HDFC’s advantage has been its access to diversified resources. It tapped into new lenders through external commercial borrowings and masala bonds. Its strength has been ability to seamlessly straddle between wholesale and retail funding. They say, “little by little, a little becomes a lot.” This best characterises the growth in our retail deposits.
In the first half of FY19, HDFC
was often asked why it was not growing as aggressively as others in certain segments of the commercial real estate market. It held ground by consciously staying away from funding what we perceived were riskier assets, he said.
The nature of queries changed in the second half of the year. Market asked what is that HDFC
did differently that enabled us to stay resilient and be the preferred choice in the flight to safety. Perhaps a combination of experience and adhering to our risk appetite held us in good stead, he said.
In the current environment, the company had to work extremely hard to preserve asset quality. Non-performing loans have been considerably lower than several others in the financial sector. but, the company cannot rest on these laurels, he noteds.