{"id":34272,"date":"2022-04-06T20:02:04","date_gmt":"2022-04-06T14:32:04","guid":{"rendered":"https:\/\/tradebrains.in\/features\/biz-hdfc-profit\/"},"modified":"2022-04-06T20:02:04","modified_gmt":"2022-04-06T14:32:04","slug":"biz-hdfc-profit","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/features\/biz-hdfc-profit\/","title":{"rendered":"Proposed merger of HDFC Bank, HDFC to moderately hurt bank&#8217;s profitability: Moody&#8217;s"},"content":{"rendered":"<div class=\"trade-content_2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-2363761416\"><p><a href=\"https:\/\/tradebrains.in\/get\/telegram\/\"><img decoding=\"async\" class=\"alignnone wp-image-101992\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/01\/telegram-channel-300x119.png\" alt=\"\" width=\"148\" height=\"59\" \/><\/a> <a href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN3Epgswxc--Aw?hl=en-IN&amp;gl=IN&amp;ceid=IN%3Aen\"><img decoding=\"async\" class=\"alignnone wp-image-123430\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png\" alt=\"follow-on-google-news\" width=\"222\" height=\"61\" srcset=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png 300w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-150x41.png 150w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news.png 468w\" sizes=\"(max-width: 222px) 100vw, 222px\" \/><\/a><\/p>\n<\/div><p>New Delhi, Apr 6 (PTI) TThe proposed merger of HDFC Bank and HDFC Ltd will moderately hurt the lender&#8217;s profitability in the next 2-3 years, driven by higher funding costs to meet the regulatory liquidity norms, global rating agency Moody&#8217;s Investors Service said on Wednesday.<\/p><div class=\"trade-content_7\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-2844907843\"><!-- Composite Start --> \r\n <div id=\"M923760ScriptRootC1549812\"> \r\n <\/div> \r\n <script src=\"https:\/\/jsc.mgid.com\/t\/r\/tradebrains.in.1549812.js\" async> \r\n <\/script> \r\n <!-- Composite End --><\/div>\n<p>The rating agency, however, affirmed all the ratings of HDFC Bank, including the Baa3 long-term local and foreign current deposit ratings and Ba3(hyb) Additional Tier 1 securities rating.<\/p>\n<p>The rating affirmation with a stable outlook takes account of Moody&#8217;s expectation that the financial fundamentals of HDFC Bank will remain stable and robust after considering the financial impact of the proposed acquisition of HDFC by the bank, the agency said in a statement.<\/p>\n<p>The two entities&#8217; solid commercial and retail banking franchises reflected in their status as the largest private-sector bank and largest non-bank finance company in India by assets will support their funding and liquidity, it said.<\/p><div class=\"trade-content_5\" id=\"trade-256786734\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_2_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"7925020301\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div>\n<p>On April 4, 2022, HDFC Bank and HDFC announced that they had entered into a definitive agreement whereby the business of HDFC Limited will be merged into HDFC Bank in an all-stock transaction.<\/p>\n<p>The boards of both entities have approved the merger and expect the transaction to close by the end-2023, upon completion of closing conditions, including regulatory and shareholder approvals, it said.<\/p>\n<p>The proposed transaction will significantly enhance HDFC Bank&#8217;s product portfolio with a higher percentage of secured and long duration mortgage loans, the agency said, adding the merger will also improve the bank&#8217;s ability to cross-sell retail banking products to the customers of HDFC Limited.<\/p>\n<p>The increased scale and comprehensive product offering will help the combined group&#8217;s drive revenue opportunities and support operating and underwriting efficiencies, it said.<\/p>\n<p>&#8220;The transaction will moderately hurt HDFC Bank&#8217;s profitability in the next 2-3 years driven by higher funding costs to meet the regulatory liquidity norms, including cash reserve ratio, statutory liquidity ratio as well as costs associated with compliance with the priority sector lending norms. Further, the share of market funding will increase in the near term,&#8221; it said.<\/p>\n<p>Nevertheless, Moody&#8217;s expects the bank&#8217;s strong retail franchise and access to low-cost depositors will help mitigate the impact. It also expects the combined entity&#8217;s asset quality and capitalisation to remain broadly stable. PTI DP  BAL<\/p><div class=\"trade-content-10\" id=\"trade-62415757\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_3_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"2969612066\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div>\n<div class=\"trade-after-content\" id=\"trade-3721871122\"><div id=\"taboola-below-article-thumbnails\"><\/div>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({\r\n    mode: 'alternating-thumbnails-a',\r\n    container: 'taboola-below-article-thumbnails',\r\n    placement: 'Below Article Thumbnails',\r\n    target_type: 'mix'\r\n  });\r\n<\/script>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({flush: true});\r\n<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>New Delhi, Apr 6 (PTI) TThe proposed merger of HDFC Bank and HDFC Ltd will moderately hurt the lender&#8217;s profitability in the next 2-3 years, driven by higher funding costs to meet the regulatory liquidity norms, global rating agency Moody&#8217;s Investors Service said on Wednesday. The rating agency, however, affirmed all the ratings of HDFC [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1696,31],"tags":[],"class_list":["post-34272","post","type-post","status-publish","format-standard","hentry","category-corporate-action","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.5 (Yoast SEO v25.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Proposed merger of HDFC Bank, HDFC to moderately hurt bank&#039;s profitability: Moody&#039;s - Trade Brains Features<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tradebrains.in\/features\/biz-hdfc-profit\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Proposed merger of HDFC Bank, HDFC to moderately hurt bank&#039;s profitability: Moody&#039;s\" \/>\n<meta property=\"og:description\" content=\"New Delhi, Apr 6 (PTI) TThe proposed merger of HDFC Bank and HDFC Ltd will moderately hurt the lender&#8217;s profitability in the next 2-3 years, driven by higher funding costs to meet the regulatory liquidity norms, global rating agency Moody&#8217;s Investors Service said on Wednesday. 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