HDFC, CBoP OK 1:29 swap ratio for merger

Written by Agencies | Mumbai, February 25: | Updated: Feb 25 2008, 21:19pm hrs
Paving the way for the creation of the country's largest private sector bank in terms of branch network, the boards of Boards of HDFC Bank and Centurion Bank of Punjab (CBoP) today approved the share swap ratio 1:29 for their proposed merger.

This means for every 29 shares of Re 1 each held in Centurion Bank of Punjab, the country's fourth largest private sector bank, a shareholder will receive one share of Rs 10 of HDFC Bank, the second largest lender in private sector.

Last Saturday, the boards of both the Banks had decided, in principle, to merge.

"It is a win-win situation for all stakeholders, shareholders, employees and customers of both banks," Parekh told reporters.

The combined entity will have a nationwide network of 1,148 branches, Housing Development Finance Corporation Ltd Chairman Deepak Parekh told reporters here.

Existing private sector leader ICICI Bank had close to 955 branches.

The deposits would climb up to Rs 1,20,000 crore, advances to Rs 85,000 crore while the balance-sheet size would swell to Rs 1,50,000 crore, Parekh said.

HDFC Bank Managing Director Aditya Puri will head the merged bank, while Jagdish Capoor will continue as non-executive Chariman.

Puri said the merger would be smooth as there were no integration bottlenecks.

"We have no integration and people issues...the overlap of branches of both banks is almost none," Puri said clarifying that there would be no downsizing.