HDFC Bank
Content
Business Superbrands- 2nd edition(Main)
8/27/08
3:37 AM
Page 66
Market
The banking sector closely reflects the impulses
from the real economy. In almost every sphere
of operation, India’s scheduled commercial
banks (SCBs) have exhibited remarkable health
in the last decade. Dynamic macroeconomics
has strengthened the financial performance of
SCBs; it’s a trend that is expected to be
maintained in the coming years. India’s retail
banking assets are expected to grow at the rate
of 18% per annum till at least 2009/10.
Economic predictions based on industrial and
agricultural parameters are in sync with past
performance and augur well for financial
institutions. In many ways 2007 has been
remarkable.
In the services sector, retail lending rose by
74% on a year-on-year (YoY) basis. Growth in
housing loans was up 115.5%. Loans to
commercial real estate rose by 101.3%. The YoY
growth in credit to industry was 26%. There
were substantial increases in credit flow to
industries like infrastructure (34.7%), metals
(37.6%), vehicles (37.9%), gems and jewellery
(43.5%) and construction (52.6%). During the
same period the growth in bank credit to
agriculture was 35%. Barring international
phenomenon which could temporarily suspend
this run, the banking sector in India is expected
to continue to ride on the strength of strong
economic fundamentals (Source: Reserve Bank
of India Report).
It is within this market climate that HDFC
Bank – India’s largest private commercial bank
with 2.2% market share in terms of total
banking sector assets – continues to play a
pivotal role. HDFC Bank is a domestic AAA
rated institution with strong backing from its
parent – Housing Development Finance
Corporation (HDFC) – a housing finance
institution that the International Finance
Corporation (IFC) helped establish in 1978. The
bank is listed on the Bombay
and National Stock
Exchanges, as well as on the
NYSE. It has built up a
formidable reputation and
franchise in a relatively short
span of time and has
outperformed most other
banks, private sector or
government-owned, by a
significant margin.
Its total balance sheet size
increased by 46% from
Rs. 91,236 crore (US$ 22.81
billion) as at 31st March
2007 to Rs. 133,177 crore
(US$ 33.29 billion) as at 31st
March 2008. Total deposits
were Rs. 100,769 crore
(US$ 25.19 billion) an
increase of 47.5% from the
previous year (Source:
internal data).
With savings account
deposits of Rs. 26,154 crore
(US$ 6.54 billion) and
current account deposits at
66
SUPERBRANDS
Rs. 28,760 crore (US$ 7.19 billion) the CASA
(Current Account-Savings Account) mix was
healthy at 54.5% of total deposits. The bank’s
customer assets (including net advances,
corporate debentures, investments in securitised
paper etc) had also increased to Rs. 70,403
crore (US$ 17.60 billion) by 31st March 2008
(Source: internal data).
Achievements
In the banking sector, HDFC Bank has one of
the lowest cost of funds in India and a
disciplined growth strategy. It maintains a healthy
asset quality and seeks to consistently match
revenues with growth and profits. The bank’s
business momentum remained brisk and
competitive in both its retail and wholesale
customer franchises.
As at 31st March 2008, the Bank’s
distribution network was well spread with 761
branches and 1977 ATMs in 327 cities as
against 684 branches and 1605 ATMs in 320
cities as at 31st March 2007. Portfolio quality as
of March 2008 remained worthy of emulation
with net non-performing assets at 0.4% – well
below the industry average.
In July 2007, the bank made a public offering
of 6,594,504 American Depositary Shares
(ADS). The net proceeds from this issue was
Rs. 2393.9 crore (US$ 598.50 million). The
Bank’s Capital Adequacy Ratio (CAR) was
13.6% against the regulatory minimum of 9%.
Tier I CAR was at 10.3% as against 8.6% as at
31st March 2007 (Source: internal data).
Outside recognition has been a logical
corollary to the bank’s solid standing and
performance. To mention only a few accolades,
Business Today named it the Best Bank in India,
as did Outlook Money and NDTV Profit. Dun
& Bradstreet and American Express conferred
on it the Corporate Best Bank Award.
While the bank itself received peer
recognition, the bank’s management, too, came
in for acclaim. HDFC Bank’s Managing Director,
Aditya Puri, won the Leadership Achievement
Award from Asian Banker.
