The HDFC Bank-CBoP merger is expected to be a win-win for both banks in terms of both asset size and footprint, as the market gets competitive by the day.
While CBoP is concentrated in the northern and southern parts of the country, HDFC Bank is focused throughout India.
They will be expanding their footprint overseas as well very soon.
HDFC Bank has 170 branches in the north and 140 branches in the south, while HDFC Bank has about 250 branches in the north and nearly 150 branches in southern India.
On the net interest margin front, HDFC Bank has a net interest margin of 4.3% while CBOP has an NIM of 3.6%. The current and savings account (CASA) stands at 50.9% and 24.5% for HDFC Bank and CBOP, respectively.
Talking about the NPAs, HDFC Bank has a very low NPA of 0.4% as against 1.69% for CBoP.
The capital adequacy for HDFC Bank stands at 13.8% as against 11.5% for CBoP. Analysts say the merger will create a strong banking entity.
?Based on the financial parameters, if the merger goes through, the new HDFC Bank will be termed as the third largest bank in India after SBI and
ICICI Bank,? said a banking analyst. CBoP has a good amount of foreign holding, apart from Rana Talwar?s Sabre Capital, which holds about 20% together with other entities.
About 10.7% holding on CBoP is in the form of GDRs. ?There is a possibility that Sabre too may exit CBoP,? said the source. CBoP has about Rs 20,000 crore in deposits while HDFC Bank has nearly Rs 1,00,000 crore. On advances, CBoP has Rs 15,000 crore as against Rs 71,500 crore for HDFC Bank.