HDFC Bank Limited is an Indian banking and financial services company headquartered in Mumbai, Maharashtra. HDFC Bank is India’s largest private bank by assets and by market capitalization ( as of April 2021). It is the third-largest company by market capitalization ($145 billion) on the Indian stock exchanges. It is also the fifteenth largest employer in India with nearly 120,000 employees.
Let us look into the Overview of HDFC Bank and then we can move on to the SWOT Analysis of HDFC Bank.
- 1 Overview of HDFC Bank
- 2 SWOT Analysis Of HDFC Bank
- 3 SWOT Analysis Of HDFC Bank Key Takeaways
- 4 HDFC Bank STP & USP
- 5 HDFC Bank Competitors
Overview of HDFC Bank
HDFC Bank was incorporated in 1994 as a subsidiary of Housing Development Finance Corporation and is headquartered in Mumbai, Maharashtra, India. Its first head office and a full-service branch at Sandoz House, Worli, were inaugurated by the then Union Finance Minister, Manmohan Singh.
As of June 30, 2019, the bank’s distribution network comprised 5,500 branches in 2,764 cities. The bank has also installed 430,000 POS terminals and issued 23,570,000 debit cards and 12 million credit cards ( FY 2017). It has 1,16,971 permanent employees (as of March 21, 2020).
HDFC Bank offers a range of products and services including wholesale banking, retail banking, treasury, auto loans, two-wheeler loans, personal loans, real estate loans, durable goods loans, lifestyle loans and credit cards. In addition, there are various digital products such as Payzapp and SmartBUY.
HDFC Bank merged with Times Bank in February 2000. This was the first merger of two private sector banks in the category of New Generation Private Sector Banks. Times Bank was founded by Bennett, Coleman and Co Ltd, commonly known as The Times Group, India’s largest media conglomerate.
In 2008, Centurion Bank of Punjab ( CBoP ) was acquired by HDFC Bank. The board of HDFC Bank approved the acquisition of CBoP for Rs 95.1 billion in one of the largest mergers in the financial sector in India.
In 2021, the bank acquired a 9.99% stake in FERBINE, a Tata Group-sponsored venture to run a pan-India umbrella company for retail payments systems, similar to the National Payments Corporation of India.
In September 2021, the bank partnered with Paytm to launch a range of credit cards backed by the global card network Visa.
Did You Know?
HDFC (parent company of HDFC BANK) has invested `1,000 crores in Yes Bank. As per the Yes Bank reconstruction plan, 75% of the company’s total investment will be locked in for three years. On March 14, Yes Bank allotted 100 million shares of the face value of Rs 2 Rs 10 each (including Rs 8 premium) to the company, representing 7.97 per cent of Yes Bank’s post-issue share capital.
SWOT Analysis Of HDFC Bank
The SWOT Analysis of HDFC Bank includes its strengths, weaknesses, opportunities, and threats. And in this reading of the SWOT Analysis of HDFC Bank, we will examine this beauty and wellness company in terms of its internal and external factors.
S Stands For Strengths ( Internal Factor )
- Largest Bank & Partnerships: HDFC Bank is the second-largest private bank in India with over 5000 branches and more than 14000 ATMs. HDFC Bank has a presence in 2825 Indian cities and has more than 800 telephone banking locations to serve its customers.The bank’s ATM is available with Plus/cirus, Visa Electron/Maestro, Visa/Master and American Express both domestically and internationally. This is also another reason why HDFC cards are the most popular card for purchases and online shopping. Unlike other private banks, HDFC Bank has a high level of customer loyalty.HDFC has a low attrition rate and is one of the best places to work in the private banking industry.
HDFC has received numerous recognitions and awards from various financial ranking institutions such as Dun and Bradstreet, Financial Express, Euromoney Awards for Innovation, Finance Asia Country Awards, etc., it has been awarded as ‘Best Bank’.
HDFC has a large number of financial advisors to guide its clients in choosing good investment options.
- Financial Position: HDFC Bank has a sound financial position with continuous profits over the last 5 years and accumulated retained earnings that can be used to fund potential investments. It has a broad asset base that offers higher solvency.
- Return on capital expenditure: Historically, HDFC Bank has been able to effectively generate positive returns on the capital expenditure it has incurred on various ventures.
- Trained workforce: HDFC Bank has 104154 permanent full-time employees. HDFC Bank has invested heavily in training its employees, which has resulted in hiring a large number of professional and motivated employees. It has a diverse workforce with people from different ethnic, racial, cultural and educational backgrounds which help the company to bring different ideas and methods into its work.
- Entering new markets: HDFC Bank’s creative teams have helped it develop new products and enter new markets. In the past, it has been successful in most of the initiatives it has taken in new markets.
- Social Media: HDFC Bank has a strong presence on social media with millions of followers on the three most popular social networking platforms: Facebook, Twitter and Instagram. It has a high level of customer engagement with low response time on these channels.
- Website: HDFC Bank has a well-functioning and engaging website that attracts a large amount of traffic and sales online.
- Product portfolio: HDFC Bank has a wide range of products and services.
