IDFC First bank signage is seen outside a branch in Mumbai, India, July 4, 2023. IDFC First Bank merged with IDFC Limited. According to Indian media reports, 155 IDFC First Bank shares will be exchanged for 100 IDFC shares.
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Indian IDFC First Bank V. Vaidyanathan, managing director and chief executive officer, said that strong growth in post-merger credit is expected in the near term.
Last week, IDFC First Bank Indicates that the board of directors has approved its merger with IDFC LimitedThis is the latest in a wave of consolidation in India’s financial sector.
Just a few days ago, India’s largest private lender entered into a mega-merger worth $40 billion HDFC Bank and Housing Development Finance Corporationthe largest mortgage lender in the country.
Vaidyanathan said India as a country is on a “huge development trajectory”, which presents huge growth potential for the combined entity in the short term.
“We are insiders of this country, we can see firsthand what is going on in this country every day,” he told CNBC’s “Signposts of Asia” on Tuesday.
“For the credit market in India, I would say that 15% credit growth is a fair expectation in the near future. And for us banks, 25% credit growth would be a fair expectation, asset quality Stablize.”
Last week, IDFC First Bank said the proposed merger would increase the bank’s stand-alone book value by 4.9% from its financials as of March 31. The bank also said it aims to grow its balance sheet by 20% to 25% annually in the near future. to mid-term.
“The merger simplifies its corporate structure by combining IDFC FHCL, IDFC Limited and IDFC FIRST Bank into one entity and will help simplify the regulatory compliance of the said entities,” the release added.
Vaidyanathan noted that the bank has key “strategic objectives” and since “the Indian market is so large and broad and we are still a very small player, we think that by taking a growing at a good rate over time” this. “
Still, the deal still needs approval from key Indian regulators, including the Reserve Bank of India, Securities and Exchange Board of India and the Indian Stock Exchange.
analyst have noticed The recent merger won’t dampen IDFC First Bank’s prospects for inclusion in MSCI’s standard index in August.
Inclusion in the index “would be a big deal,” Vaidyanathan said. “We have no doubts, now or in the future. Frankly, we are very confident and it is an honor for us to be part of the MSCI indices,” the CEO added.
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