HDFC bank to buy CBoP

One of the largest private sector bank,HDFC is all set to buy Centurion Bank of Punjab in an all stock deal of about Rs 10,000 crore. This is the biggest merger deal in Indian banking history.The swap ratio for the deal is not yet decided. Let us see how will HDFC Bank benefit from this:

1. Centurion has around 170 branches in northern India and 140 branches in Southern India so HDFC’s presence in these parts of the country specifically in states of Punjab, Haryana and Kerala will receive a boost

2. About 2.5 million customers of CBoP will become a part of HDFC Bank

3. Innovative services can be offered to the clients of HDFC post merger

4. HDFC will become the seventh largest bank in the country in terms of assets post merger

A similar merger was thought, about six years back between the two banks but it didn’t materialized due to valuation reasons. But after such a long time this deal is finally getting materialized on account of good understanding between the top management of the two companies.