History
HDFC was amongst the first to receive approval
from the Reserve Bank of India (RBI) to set up
a bank in the private sector as part of RBI's
liberalisation of the Indian banking industry in
1994. The bank was incorporated in August
1994 as HDFC Bank Limited, with its registered
office in Mumbai. In January 1995 the new entity
commenced operations as a scheduled
commercial bank.
Almost exactly five
years later, in February
2000, it consolidated its
position in the banking
industry when it merged
with TimesBank Limited,
another new private
sector bank.
The merged entity, now
harbouring greater depth
and increased reach, had
become a dynamic new
force. It afforded the bank
further opportunities to
cross sell its products and
services and leverage
alternate delivery channels.
HDFC Bank has, today,
attained critical mass and
is recognised amongst the
most professionally run
banks in the country.
Product
The Group operates
through three segments:
Retail Banking, Wholesale
Business Superbrands- 2nd edition(Main)
8/27/08
3:37 AM
Banking and Treasury Services. The retail
segment serves customers through a branch
network and other delivery channels. It raises
deposits from customers and advances loans
and provides advisory services. The wholesale
operation provides loans and transaction
services to corporate and institutional
customers while the treasury service
undertakes trading operations on proprietary
accounts, foreign exchange operations and
derivatives trading.
HDFC Bank also provides clearing and cash
settlement services to seven major stock
exchanges in India, including the National Stock
Exchange and the Bombay Stock Exchange. In
addition, it interacts with Indian mutual funds
and more than 20 foreign and 900
co-operative banks.
Direct banking channel transactions are
available through its automated teller machines
(ATMs), PhoneBanking, NetBanking and
MobileBanking. Other customer-friendly
initiatives include BillPay, InstaAlert, NetSafe,
National Electronic Fund Transfer, Visa Money
Transfer, Online Payment of Taxes and Excise
Duties and Advisory and Merchant Services.
Recent Developments
With development on several fronts 2007/08
has been an industrious year for HDFC Bank.
The launch of the domestic-use NRO Debit
Card will allow NRO customers to make
purchases at merchant locations in India and will
also enable withdrawal of cash in local currency
at ATMs. In addition, the
bank is facilitating
educational loans for
students pursuing higher
studies in India and abroad.
The Business Debit Card is
another innovation
extending the partnership
between HDFC Bank and
corporate India.
‘ngpay’ is a full service
mobile commerce suite
offering on-the-moveshopping to a consumer
through a mobile phone.
The facility offers movierail- and air- ticketing as
well as gifting in association
with channel partners.
The bank’s ‘mPay’
scheme converts a mobile
phone into a credit card.
Launched in association
with Reliance
Communications, this is
India's first virtual credit
card linked to a cell phone.
Customers can make
payment in a simple,
secure and real-time
environment without
having to disclose the
credit card details to
the merchant.
‘mChek’ is the newest in
a series of mobile-based
initiatives launched by
HDFC Bank. This facility
allows person-to-person
transfer of funds using the
Virtual Debit Card on
mobile phones and enables
remote merchant
payments by the Virtual
Debit/Credit cardholder
without visiting the
merchant establishment.
HDFC Bank has also
made possible several
paperless initiatives. These
Page 67
include
Netbanking
registrations
through the
ATM,
PhoneBanking
or through the
mobile. The
bank also
launched interbank funds
transfer using
the National
Electronic Fund
Transfer (NEFT)
or the Real
Time Gross
Settlement
(RTGS) facilities.
Customers can
also regenerate
their
NetBanking password using the HDFC Bank
Debit Card.
Another development at HDFC Bank has
been the launch of Unnati Savings Account. The
facility, designed especially for rural markets
empowers customers to deposit and withdraw
cash across the counter at remote locations
where HDFC Bank does not have a branch or
an ATM.
HDFC Bank’s constant endeavour is to create
products to cater to the financial needs of each
member in the household. The launch of HDFC
Bank Senior Citizens
Account is another step in
this direction. This powerpacked savings account
offers senior citizens
Accidental Hospitalisation
Cover, amongst other
exclusive benefits.
The launch of the
HDFC Bank SavingsMax
Account was designed to
offer customers a
simplified and superlative
banking experience. This
account offers features like
free unlimited transactions
at any bank’s ATM, free
Gold Debit Card, benefit
of automatic conversion
of the customer's
idle savings into high
earning fixed deposits and
other consumer-friendly
features.
