HDFC is now 4th in world’s most valuable banks list

HDFC Bank will take over its parent, housing finance major HDFC, on Saturday. Following the reverse merger, the country’s first home finance company, would cease to exist. HDFC Bank on April 4, 2022, agreed to take over its parent, which is the largest pure-play mortgage lender, in a $40-billion all-stock deal, creating a financial services titan with a combined asset of over ₹ 18 lakh crore.

The new HDFC Bank entity will have around 120 million customers — that’s greater than the population of Germany. It’ll also increase its branch network to over 8,300 and boast of a total headcount of more than 1,77,000 employees. The tie-up of HDFC Bank Ltd. and Housing Development Finance Corp. creates a lender that ranks fourth in equity market capitalisation, behind JPMorgan Chase & Co., Industrial and Commercial Bank of China Ltd., and Bank of America Corp., according to data compiled by Bloomberg. It’s valued at about $172 billion.

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The total business of the merged entity stood at ₹ 41 lakh crore at the end of March 2023. With the merger, the net worth of the entity would be over ₹ 4.14 lakh crore. The combined profit of both entities was to the tune of about ₹ 60,000 crore at the end of March 2023. It will have combined asset of over ₹ 18 lakh crore. The combined shares of the HDFC twins will have the highest weighting on the indices at close to 14 per cent, much higher than the present index heavyweight Reliance Industries with a 10.4 per cent weightage.

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HDFC surges ahead of banks including HSBC Holdings Plc and Citigroup Inc. The bank will also leave behind its Indian peers State Bank of India and ICICI Bank, with market capitalisations of about $62 billion and $79 billion, respectively, as of June 22.