HDFC sees 20 per cent growth in 2010

Housing Development Finance Corporation (HDFC) stated on Friday (February 20), it sees 20 per cent growth in home loans in financial year 2010 as demand slows. “There would be a 20 per cent loan growth in 2010,” affirmed HDFC Vice Chairman and Managing Director Keki Mistry.

The 20 per cent loan growth would be on quarter on quarter basis, Mistry said. Some quarters would witness more growth and some less growth, for many project prices have fallen he added. Mistry also mentioned, “The loan lending in this financial year was flat against last year. The interest rates are likely to fall by 50 basis points in the immediate future.”

Says Abhay Aima, Head, Equities and Private Banking, HDFC Bank, “The gloom-and-doom scenario is over-hyped, as risks are built into valuations with the exception of political risk.”

The laggards in 2009 will be commodities (metals), capital goods (due to order slowdown), real estate and IT (weak demand). With respect to return expectations from the market (Sensex), it ranges 10-12 per cent on the conservative side to as much as 35 per cent, by December 2009.

HDFC Bank’s ability to grow at over 30 per cent annually in the last nine years, along with superior credit risk management practices, which have helped it maintain asset quality - would ensure that, it will be among the least affected in a slowdown.

The bank’s focus on technology and superior margins, along with support from low-cost deposits will ensure profitable growth in the future. The merger of retail focused-Centurion Bank of Punjab (CBOP) with HDFC Bank effective May 23 (2008), will shore up revenues in the medium-term.

However, the synergies from the merger with start reflecting over 12-24 months, and boost profitability. Put together, the gains from organic and inorganic initiatives, will help the bank sustain growth rates in excess of its historical average of 29-30 per cent - and that too, in a profitable manner.

(Agencies)

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