But the most recent and
significant development has
been the proposed merger
of Centurion Bank of
Punjab with HDFC Bank. A
landmark merger in the
banking industry when
completed, the merger of
Centurion Bank of Punjab
announced in early 2008,
will create a nationwide
network of 1148 branches
(the largest amongst
private sector banks), a
strong deposit base of
about Rs. 120,000 crore
(US$ 30 billion) and net
advances of Rs. 85,000
crore (US$ 21.25 billion).
The balance sheet size
of the combined
entity would be over
Rs. 150,000 crore
(US$ 37.50 billion)
(Data accurate when the
merger was announced)
Promotion
Over the years communication in the banking
industry has created a series of me-too brands.
HDFC Bank has broken free of this blur by
working outward from its stated position of ‘We
understand your world.’ Everything that the
bank does evidences this fact. Understanding the
consumer is one of them.
HDFC Bank expends considerable time
in micro-segmenting data. This helps it to
create products and customise offers to
meet the needs of these audiences. It also
promotes the cross-selling process even
as the sharper focus helps improve the
quality of service, build brand loyalty,
increase the bank’s share-of-wallet, reduce
acquisition cost and enhance customer
satisfaction levels.
While mass media campaigns play a role in
creating awareness about HDFC Bank, significant
contribution to this endeavour is also made by
below-the-line promotions and direct marketing
campaigns.
Brand Values
In the banking industry HDFC Bank has
positioned itself as an institution that
can be trusted by all constituents. It is
seen as a transparent, ethical organisation
offering a comprehensive range of products
under one roof and as a one-stop financial
supermarket with quality service as its
calling card.
It prides itself on being assigned the highest
rating on Corporate Governance and Value
Creation by CRISIL.
www.hdfcbank.com
THINGS YOU DIDN’T KNOW ABOUT
HDFC Bank
HDFC Bank was the first private sector bank to
be licensed for operation
In February 2000 when HDFC Bank merged
with TimesBank it created history: it was the
first merger in the private sector
HDFC Bank was the quickest to cross the onemillion credit card mark
HDFC Bank was the first bank in India to
launch debit cards and offer mobile banking,
online banking and real-time NetBanking
HDFC Bank is the primary settlement bank to
the major stock exchanges in the country and
has the biggest market share in the settlement
services to commodities exchanges
SUPERBRANDS
67
8/27/08
3:37 AM
Page 66
Market
The banking sector closely reflects the impulses
from the real economy. In almost every sphere
of operation, India’s scheduled commercial
banks (SCBs) have exhibited remarkable health
in the last decade. Dynamic macroeconomics
has strengthened the financial performance of
SCBs; it’s a trend that is expected to be
maintained in the coming years. India’s retail
banking assets are expected to grow at the rate
of 18% per annum till at least 2009/10.
Economic predictions based on industrial and
agricultural parameters are in sync with past
performance and augur well for financial
institutions. In many ways 2007 has been
remarkable.
In the services sector, retail lending rose by
74% on a year-on-year (YoY) basis. Growth in
housing loans was up 115.5%. Loans to
commercial real estate rose by 101.3%. The YoY
growth in credit to industry was 26%. There
were substantial increases in credit flow to
industries like infrastructure (34.7%), metals
(37.6%), vehicles (37.9%), gems and jewellery
(43.5%) and construction (52.6%). During the
same period the growth in bank credit to
agriculture was 35%. Barring international
phenomenon which could temporarily suspend
this run, the banking sector in India is expected
to continue to ride on the strength of strong
economic fundamentals (Source: Reserve Bank
of India Report).
It is within this market climate that HDFC
Bank – India’s largest private commercial bank
with 2.2% market share in terms of total
banking sector assets – continues to play a
pivotal role. HDFC Bank is a domestic AAA
rated institution with strong backing from its
parent – Housing Development Finance
Corporation (HDFC) – a housing finance
institution that the International Finance
Corporation (IFC) helped establish in 1978. The
bank is listed on the Bombay
and National Stock
Exchanges, as well as on the
NYSE. It has built up a
formidable reputation and
franchise in a relatively short
span of time and has
outperformed most other
banks, private sector or
government-owned, by a
significant margin.
Its total balance sheet size
increased by 46% from
Rs. 91,236 crore (US$ 22.81
billion) as at 31st March
2007 to Rs. 133,177 crore
(US$ 33.29 billion) as at 31st
March 2008. Total deposits
were Rs. 100,769 crore
(US$ 25.19 billion) an
increase of 47.5% from the
previous year (Source:
internal data).
