Merger of Indian banking industry with foreign banking industry

Presented by:
34 35 36 37 38 Surendra Madiwala Kishan Parmar Bhavesh Ahir Sneha Patel Marcel Chettiar Slides 9-10 7-8 11-12 3-6 13-15

Introduction
According to Oxford Dictionary the expression merger means combing two commercial companies into one

Bank merger is an event of when previously distinct banks are consolidated into one institution

Merger between Centurion Bank and Bank of Punjab and HDFC

The centurion bank of punjab (formerly centurion bank) was an Indian private sector bank that provided retail and corporate banking services
The Bank's shares were listed on the major Indian stock exchanges and on the Luxembourg Stock Exchange. On 23 May 2008 HDFC acquired Centurion Bank of Punjab.

History of Centurion Bank

Centurion Bank was incorporated on 30 June 1994 It was a joint venture between 20th Century Finance Corporation and its associates and Keppel Group of Singapore through Kephinance Investment (Mauritius) On 29 June 2005, Centurion Bank and Bank of Punjab a merger of the two banks. The combined bank took as its name Centurion Bank of Punjab.

History of Centurion Bank

2006 Centurion Bank of Punjab acquired Kochibased Lord Krishna Bank (Lord Krishna acquired three commercial banks: Thiyya Bank, Josna Bank and Kerala Union Bank.)

2008 HDFC Bank acquired Centurion Bank of Punjab

About HDFC Bank

Promoted in 1995 by (HDFC), India's leading housing finance company, HDFC Bank is one of India's premier banks providing a wide range of financial products and services Over the last 13 years, the bank has successfully gained market share in its target customer franchises while maintaining healthy profitability and asset quality

Acquisition of Centurian bank of Punjab by HDFC

It is indeed one of the largest banking sector consolidation ever in India The acquisition makes HDFC Bank the seventh largest bank in terms of assets The total assets would rise to Rs.1,10,110 crore, with branch network of 1150, ATM network of 2100 and 27000 staff.

Main Highlights of Merger

The merger was effected using the pooling of interest method. The banks main task was to harmonize the accounting policies

The harmonizing was done to bring in more stringent provisioning requirements for identifying NPAs as the existing norms of the erstwhile CBoP were comparatively more relaxed.

Main Highlights of Merger

CBoP had a much lower CASA ratio of around 25% compare to 56% of Pre-merged HDFC Bank. By the end of the year, the target CASA ratio is around 47-48%. The cost/income ratio of the merged entity has increased to around 56% from 50% levels for standalone HDFC Bank. The increase was expected as CBoPs C/I ratio was around 60%.

KEY BUSINESS PARAMETERS (Rs Million)

BANKING MERGER.xlsx

AFTERMATH OF THE MERGER

Branch expansion/Size likely determinant of the merger HDFC Bank would emerge as the biggest private bank in terms of branches

Positive aspects of the merger

HDFC Bank to be largest private sector bank in terms of branch network

POST MERGER SNAPSHOT

BANKING MERGER.xlsx

Conclusion

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