- Geography: The geography and location of HDFC Bank give it a cost advantage in serving its customers as compared to its competitors.
- Products & Services: HDFC Bank’s products and services include retail banking, wholesale banking, auto loans, treasury, personal loans, two-wheeler loans, real estate loans, lifestyle loans, consumer durable loans and credit cards. Payzapp and SmartBUY are digital products of HDFC Bank.
W Stands For Weaknesses ( Internal Factor )
- HDFC Bank does not have a strong presence in rural areas, while its direct competitor, ICICI Bank, is expanding in the rural market.
- HDFC cannot enjoy the first-mover advantage in rural areas. Rural people are very loyal in terms of banking services.
- HDFC lacks aggressive marketing strategies like ICICI. The bank mainly focuses on upscale customers
- Underrated: Some product categories of the bank are underperforming and lack reach in the market.
O Stands For Opportunities ( External Factor )
- HDFC Bank has better asset quality parameters than state-run banks, so profit growth is likely to rise
- Businesses in the large and mid-sized sectors are growing very fast. HDFC has a good reputation in running salary accounts for corporates
- HDFC Bank has improved its bad debt portfolio and the recoveries from bad debts are high compared to the government banks.
- HDFC has very good opportunities abroad Greater scope for acquisitions and strategic alliances due to strong financial position
T Stands For Threats ( External Factor )
- HDFC’s non-performing assets ( NPAs ) increased from 0.18% to 0.20%. While this is a slight change, it is not a good sign for the bank’s financial health.
- The number of non-banking financial companies and new-age banks is on the rise in India.
- HDFC is not able to increase its market share as ICICI is a major threat and State-owned banks are trying to modernize themselves to compete with private banks
- RBI has opened up to 74% for foreign banks to invest in the Indian market
Also, Read CRED Business Model in a Simplified Way.
SWOT Analysis Of HDFC Bank Key Takeaways
The SWOT Analysis of HDFC Bank highlights where the brand currently stands and its threats in this era. Following the detailed SWOT Analysis of HDFC Bank Here are a Few Important Key Points.
- Strong Network
- Wealthy Customers
- Clean Domination in Urban Area
Following the detailed SWOT Analysis of HDFC Bank, we have a few suggestions from Business Mavericks:
- Needs to focus on rural market
HDFC Bank STP & USP
- Segment: For people who want to invest their money in banks.
- Target Group: Corporations, HINs, middle-income groups, etc.
- Positioning: HDFC is a bank that puts the customer first.
HDFC Bank USP
HDFC Bank is the largest private and 2nd largest bank in India.
HDFC Bank Competitors
- State Bank of India (SBI) is an Indian multinational public sector bank and financial services company headquartered in Mumbai, Maharashtra. SBI is the 43rd largest bank in the world and is ranked 221st in the 2020 Fortune Global 500 list of the world’s largest companies, being the only Indian bank on the list. It is a public sector bank and the largest bank in India with a 23% market share in assets and 25% share in total loans and deposits. It is also the fifth-largest employer in India with nearly 250,000 employees.
- ICICI Bank Limited is an Indian financial services company headquartered in Vadodara, Gujarat, with a head office in Mumbai, Maharashtra. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of distribution channels and specialized subsidiaries in investment banking, life and non-life insurance, venture capital and wealth management. The Bank has a network of 5,275 branches and 15,589 ATMs across India and has a presence in 17 countries.
- Axis Bank Limited, formerly known as UTI Bank (1993-2007), is an Indian banking and financial services company headquartered in Mumbai, Maharashtra. It provides financial services to large and medium enterprises, SMEs and retail customers.As of June 30, 2016, 30.81% of equity shares were owned by the promoters and promoter group (United India Insurance Company Limited, Oriental Insurance Company Limited, National Insurance Company Limited, New India Assurance Company Ltd, GIC, LIC and UTI). The remaining 69.19% shares are owned by mutual funds, FIIs, banks, insurance companies, legal entities and retail investors.
- Kotak Mahindra Bank Limited is an Indian banking and financial services company headquartered in Mumbai, India. It provides banking products and financial services to corporate and individual customers in the areas of personal finance, investment banking, life insurance and wealth management. As of February 2021, the bank has 1600 branches and 2519 ATMs.
- Punjab National Bank, abbreviated as PNB, is an Indian nationalised bank. It is headquartered in New Delhi, India, and is owned by the Ministry of Finance, Government of India. The bank was established in May 1894 and is the second-largest government-owned bank in India in terms of both business volume and network. The bank has over 180 million customers, 12,248 branches and more than 13,000 ATMs.PNB has a subsidiary in the UK (PNB International Bank, with seven branches in the UK), as well as branches in Hong Kong, Kowloon, Dubai and Kabul. It has representative offices in Almaty (Kazakhstan), Dubai (United Arab Emirates), Shanghai (China), Oslo (Norway) and Sydney (Australia). In Bhutan, it owns 51% of Druk PNB Bank, which has five branches. In Nepal, PNB owns 20% of Everest Bank, which has 50 branches. PNB also owns 41.64% of JSC (SB) PNB Bank in Kazakhstan, which has four branches.