HDFC Bank, Centurion boards to consider merger

HDFC Bank and Centurion Bank of Punjab (Centurion) on Friday confirmed that they are considering a merger proposal. The boards of directors of both the banks are meeting separately on Saturday to consider “in principle” a possible merger. The boards will appoint independent valuers for deciding on the share swap ratio. After the merger, the combined entity would have a formidable network of over 1,100 branches with a pan-India presence. This would overtake ICICI Bank in terms of branch network (955). However, in terms of balance sheet size, ICICI Bank maintains its lead by a large margin. As on December 31, 2007, the balance sheet size of Centurion Bank of Punjab stands at Rs 25,403 crore and of HDFC Bank at Rs 1.31 lakh crore. ICICI Bank’s balance sheet stands at a much larger figure of Rs 3.76 lakh crore. Centurion has traditionally adopted the inorganic route to expansion. It took over BankMuscat’s Indian operations in 2003 followed by Bank of Punjab in 2005 and the Lord Krishna Bank in 2006. Centurion has a large presence in the North and a considerable exposure to the agriculture sector, thanks to its merger with Bank of Punjab in 2005. Centurion has 394 branches and 452 ATMs with employee strength of around 7,500. HDFC Bank has a branch network of 754 and is understood to have over 200 more licenses in hand. HDFC Bank has 1,906 ATMs in 327 locations