8.68% in June, as he seeks to maintain the fastest pace of expansion among the world’s major economies.

HDFC Bank