HDFC bank will make its way into the world’s top 10 most valuable banks after its merger with its parent HDFC at current valuations. Also, HDFC bank will become the first bank to be in the world’s top 10 banks in India.
HDFC Bank has a market value of around $108 billion. The bank has recently surpassed Citigroup which has a valuation of $100.5 billion and is at number 17. The HDFC Bank has more value than UBS and DBS group combined value at around $58 billion. The country’s largest bank and lender SBI is at number 32 with a valuation of $57 billion and BNP Paribas has a valuation of $55 billion.
The combined valuation of HDFC and HDFC Bank is expected to be $160 billion.
The benefit of climbing up in the ranks in size and valuation suggests that the bank’s measure of being systematically important also rises. Such banks which are labeled as systemically important are required to hold more capital than which are not stated as systemically important. In India, HDFC is already a systematically important bank but an increase in its size will add to its global significance.
According to the Financial Stability Board (an organization that suggests recommendations on financial regulations), JP Morgan is the most systemically important bank for 2021 followed by BNP Paribas, Citigroup, and HSBC respectively. This board publishes a list of the 30 most systemically important banks across the world. There was no Indian bank on the 2021 list. On the other hand, China has four banks on the list. Currently, China has 5 banks in the world’s top 10 banks which is the most for any country.
