Indian banks HDFC and Centurion set to merge

by Richard Kilner

Story link: Indian banks HDFC and Centurion set to merge

India is poised to see one of the largest bank mergers in its history.

The Centurion Bank of Punjab is set to be taken over by HDFC Bank in an all stock deal.

The boards of the two banks will meet on Saturday to consider the merger.

Two days ago representatives from the two firms met in a prolonged meeting which saw them thrashing out the finer points of detail.

The resulting bank will not be a match in asset terms for ICICI , India’s largest private bank, but it will be larger than the Axis Bank.

This is not the first time that HDFC and Centurion have discussed a potential merger.

Last time the idea did not get off the ground because of valuation issues, and the difference this time seems to be that the senior officials at the banks now appear to be thinking along a similar wavelength.

Following the merger the new bank will be gifted a stronger presence in regions such as Punjab and Kerala, and have the potential for greater lending in the capital market.