EXCLUSIVE | HDFC CEO Keki Mistry on the reason behind HDFC-HDFC Bank merger, and what lies ahead

HDFC-HDFC Bank merger: The merger between HDFC and HDFC Bank, which was officially completed on July 1, is the biggest transaction deal in India's corporate history. The deal has paved the way for the merged HDFC Bank to become the world’s fourth-largest bank in terms of market capitalisation, behind JPMorgan Chase & Co., Industrial and Commercial Bank of China Ltd. and Bank of America Corp., according to data compiled by Bloomberg. The merged entity is valued at about $172 billion.

The merger deal was first announced on April 4, 2022, and the daunting task of leading the merger process to completion fell on Deepak Parekh, the chairman of HDFC Ltd, who recently announced his retirement, and Keki Mistry, the vice chairman and chief executive officer (CEO) of the mortgage lender. 

To have first-hand information on why there was a need for merging the two financial giants, what’s the road ahead, and what will be the merged HDFC Bank’s strategy now, Zee Business caught up with HDFC CEO Keki Mistry.

Mistry shared that in the past five-six years, there have been changes in the industry (NBFCs) as well as regulations governing it, which led to the merger of the two giants. Last year, when the merger was announced, Deepak Parekh also said that the last three years have seen harmonisation in the regulations of banks and non-banks, which reduces the "regulatory arbitrage" of running a separate home finance company.

This aside, nearly 70 per cent of HDFC customers didn’t have accounts with HDFC Bank, and hence, there is a higher possibility of cross-selling post-merger, Mistry said in an exclusive conversation with ZEE Business Managing Editor Anil Singhvi on July 3.

Mistry added that the future of non-banking financial companies (NBFCs) will also be encouraging, and post-merger, other companies will have an opportunity to enter the space.

The HDFC CEO further said that going forward, HDFC Bank will enter construction financing as well. Mistry added that their aim is to be among the top 3 in all the businesses. The vice chairman of HDFC also said that India’s economy is among the world’s strongest.

Shares of HDFC will be delisted on July 13.

Deepak Parekh hangs boots

After a tenure spanning over 45 years that witnessed the creation of India's biggest financial services conglomerates, Deepak Parekh, the chairman of Housing Development Finance Corporation (HDFC), announced his retirement on June 30, 2023, on the eve of HDFC's monumental merger with HDFC Bank. 

Parekh, who joined HDFC as a deputy general manager in 1978, was instrumental in transforming HDFC into a leader in home loans and a diverse financial services conglomerate with a presence in banking, asset management, life insurance, general insurance, real estate venture funds, and education loans. READ MORE