Sashidhar Jagdishan, CEO and Managing Director, said that HDFC Bank is proposing to double its branch network over the next three to five years, adding 1,500 to 2,000 branches a year, which equates to adding a new HDFC Bank every five years.

Outlining the rationale for HDFC’s merger with HDFC Bank in his letter to shareholders in its 2021-22 annual report, Jagdishan said: “The proposed merger adds a completely different dimension to the future. We believe the runway is huge, and we have the potential to add HDFC bank every five years.”

He further said that the bank plans to nearly double its branch network in the next three to five years, opening 1,500 to 2,000 branches yearly. Currently, it has over 6,000 branches in India.

Earlier this year, Housing Development Finance Corporation (HDFC) and its subsidiary HDFC Bank announced a transformational merger, expected to be completed within 15 to 18 months.

Referring to the statistics, Jagdishan said that only 2% of its clients got home loans from us, while 5% got loans from other institutions. This makes HDFC Bank aware of the opportunity size, adding that the long-term nature of home loans provides resilience to its balance sheet. The bank is one of the country’s largest consumer durables financial institutions.

Talking about the timing of the merger, he said there are other favourable factors, such as the narrowing of regulatory arbitrage between banks and NBFCs over the past few years and the reduction in reserve requirements from 26% to around 22%.