HDFC Bank acquires stake in Singapore-based PE fund manager

HDFC Bank on Monday announced that it to acquire a 20 per cent or more stake in Griha Pte, a wholly owned subsidiary of HDFC Investments, after it has received regulatory clearance from the Monetary Authority of Singapore (MAS). 

“Monetary Authority of Singapore (MAS) vide its e-mail dated April 24, 2023 to Griha Pte, has granted its approval for acquisition of shares in Griha Pte. by HDFC Bank, which would result in HDFC Bank – (i) acquiring or holding, directly or indirectly, 20% or more of the issued share capital of Griha Pte.; or (ii) controlling, directly or indirectly, 20% or more of Griha Pte," said HDFC Bank in a regulatory filing. 

Griha Pte, founded in 2012, is a private equity fund manager headquartered in Singapore and registered with MAS. The entity is a foreign step-down subsidiary of the Housing Development Finance Corporation (HDFC). 

This comes days after HDFC Bank said it has received permission from the Reserve Bank of India (RBI) to increase stake in HDFC Life and HDFC ERGO to more than 50 percent. 

Banks are mandated to lend 40% of their loans as measured in terms of adjusted net bank credit (ANBC) to so-called priority sectors such as agriculture, housing and micro, small, and medium enterprises (MSMEs). ANBC is the net bank credit plus investments made by banks in non-SLR bonds. In an exchange notification, HDFC Bank said it had been informed that the combined entity must include one-third of HDFC’s loan book to calculate the priority sector lending (PSL) required at the end of the first year after the merger. Priority sector requirements on the rest of HDFC’s loan book can be met over the next two years. 

HDFC Bank posted 19.8% growth year-on-year in net profit to â‚¹12,047.5 crore for the fourth quarter ending March 31, 2023 (Q4FY23). Net interest income (NII) jumped by 23.7% to f 23,351.8 crore in the quarter under review. The bank showed healthy growth in deposits and credit, while provisions dropped steeply in Q4. Also, the bank's asset quality continued to be stable. 

On the topline front, the bank posted NII which is the difference between interest earned and interest expended, at â‚¹23,351.8 crore in Q4FY23 --- rising by 23.7% from â‚¹18,872.7 crore for the quarter that ended March 31, 2022. The core net interest margin was at 4.1 % on total assets, and 4.3% based on interest-earning assets. 

HDFC Bank shares ended 0.88% up at â‚¹1,688.45 on BSE.