HDFC Bank-HDFC Merger Presents A Massive Cross-Sell Opportunity, Says Keki Mistry
How India's largest merger will create more cross-sell opportunities, explains HDFC's Keki Mistry.
The merger between Housing Development Finance Corp. and HDFC Bank Ltd. will open up several new opportunities for the bank to expand on the mortgage lending business, according to Keki Mistry.
Of HDFC Bank's over 8 crore customers, around 2% have availed housing loans from parent HDFC, vice chairman and chief executive officer at the housing finance company told BQ Prime in an exclusive conversation. Moreover, only additional 5% of the customers have a housing loan from other lenders, he said.
"Roughly, 93% have not taken a (home) loan at all. So look at the ability to cross-sell...There is a massive opportunity," Mistry said.
HDFC grew its individual home loan book by about 17% year-on-year in FY23 on a large base, he said. As of March 2023, HDFC's individual loan book stood at Rs 4.99 lakh crore, out of its gross loan book of Rs 6.2 lakh crore. In this loan growth, business sourced by HDFC Bank stood at less than 30%.
"Going forward, the amount of business which can be sourced through the HDFC Bank network can be huge," Mistry said.
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HDFC is set to merge into HDFC Bank, a lender it created in the mid-90s. This will help create India's second largest bank, with a loan book of over Rs 19 lakh crore. It will be right behind State Bank of India. The merger, first announced in April 2022, is now close to completion.
While addressing reporters on Tuesday, Mistry said the boards of both lenders will meet at their respective offices on Friday to sign off on the merger. From July 1, the two entities will become one, under the bank's brand. HDFC shares would be delisted from the exchanges by July 13 and a few days after that the merged entity would be available under the HDFC Bank scrip.
"The idea is to minimise the time where the HDFC shares are not trading on the exchanges," Mistry said.
In a separate exchange notice on Tuesday, HDFC said while the lenders were hoping to meet these timelines, the dates were tentative.
Watch the full interview here:
