HDFC Likely To Bring Down Home Loan Rates

HDFC Bank, mortgage finance major, is likely reduce lending rates if the central bank does not tighten rates or resort to a monetary squeeze by hiking the cash reserve ratio (CRR). Although interest rates have gone up during the first quarter of 2006-07, liquidity generated by forex inflows has helped bring down rates in the money markets. Towards July, interest rates have eased and borrowing costs have come down for institutional borrowers. Some banks, which had hiked their lending rates in the fourth quarter of last year, said they would bring down home loan rates. HDFC''s profits are expected to see substantial upside in the second quarter owing to exceptional items. HDFC would gain close to Rs 311 crore from the sale of its stake in Intelenet to Blackstone. In the second quarter, HDFC will also finalise a non-life partner to whom it will sell 74% stake in HDFC Chubb General Insurance at a premium. The second quarter would also see Rs 3,114 crore of capital coming in following the preferential allotment of equity shares to Carlyle Group through CMP Asia and Citigroup Strategic Holdings Mauritius.