HDFC Bank, which has the second-largest home loan assets, has decided to strategically leverage its large size to cross-sell multiple products and boost its CASA deposits base.

Post-merger with parent HDFC Ltd, the bank has seen market share accelerate, turnaround time reduce to almost one-third and cross-selling of CASA (current account savings account) deposits improve.

The incremental home loan disbursal market share has increased to 20% run-rate post-merger, said Arvind Kapil, Country Head - Mortgage Banking, Home Loan, LAP, HDFC Bank.

The country’s largest private sector bank is planning to launch a couple of products in the near term. By mid-March, HDFC Bank will launch a seamless straight through journey for home refurbishment loans. This can become a strong product offering for customers, Kapil said.

By April, the bank proposes to launch a ‘Home Saver’ product, which it believes will lay a robust foundation for a lucrative offering to the existing and prospective home buyers. 

“One of the biggest opportunities was to generate CASA and initial signs are encouraging. Pre-merger about 30% to 35% of incremental disbursals were to customers with an HDFC Bank savings account. This has reached about 80% of incremental disbursals, post-merger. The home loan business for the bank has become both an asset and liability generator and is growing sizeably. This leads to a higher stickiness quotient and a stronger customer connect with the bank for a longer duration,” said Kapil.

As a part of enhancing the cross-sell strategy, home loan customers will be able to avail of a wide range of products and services like consumer durable loans, credit cards, wealth advisory products, unsecured loans and home refurbishment loans.

HDFC Bank’s home loan book has reached Rs 6.84 lakh crore as of 31 December 2023 and is inching closer to rival State Bank of India’s leadership count of Rs 6.94 lakh crore.

The private sector lender has posted higher double-digit, year-on-year growth across its home loan business for the first six months after the merger. On a sequential basis, the bank has reported a growth of 3.6%.

The bank has renewed its focus on the self-employed segment. This will further increase opportunity size, the lender said.

Post-merger, the bank has already launched and expanded its product basket through banking surrogates as well as GST programmes for better assessment of such profiles.

On the operational front, the bank will convert all erstwhile HDFC Ltd.’s service centres to branches in a phased manner and its entire mortgage team will also become relationship managers. 

The bank has already commenced cross-selling its products and services through these service centres from 1 February 2024. 

“Going forward, cross-sell will be a continuing focus for both existing as well as new customers. The strength of this team is expected to be able to cross-sell at no incremental acquisition cost thanks to digital journeys,” Kapil said.

The bank believes that structural demand for housing will continue to be strong in the long run in India, due to a conducive environment. India is expected to have the largest working population by 2050, estimated at 900 million which is likely to give a major fillip to urbanisation in the country. This is projected to go up to 40% by 2030 from 34% today, it added.