HDFC Bank’s Mega Merger: Creating a Financial Powerhouse Worth $273.77 Billion
Ira Singh
7July’23
In a groundbreaking move that is set to reshape the financial landscape, HDFC Bank has announced a mega merger that will create a financial powerhouse with a staggering worth of $273.77 billion. The merger, which brings together HDFC Bank with several prominent financial institutions, marks a significant milestone in the banking sector and sets the stage for a new era of financial services in the global market.
HDFC Bank, one of India’s leading financial institutions, announced on Wednesday that its merged loan book with Housing Development Finance Corporation (HDFC) reached approximately 22.45 trillion rupees ($273.77 billion) at the end of the June quarter, Reuters reported. This milestone follows the completion of the much-anticipated $40 billion merger between HDFC Bank and HDFC on July 1, making it the largest merger in India’s corporate history and propelling the bank into the esteemed list of the world’s top 10 banks based on market capitalisation.
According to HDFC Bank, its loan book experienced a significant 13.1 per cent growth in the June quarter compared to the previous year,as per media reports.Furthermore, the merged entity reported that its deposits surged to around 20.64 trillion rupees by the end of June, marking a notable 16.2 per cent increase from the previous year.
HDFC Bank also revealed that the combined entity’s liquidity coverage ratio, a crucial measure of the bank’s cash-like assets, stood at approximately 120 per cent on a proforma basis for the quarter ending June 30, according to sources.
HDFC Bank reported impressive growth in its retail book, which rose by 20 per cent compared to the previous year, while commercial and rural banking loans experienced a similar growth rate of 20 per cent. Corporate and other wholesale loans showed an 11 per cent year-on-year increase, according to sources.
The HDFC Bank’s mega merger represents a watershed moment in the financial industry, bringing together formidable players and paving the way for a new era of financial services. As the combined entity prepares to embark on its transformative journey, it is poised to reshape the banking landscape and set new benchmarks for the industry as a whole.
It’s important to note that due to the timing of HDFC’s financial book closure a few days before June 30, some of the merged entity’s numbers are not directly comparable to the same period last year, as stated by the bank.