HDFC Bank, CBoP share swap at 1:29

Written by Banking Bureau | Mumbai, Feb 25 | Updated: Feb 26 2008, 06:32am hrs
The largest consolidation in Indias private sector banking came a step closer to fruition after the boards of HDFC Bank and Centurion Bank of Punjab (CBoP) agreed on a share swap ratio of 1:29.

The share exchange ratio is in line with the suggestions of Dalal & Shah and Ernst & Young, which acted as independent joint valuers to the transaction.

CBoPs chairman Rana Talwar and managing director Shailendra Bhandari would join the HDFC Bank board as non-executive director and executive director, respectively. More nominations are likely.

Since I am on the board of many financial institutions, including Fortis Bank, the issue of clash of interests may arise and I will have to sort it out soon with my new board members, said Talwar.

The combined entity would be known as HDFC Bank and would have the largest nationwide network of 1,148 branches, a deposit base of around Rs 1,20,000 crore and net advances of around Rs 85,000 crore. The balance sheet size of the merged HDFC Bank would be over Rs 1,50,000 crore.

The deal is would enhance the customer base of HDFC bank by more than 30% to around 1.3 crore.