HDFC Bank will only consider a public listing of its brokerage subsidiaries and non-bank financial companies after the completion of its merger with parent company HDFC Ltd, CEO and Managing Director Sashidhar Jagdishan said on July 16. The $40 billion merger between HDFC Bank and HDFC, billed as the biggest transaction in the company’s history, was announced in April. It is expected to take up to 18 months to complete.

In response to questions from shareholders at the 28th annual general meeting of the largest private sector lender, Jagdishan said the merger process will determine whether or not HDFC Securities and HDB Financial Services make their initial public offerings (IPOs).

“The IPO plans (of both HDFC Securities and HDB Financial Services) are something we will consider after we absorb (the merger)…we have instructions from the regulator, after we absorb as the merger progresses And then we’ll think about it,” Jagdishan said.

He previously said that regarding HDB Financial Services, the bank is still awaiting instructions from the regulator to determine a “glide path” for the future of the business. HDB Financial Services recently announced a significant increase in net after tax to 441.3 crores for the June quarter.

Given the complementarity of commercial offers with brokerage whose clients are the same as those of the bank, the bank wishes to retain a majority stake in HDFC Securities, according to the CEO. The choice of keeping the stake at the existing 95% or reducing it will be made in due course, according to Jagdishan.

The bank has postponed plans to increase its investment in HDFC Ergo General Insurance despite RBI approval, pending merger with HDFC, after which the insurer will become a subsidiary of the bank itself, according to Jagdishan.

Jagdishan explained that since mortgage assets are generally longer-term, the bank’s asset-liability committee will have to make the appropriate decisions. Once the merger is complete, the bank will also need to consider raising the maturity profile of its liabilities, which are currently below three years.

HDFC Bank CEO said the combined entity’s overall home loan mix will be 35% and hinted he would offer more of the same product saying he doesn’t see this as a concentration issue . He pointed out that while under-penetration provides an opportunity on the one hand, the bank’s other lending products would also expand on the other.

Post-merger, the bank wants to “traffic” with HDFC depository agents, but he said it would wait for regulatory clarifications before doing so.

The bank, which has recently come under fire from the regulator over customer interruptions, plans to develop Payzapp, a payment app that will be superior to its existing offering and include features such as fast cashback crediting, in the near future. coming. said Jagdishan.

He said that starting in July or August he plans to launch a new digital offering every three to four weeks, which will also include a new mobile app for businesses and small businesses, and added that he already has soft-launched a customer experience hub. without much fanfare.

Meanwhile, the bank’s non-executive chairman, Atanu Chakraborty, said it plans to double its branch network to more than 12,000 over the next 3-5 years, and branch sizes may decrease. with time.

Typically, it takes two years for a branch in a metropolitan city to break even, while the same for other pockets takes about three years, he said.

(With PTI inputs)

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