With savings account
deposits of Rs. 26,154 crore
(US$ 6.54 billion) and
current account deposits at
66
SUPERBRANDS
Rs. 28,760 crore (US$ 7.19 billion) the CASA
(Current Account-Savings Account) mix was
healthy at 54.5% of total deposits. The bank’s
customer assets (including net advances,
corporate debentures, investments in securitised
paper etc) had also increased to Rs. 70,403
crore (US$ 17.60 billion) by 31st March 2008
(Source: internal data).
Achievements
In the banking sector, HDFC Bank has one of
the lowest cost of funds in India and a
disciplined growth strategy. It maintains a healthy
asset quality and seeks to consistently match
revenues with growth and profits. The bank’s
business momentum remained brisk and
competitive in both its retail and wholesale
customer franchises.
As at 31st March 2008, the Bank’s
distribution network was well spread with 761
branches and 1977 ATMs in 327 cities as
against 684 branches and 1605 ATMs in 320
cities as at 31st March 2007. Portfolio quality as
of March 2008 remained worthy of emulation
with net non-performing assets at 0.4% – well
below the industry average.
In July 2007, the bank made a public offering
of 6,594,504 American Depositary Shares
(ADS). The net proceeds from this issue was
Rs. 2393.9 crore (US$ 598.50 million). The
Bank’s Capital Adequacy Ratio (CAR) was
13.6% against the regulatory minimum of 9%.
Tier I CAR was at 10.3% as against 8.6% as at
31st March 2007 (Source: internal data).
Outside recognition has been a logical
corollary to the bank’s solid standing and
performance. To mention only a few accolades,
Business Today named it the Best Bank in India,
as did Outlook Money and NDTV Profit. Dun
& Bradstreet and American Express conferred
on it the Corporate Best Bank Award.
While the bank itself received peer
recognition, the bank’s management, too, came
in for acclaim. HDFC Bank’s Managing Director,
Aditya Puri, won the Leadership Achievement
Award from Asian Banker.
History
HDFC was amongst the first to receive approval
from the Reserve Bank of India (RBI) to set up
a bank in the private sector as part of RBI's
liberalisation of the Indian banking industry in
1994. The bank was incorporated in August
1994 as HDFC Bank Limited, with its registered
office in Mumbai. In January 1995 the new entity
commenced operations as a scheduled
commercial bank.
Almost exactly five
years later, in February
2000, it consolidated its
position in the banking
industry when it merged
with TimesBank Limited,
another new private
sector bank.
The merged entity, now
harbouring greater depth
and increased reach, had
become a dynamic new
force. It afforded the bank
further opportunities to
cross sell its products and
services and leverage
alternate delivery channels.
HDFC Bank has, today,
attained critical mass and
is recognised amongst the
most professionally run
banks in the country.
Product
The Group operates
through three segments:
Retail Banking, Wholesale
Business Superbrands- 2nd edition(Main)
8/27/08
3:37 AM
Banking and Treasury Services. The retail
segment serves customers through a branch
network and other delivery channels. It raises
deposits from customers and advances loans
and provides advisory services. The wholesale
operation provides loans and transaction
services to corporate and institutional
customers while the treasury service
undertakes trading operations on proprietary
accounts, foreign exchange operations and
derivatives trading.
HDFC Bank also provides clearing and cash
settlement services to seven major stock
exchanges in India, including the National Stock
Exchange and the Bombay Stock Exchange. In
addition, it interacts with Indian mutual funds
and more than 20 foreign and 900
co-operative banks.
Direct banking channel transactions are
available through its automated teller machines
(ATMs), PhoneBanking, NetBanking and
MobileBanking. Other customer-friendly
initiatives include BillPay, InstaAlert, NetSafe,
National Electronic Fund Transfer, Visa Money
Transfer, Online Payment of Taxes and Excise
Duties and Advisory and Merchant Services.
Recent Developments
With development on several fronts 2007/08
has been an industrious year for HDFC Bank.
The launch of the domestic-use NRO Debit
Card will allow NRO customers to make
purchases at merchant locations in India and will
also enable withdrawal of cash in local currency
at ATMs. In addition, the
bank is facilitating
educational loans for
students pursuing higher
studies in India and abroad.
The Business Debit Card is
another innovation
extending the partnership
between HDFC Bank and
corporate India.
