HDFC Ltd Announces Mega Merger With HDFC Bank
HDFC Bank HDFC Ltd has announced its merger with HDFC Bank in a transaction that will help the latter build its housing loan portfolio, Economic Times reports.
The move is likely to enable HDFC Bank to bridge its gap with the State Bank of India (SBI) and help it scale its home loan portfolio by a huge extent.
“The value of HDFC Ltd is $60 billion. If you strip off the portion of their holding in us, it comes to $40 billion and that's the value of the deal,” Sashidhar Jagdishan, CEO of HDFC Bank, was quoted in a report by the Reuters.
Deepak Parekh, Chairman of HDFC Ltd, revealed that the lender has sought additional time from the Reserve Bank of India (RBI) to meet certain regulatory requirements such as cash reserve ratio (CRR) and the statuary liquidity ratio (SLR).
“HDFC Bank would benefit from a larger balance sheet and networth which would allow underwriting of larger ticket loans and also enable a greater flow of credit into the Indian economy,” a regulatory filing by HDFC read.
HDFC Bank has a customer base of 6.8 crore and this merger is slated to expand its loan book by 40 per cent.
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