India’s HDFC now world’s 4th most valuable bank after merger with parent

With the merger, HDFC goes ahead of banks such as HSBC Holdings Plc and Citigroup Inc.

• Shubham
• 01 July, 2023

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By: Shubham Ghosh

IN a major development in India’s banking sector on Saturday (1), HDFC Bank took over housing finance major HDFC (Housing Development Finance Corp), its parent, to become one of the world’s most valuable banks, throwing a challenge to the dominance of American and Chinese lenders, Bloomberg reported.

Following the merger, the HDFC home finance company ceased to exist.

HDFC Bank agreed on April 4 last year to take over its parent in a $40 billion (£31.4 billion) all-stock deal, setting up a major financial services company with a combined asset of Rs 18 lakh crore (£172.5 billion). The new entity will have around 120 million customers, a number which is bigger than the population of Germany. The bank also increased its branch network to more than 8,300 and the employee headcount to over 177,000.

The merger also created a lender placed fourth in equity market capitalisation, trailing only JPMorgan Chase & Co., Industrial and Commercial Bank of China Ltd. and Bank of America Corp., as per data shown by Bloomberg.

With the merger, HDFC goes ahead of banks such as HSBC Holdings Plc and Citigroup Inc. It will now surge ahead of its Indian peers State Bank of India and ICICI Bank, with market capitalisations of about $62 billion (£48.7 billion) and $79 billion (£62.1 billion), respectively, as of June 22.

It also marked a transformation of the HDFC Bank into a financial services conglomerate offering financial services — from banking to insurance and mutual funds through its subsidiaries, NDTV reported citing the bank’s sources.