HDFC-HDFC Bank merger: Here's What the Board Said About Retention of Employees

Mortgage lender Housing Development Finance Corporation (HDFC) on April 4 said its board has approved the merger of its wholly-owned subsidiaries HDFC Investments Limited and HDFC Holdings Limited with HDFC Bank Limited.HDFC will acquire 41 per cent stake in HDFC Bank through the transformational merger, according to an HDFC Bank filing with the stock exchanges. The merger will not impact the employees of HDFC Ltd, said Deepak Parekh, Chairman, HDFC Ltd.”The HDFC-HDFC Bank merger will not impact employees of HDFC Ltd,” news agency PTI quoted Deepak Parekh.

Deepak Parekh, Chairman HDFC Ltd., said, “This is a merger of equals. We believe that the housing finance business is poised to grow in leaps and bounds due to the implementation of RERA, infrastructure status to the housing sector, government initiatives like affordable housing for all, amongst others. Over the last few years, various regulations for banks and NBFCs have been harmonised, thereby enabling the potential merger. “

“Further, the resulting larger balance sheet would allow underwriting of large ticket infrastructure loans, accelerate the pace of credit growth in the economy, boost affordable housing and increase the quantum of credit to the priority sector, including credit to the agriculture sector,” he said.

This process will take 12-18 months because of numerous approval, said Deepakh Parekh in the press conference. The RBI doesn’t allow over 75 year old officials to be on the Board, I have crossed that age, added Parekh. Keki will have a year or year-and-a-half so he has time and he can be a director on Board, whatever Shashi wants him to do. Keki Mistry does not wish to be a full time executive but can be on the Board, said Parekh.

HDFC has total assets of Rs 6,23,420.03 crore, turnover of Rs 35,681.74 and net worth of Rs 1,15,400.48 crore as on December 31, 2021.

HDFC Bank, on the other hand, has total assets of Rs 19,38,285.95 crore, turnover (includes other income) of Rs 1,16,177.23 crore for the nine months ended December 31, 2021, and a net worth of Rs 2,23,394.00 crore, as on December 31, 2021.

HDFC Bank said the proposed transaction will enable HDFC Bank to build its housing loan portfolio and enhance its existing customer base. The private lender said the proposed transaction is based on leveraging the significant complementarities that exist amongst the Parties.