Presented by Dheeraj Kumar Anup Madhesia

In 2008,RBI sectioned merger of CBoP with HDFC. The share swap ratio was 1:29. All branches of CBoP turned into branches of HDFC Bank.

Nationwide network of 2000 branches.

Synergistic effect of merger:

Deposit base of about Rs. 1,22,000 crore. Net advances of about Rs.89,000 crore. Balance sheet size was more than Rs. 1,63,000 crore.
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June 94 Incorporation of Centurion Bank. Joint venture between Century Finance Corporation and Keppel Group of Singapore. 2005- Bank of Punjab merged with Centurion Bank and combined bank took as its name Centurion Bank of Punjab.

2006- Centurion Bank of Punjab acquired Kochi-based

Lord Krishna Bank.
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August 1994- Incorporation of bank. 2000- Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd.

2008 - HDFC Bank acquired Centurion Bank of

Punjab

Increase market share in India. Maintain low cost of funds. Strong asset quality. Disciplined risk management.

High earning growth with low volatility.

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Type of Horizontal Merger.

The principle objectives:

To achieve Economies of Scale. Widening the Products line.

To get more dominance in market.

This merger was also important to face the competition posed by foreign banks looking to enter on account of RBIs liberal policies and the domestic competition posed by ICICI bank.

CBoP had traditionally been strong in high yielding SMEs and retail segments, while HDFC Bank had an enviable retail deposit franchise.

Both the banks had a strong foothold in vehicle financing, which formed the basis for natural synergy.

Increase in scale of operations. Widening the geographical reach.(northern & southern states) Management Bandwidth. Potential of Business synergy and cultural fit. CBoPs SME focus complement to the HDFCs corporate focus. The combined entity would improve productivity levels of CBoP branches by leveraging HDFC Bank's brand name.

CBoP was valued at $ 2.63 billion (Rs. 9510 crores)

Swap ratio was 1:29.

26,200,220 warrants convertible into an equivalent number of equity shares to HDFC Ltd. on preferential basis at a rate of Rs. 1530.13 each.

Principal shareholders of CBoP- Bank Muscat, Sabre Capital and Kephinance Investment (Mauritius) decided to move away from this partnership.

No single lay off of employees.

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Technological Issues- Finacle Vs Finware HR Issues- Mapping of Employees. Operational Issues- Account opening, Cheque ook issue,

Net Banking, Recurring deposits.

Infrastructural Issues- Multiplicity of branches & ATMs Risk Issues- NPA, cost of funds, CASA Ongoing agitation by unions of public sector banks against consolidation of SBI.
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Increase metro presence and footprint.

7th largest bank with asset size of Rs. 1097 billion.

High level of write-offs due to bad quality of CBoP in Personal loan & 2 wheelers loan.

Net interest margins & CASA ratio were impacted adversaly. Recorded growth figures as follows:

Net Profit increased by 44.6% to Rs. 4.6 billion. Net Interest Income increased by 74.9% to Rs. 17.2 billion. Advances grew by 79.8% and deposits by 60.4%.
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India is a growing economy and demand for credit is high though it could be cyclical. So, it is booming sector in India.

Indian banking sector has 6th rank in all over the world.
Despite the economic crunch worldwide Indian banking

sector had managed to show positive growth.

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The strong economic growth in the past, low defaulter ratio, absence of complex financial products, regular intervention by central bank, proactive adjustment of monetary policy and so called close banking culture has favored the banking industry in India.

The dilution of equity from 51% to 33% has opened up opportunities for takeovers.
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