The largest home loan lender has been and will continue to be SBI: Director Dinesh Khara

MUMBAI: State Bank of India (SBI) has led the house loan market and will continue to do so, according to Chairman Dinesh Khara, who stated on Friday that the bank’s mortgage book was worth over Rs 6.52 lakh crore as of the June quarter, up about 14% year over year.

When reporters questioned him about his opinions on the mortgage market following the withdrawal of pure-play lender HDFC from the market as a result of its merger with HDFC Bank on July 1, he made the claim.

Before the largest merger (USD 40 billion), HDFC Bank was not involved in the home loan market because it used to sell new home loan accounts to its parent company HDFC for a charge. As a result, the bank only had a tiny book of house loans when it amalgamated with the parent company.

The combined mortgage book of HDFC Bank has been estimated by various analysts to be worth Rs 7.3 lakh crore as of March 31, 2023, however, the bank did not disclose these figures in the June quarter earnings, even though the merger became official on July 1 and HDFC shares ceased to exist on July 13. SBI’s book at that time was merely Rs. 6.4 lakh crore.

When SBI’s book surpassed Rs 5 lakh crore in February 2021, just barely surpassing HDFC’s at the time, it overtook HDFC as the established market leader in terms of home loan assets. At that time, the largest lender in the country held a market share of 23.5% of the house loan market, compared to HDFC’s 17%.

After the earnings announcement, when it revealed its highest-ever profits of Rs 16,884 crore for the quarter, Khara told PTI Video in an interaction, “We have been the largest, we are, and we will continue to have the largest home loan book.”

Khara reported that its house loan book increased 13.47% in the June quarter, from Rs 6,40,680 crore in the March 2023 quarter to Rs 6,52,548 crore (more than Rs 6.52 lakh crore), and from Rs 5,75,075 lakh crore in the June 2022 quarter.

Although Khara omitted a goal for the entire year, he claimed that “in fact, in July we have grown more than 15%, and going forward and especially with the festival season coming closer I see this growing far more.”

Khara had stated that the bank had set an internal target to double the book to Rs 10 lakh crore in the following five years and to Rs 7 lakh crore by FY24, something that appears to be very doable given the current run rate and the loan outstanding. The bank crossed the Rs 5 lakh crore mark in February 2021.