HDFC Bank's weightage to increase in FTSE Emerging All Cap Index, lender likely to see inflows of up to Rs 4,150 crore

HDFC Bank's weightage increase: Shares of HDFC Bank were flat on Tuesday (August 8). The weightage of the lender, as per a Zee Business report, is expected to increase in the FTSE Emerging All Cap Index from 0.81 per cent to 1.51 per cent. The weightage will increase in three phases: September, December, and March index reviews. The estimated inflows post-weightage increase is between $450 and $500 million (Rs 3,700 crore–Rs 4,150 crore).

The September review will be announced on August 18, and the adjustments will be made on September 15.

The merger of HDFC Ltd and HDFC Bank was completed on July 1, 2023. It was one of the biggest mergers in Indian corporate history. The merger has created a financial services behemoth with a combined balance sheet of over $600 billion. The new entity will have a pan-India presence, with over 6,000 branches and 55,000 ATMs. It will also have a strong presence in the mortgage, insurance, and asset management businesses.

As per analysts, post-merger, HDFC Bank has become the second-largest bank after the State Bank of India in terms of credit. For the merged entity, mortgages will comprise more than 30 per cent, loans from commercial and rural banking will be around 25 per cent and more than 20 per cent from retail, with corporate loan books and others contributing 20 per cent and 5 per cent. READ MORE

HDFC BANK Q1 result

The private sector lender reported a 30 per cent year-on-year jump in standalone profit after tax (PAT) to Rs 11,951.8 crore for the quarter ended June 30, 2023, beating analysts' estimates. This is HDFC Bank's first earnings report since the completion of its mega-merger with Housing Development Finance Corporation (HDFC). The lender's net interest income (NII) — or the difference between interest earned and interest paid — grew 21.1 per cent to Rs 23,599 crore, according to a regulatory filing. Its net interest margin (NIM) — a key measure of profitability — remained flat sequentially at 4.1 per cent. CLICK HERE TO READ FULL REPORT