HDFC
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History
Till 2023 June paragraph
From: June 28, 2023: The Times of India
See graphic:
HDFC, a timeline- 1911- 2023
Loans
2017: India’s 3rd biggest lender
HDFC Bank India's third most critical fin body: RBI, Sep 5 2017: The Times of India
SBI, ICICI Bank Are The First Two Lenders
The RBI on Monday added HDFC Bank to the list of systemically important banks, or banks that are considered too big to fail.The other banks on the list are the two largest lenders -SBI and ICICI Bank. Since 2015, the central bank has been identifying banks whose failure would impact the whole financial system.These banks are subject to more rigorous regulation and capital requirement.
HDFC Bank's inclusion in this category means that the bank would need to ad here to higher capital requirements. The positive side of being recognised as a systemically important bank is that investors would feel more secure in parking bulk funds in these institutions as they are too big to fail. For the purpose of addi al capital requirement, tional capital requirement, the RBI categorises banks into five buckets based on the size with capital requirement increasing progressively for each bucket. ICICI Bank and HDFC Bank are in the first bucket, requiring an additional tier I capital of 0.1% of risk-weighted assets (loans) for FY18 and additional 0.15% from April 2018. SBI, being a much bigger bank, requires additional tier I capital of 0.3% of its loans with additional requirement of 0.45% from April 2018.
HDFC Bank's total balance sheet size as of June 30, 2017 was Rs 8,95,653 crore as against Rs 7,55,631crore as of June 30, 2016 -an increase of 33%. The bank's deposits as of June 30, 2017 were Rs 6,71,376 crore -an increase of 17% over June 30, 2016.
HDFC, HDFC Bank merger
2022: A backgrounder
Sandeep Singh , George Mathew, April 7, 2022:’’The Indian Express
HDFC Bank and HDFC Ltd announced the merger of the two entities, setting the stage for one of the biggest deals in the Indian financial sector. The announcement of the merger led to a sharp rise in the share prices of the two entities which were up by over 7 per cent in the early trading hours.
HDFC Bank said that the transaction is expected to close over the next 18 months, subject to completion of regulatory approvals and other customary closing conditions.
What is the plan of merger?
As per the transaction structure, HDFC Limited, India’s largest housing finance company with Assets Under Management (AUM) worth Rs 5.26 trillion and a market cap of Rs 4.44 trillion will merge with HDFC Bank, India’s largest private sector bank by assets with a market cap of Rs 8.35 trillion.
The subsidiary or associates of HDFC Limited will also be transferred to HDFC Bank.
What is the share swap ratio of the transaction?
Shareholders of HDFC Limited, as on record date, will receive 42 shares of HDFC Bank for 25 shares of HDFC Limited.
How will the ownership change?
Post the merger, HDFC Limited’s shareholding in HDFC Bank will be extinguished and HDFC Bank will be 100 per cent owned by public shareholders. Existing shareholders of HDFC Limited will own 41% of HDFC Bank.
How will the merger benefit the two entities?
While this will improve the ability to cross-sell products to a larger customer base, the move will help them leverage their distribution across urban, semi-urban and rural geographies. The combined balance sheet of Rs 17.87 trillion and Rs 3.3 trillion net worth will enable larger underwriting at scale.
