A stray remark by the chief executive officer of India?s largest private lender ICICI Bank, Chanda Kochhar, suggesting her rivals come second best in deal making has raised the hackles of Aditya Puri, managing director of HDFC Bank.
In May, shortly after announcing ICICI Bank?s planned merger with Bank of Rajasthan, Kochhar said the buy was a bigger bang for the buck than all the deals done so far by local private banks.
?We have paid Rs 6.5 crore per branch that is the existing market capitalisation per branch for the old private sector banks. It is much cheaper than the preceding deals done in the private sector industry,? Kochhar told a television news channel late May as she tried to build a persuasive argument for the acquisition.
On Thursday, at its annual general meeting, several shareholders of HDFC Bank, seemingly swayed by Kochhar?s view, asked Puri if the acquisition of Centurion Bank of Punjab was a regretful pricey buy.
In 2008, HDFC Bank acquired Centurion Bank of Punjab and paid about Rs 26 crore per branch. It did not take long for a normally unflappable Puri to lose his cool.
?What they (ICICI Bank) want to do with BoR is their problem and any comment by them on what we have done is not the right thing to do. You are my shareholders, you I will answer. Unko agar problem hai (if they have a problem) I can?t help it,? Puri said. He did not find Kochhar?s too-good-a-deal argument convincing.
?Centurion Bank of Punjab was valued on the basis of market price, earnings, book value and we gave them 10% below the quoted market price, unlike the three times market price (ICICI Bank offered),? he said. Also, Puri reckons comparisons are erroneous.
?We did not buy it for branches. They may have bought BoR for branches…It was bought for a combination of businesses… I will show you it was a very good acquisition,? he said. And right on cue, senior colleagues of Puri closed ranks to drive home the advantages the bank has reaped after acquiring Centurion Bank of Punjab. Kochhar could not be reached for comment.