‘ngpay’ is a full service
mobile commerce suite
offering on-the-moveshopping to a consumer
through a mobile phone.
The facility offers movierail- and air- ticketing as
well as gifting in association
with channel partners.
The bank’s ‘mPay’
scheme converts a mobile
phone into a credit card.
Launched in association
with Reliance
Communications, this is
India's first virtual credit
card linked to a cell phone.
Customers can make
payment in a simple,
secure and real-time
environment without
having to disclose the
credit card details to
the merchant.
‘mChek’ is the newest in
a series of mobile-based
initiatives launched by
HDFC Bank. This facility
allows person-to-person
transfer of funds using the
Virtual Debit Card on
mobile phones and enables
remote merchant
payments by the Virtual
Debit/Credit cardholder
without visiting the
merchant establishment.
HDFC Bank has also
made possible several
paperless initiatives. These
Page 67
include
Netbanking
registrations
through the
ATM,
PhoneBanking
or through the
mobile. The
bank also
launched interbank funds
transfer using
the National
Electronic Fund
Transfer (NEFT)
or the Real
Time Gross
Settlement
(RTGS) facilities.
Customers can
also regenerate
their
NetBanking password using the HDFC Bank
Debit Card.
Another development at HDFC Bank has
been the launch of Unnati Savings Account. The
facility, designed especially for rural markets
empowers customers to deposit and withdraw
cash across the counter at remote locations
where HDFC Bank does not have a branch or
an ATM.
HDFC Bank’s constant endeavour is to create
products to cater to the financial needs of each
member in the household. The launch of HDFC
Bank Senior Citizens
Account is another step in
this direction. This powerpacked savings account
offers senior citizens
Accidental Hospitalisation
Cover, amongst other
exclusive benefits.
The launch of the
HDFC Bank SavingsMax
Account was designed to
offer customers a
simplified and superlative
banking experience. This
account offers features like
free unlimited transactions
at any bank’s ATM, free
Gold Debit Card, benefit
of automatic conversion
of the customer's
idle savings into high
earning fixed deposits and
other consumer-friendly
features.
But the most recent and
significant development has
been the proposed merger
of Centurion Bank of
Punjab with HDFC Bank. A
landmark merger in the
banking industry when
completed, the merger of
Centurion Bank of Punjab
announced in early 2008,
will create a nationwide
network of 1148 branches
(the largest amongst
private sector banks), a
strong deposit base of
about Rs. 120,000 crore
(US$ 30 billion) and net
advances of Rs. 85,000
crore (US$ 21.25 billion).
The balance sheet size
of the combined
entity would be over
Rs. 150,000 crore
(US$ 37.50 billion)
(Data accurate when the
merger was announced)
Promotion
Over the years communication in the banking
industry has created a series of me-too brands.
HDFC Bank has broken free of this blur by
working outward from its stated position of ‘We
understand your world.’ Everything that the
bank does evidences this fact. Understanding the
consumer is one of them.
HDFC Bank expends considerable time
in micro-segmenting data. This helps it to
create products and customise offers to
meet the needs of these audiences. It also
promotes the cross-selling process even
as the sharper focus helps improve the
quality of service, build brand loyalty,
increase the bank’s share-of-wallet, reduce
acquisition cost and enhance customer
satisfaction levels.
While mass media campaigns play a role in
creating awareness about HDFC Bank, significant
contribution to this endeavour is also made by
below-the-line promotions and direct marketing
campaigns.
Brand Values
In the banking industry HDFC Bank has
positioned itself as an institution that
can be trusted by all constituents. It is
seen as a transparent, ethical organisation
offering a comprehensive range of products
under one roof and as a one-stop financial
supermarket with quality service as its
calling card.
It prides itself on being assigned the highest
rating on Corporate Governance and Value
Creation by CRISIL.
www.hdfcbank.com
THINGS YOU DIDN’T KNOW ABOUT
HDFC Bank
HDFC Bank was the first private sector bank to
be licensed for operation
In February 2000 when HDFC Bank merged
with TimesBank it created history: it was the
first merger in the private sector
HDFC Bank was the quickest to cross the onemillion credit card mark
HDFC Bank was the first bank in India to
launch debit cards and offer mobile banking,
online banking and real-time NetBanking
HDFC Bank is the primary settlement bank to
the major stock exchanges in the country and
has the biggest market share in the settlement
services to commodities exchanges
SUPERBRANDS
67
