HDFC to merge with HDFC Bank on July 1; move propels bank towards prominent position among global financial institutions

Mumbai (Maharashtra) [India], July 1 : HDFC Bank MD and CEO Sashidhar Jagdishan has said that the completion of the merger of HDFC Ltd with HDFC Bank propels the bank towards a prominent position among global financial institutions, unifying "two influential brands with shared values and a mutual commitment to superior customer service".

"With HDFC Life, HDFC Asset Management Company, HDFC ERGO and HDFC Capital Advisors joining us as subsidiaries, we are now able to offer you a more comprehensive and diversified range of bundled offerings across payments, savings, insurance, brokerage, loans and investments," Jagdishan said in a letter to customers.

HDFC Bank on Friday announced the successful completion of the merger of HDFC Ltd. with and into HDFC Bank, following the receipt of all requisite shareholder and regulatory approvals.

HDFC Bank and HDFC Ltd had announced a decision to merge on April 4 last year, subject to obtaining the requisite consent and approvals and had indicated a time frame of 15 to 18 months for the process to be concluded.

An HDFC Bank release said that the boards of both companies at their respective meetings held on Friday noted that the merger would be effective from July 1, 2023.

"The merged entity inter-alia brings together significant complementarities that exist between both the entities and is poised to create meaningful value for various stakeholders, including respective customers, employees, and shareholders of both the entities from increased scale, comprehensive product offering, balance sheet resiliency and ability to drive synergies across revenue opportunities, operating efficiencies and underwriting efficiencies," the release said.

It said pursuant to the share exchange ratio as per the merger scheme, HDFC Bank will issue and allot to eligible shareholders 42 new equity shares of the face value of Re. one each, credited as fully paid-up, for every 25 equity shares of the face value of two rupees each fully paid-up held by such shareholder in HDFC Ltd. as on the record date i.e. July 13, 2023.

"This is a defining event in our journey and I'm confident that our combined strength will enable us to create a holistic ecosystem of financial services. We're truly happy to welcome the talented team of HDFC Ltd. into the HDFC Bank family. I believe our journey will be defined by agility, adaptability, and a relentless pursuit of excellence. As we navigate the path ahead, we will embrace challenges as opportunities, learn from our experiences, and strive to be the benchmark of success and integrity in the financial services industry," Jagdishan had said.

The release said that the merger of "India's largest Housing Finance Company, HDFC Ltd. with the largest private sector bank in India combines the strengths of a trusted home loan brand with an institution that enjoys a lower cost of funds".

"The larger net worth would allow a greater flow of credit into the economy. It will also enable underwriting of larger ticket loans, including infrastructure loans and contribute further to nation building and employment generation," it added.

The release said that all employees of HDFC Ltd. as on the effective date become HDFC Bank employees.