Fresh from its successful acquisition of TimesBank, the management of HDFC Bank may acquire more private banks, in a bid to increase market share rapidly. It is also planning an e-commerce foray.
HDFC Bank is promoted by HDFC, India's largest housing finance company. The bank provides a range of banking services including working capital finance, trade services, corporate finance and merchant banking. Its treasury division offers three main products - forex and derivatives, money markets, and debt trading. It also provides custodial services to FII's, mutual funds and other investors. It has emerged among the top five players in India in money and forex markets.
Since its merger with TimesBank, banks stock prices have soared in the anticipation of another round of consolidation among private banks. HDFC Bank's aggressive plans are likely to fuel speculation among investors about its next takeover target.
HDFC Bank is looking at the acquisition route to add to its strong client franchise to give a boost to its retail products like consumer loans and credit/debit cards. All this is aimed at asset growth. But it will be quite some time before it acquires another bank, as it is very choosy and will look at banks, which match its dynamic style of doing business. Until then let us speculate on its next likely target.
With the growth in Internet usage in India, the prospects of consumer to business and business to business e-commerce solutions look very bright. Against such a backdrop, HDFC Bank's decision to focus on e-commerce makes sense. Its can tap its large client database to make its foray a financial success.
HDFC Bank declared the results for the third quarter of financial year ending March 2017 (3QFY17). The bank has reported 18% YoY and 15% YoY growth in net interest income and net profits respectively in 3QFY17.
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