HDFC Bank’s Assets Mix To Tilt In Favour Of Retail

Font Size

Print

Feedback

Email

Discuss

Mumbai, August 22:: HDFC Bank, the country’s second-largest private sector bank, expects its assets in retail business to outpace that in wholesale. The assets mix may be in the ratio of 50:50 or even a higher component of retail assets, in the next three years’ time.

“The growth in retail business is faster than in wholesale. Currently, 25-26 per cent of assets is retail and month-on-month, what the bank is booking in retail is around 60 per cent. Retail is gaining in importance and this trend will continue and over a three-year period, the mix will be 50:50 or even more than that,” HDFC Bank managing director Aditya Puri told FE in an interview. Strengthening macro-economic parameters, burgeoning middle-class population and changing demographic pattern would be key drivers of growth in retail business, Mr Puri said. “An emerging psychological shift among the younger generation to live on borrowed money and pay for that as they go along rather than save, save and wait will also lead to a boom,” he added.

“Retail market in the country is large enough and players can grow despite increasing competition. Positioning between a nationalised bank and a foreign bank is no longer a niche, as now, every bank is talking about that. It was a niche when we started, but now, any person who is literate and needs at least two or three retail banking products is our target customer,” he added.

About 75 per cent of the market is still with nationalised banks and private sector banks are gaining 3-4 per cent business. The market is growing at 10-15 per cent.

Due to continuous growth in the market size and the market share of private banks, the market is very big for a long time to come, he said. On the corporate side, the bank will continue to focus on the top tier and triple-A rated companies. “In that, we have to focus on supply chain management and want to deal with their vendors and distributors. We are not in the small and medium enterprises in the true sense. It is a consequence of our focus on top tier corporates,” he says, adding that dealing with an established supplier or vendor of a large corporate eliminates market risk.