HDFC Bank flies on success mantra
When reports surfaced in July that Indian newspaper publisher Deccan Chronicle Holdings Ltd was struggling for survival, several of its creditors were caught off-guard. Not HDFC Bank Ltd.
Even as Deccan, which also owned a glitzy cricket team, sought to reassure markets that it held enough assets to stave off a crisis, HDFC Bank was busy getting rid of the loans extended to the group, three sources with direct knowledge of the matter said. That agility paid off: Deccan has since lost its cricket franchise and its lenders, including heavyweight ICICI Bank Ltd , Axis Bank Ltd and a dozen others, have been left with bad loans totalling $750 million.
"Alertness and the ability to pick early signs of problems have helped", Paresh Sukthankar, executive director at HDFC Bank said, pointing to the bank's low bad loans of 0.9 percent of its book compared with 4.2 percent expected for the industry by March.
At a time when lenders across the world are battling slowing growth and rising loan defaults, HDFC Bank's conservative business model and its knack of delivering returns are proving unique, and offer a lesson for its hard-pressed competitors. HDFC Bank has posted profit growth of over 30 percent every year for the last decade, richly rewarding its investors. India's No.2 private sector bank earlier this year climbed to be the country's biggest by market value, ahead even of