HDFC Bank Current Affairs - 2020

HDFC Bank becomes third Indian company to cross $100 bn M-cap

HDFC Bank Ltd has crossed the $100 billion market capitalization (M-Cap) in intraday trading, thus becoming only the third company in India to achieve this milestone. However, it closed below $100 billion mark at $99.5 billion. HDFC is one of India’s largest private-sector lenders.

Key Highlights

HDFC is now in league of Reliance Industries Ltd (RIL), which has a market value of $140.74 billion, and Tata Consultancy Services Ltd. (TCS) that has a market capitalization of $114.60 billion.

HDFC Bank now ranks 110th in the list of world’s most valued firms. However, it ranks 26th among most valued banks and financial companies around the world that have a market capitalization of more than $100 billion.

The surge in HDFC Bank’s share price comes after most analysts remain bullish on stock. Investors continued to buy stock in hope that lender would report consistent earnings performance, stable asset quality, steady 20% profit growth and healthy advances growth.

With its capital well above regulatory requirements as well as higher retail focus, financial analysts expect HDFC Bank to deliver strong credit growth going forward. Also higher focus on digitization and productivity along with cost rationalization is likely to result in better profitability growth.

Branches of Vijaya, Dena Bank to operate as outlets of Bank of Baroda

The Reserve Bank of India (RBI) has stated that all branches of public sector lenders Vijaya Bank and Dena Bank will function as branches of Bank of Baroda (BoB) from April 1, 2019, and the proposed merger Bank of Baroda with Dena and Vijaya Bank will be affected from April 1.

Plan of Merger

As per the proposed merger plan, shareholders of Vijaya Bank will get 402 equity shares of BoB for every 1,000 shares held and the shareholders of Dena Bank will receive 110 equity shares of BoB for every 1,000 equity shares held.

The boards of Vijaya Bank and Dena Bank will stand dissolved. The entire share capital of Vijaya Bank and Dena Bank will stand cancelled and the shares of both these banks will also stand delisted from stock exchanges.

Following the merger of these state-owned banks, BoB will become the third largest bank in India after the State Bank of India and HDFC Bank.

The consolidated bank will have over 9,500 branches, 13,400 ATMs, 85,000 employees to serve 12 crore customers. The bank will have a business mix of Rs 15 lakh crore of balance sheet, with deposits and advances of Rs 8.75 lakh crore and Rs 6.25 lakh crore, respectively.