Indian private lending giant, HDFC Bank, has been given permission by the Reserve Bank of India (RBI) to purchase up to 9.5 per cent of AU Small Finance Bank within a year of the approval date. The approval will expire if the acquisition is not completed within this period.
The apex bank’s letter, dated January 3, 2025, permits HDFC Bank and its group companies, such as HDFC Mutual Fund, HDFC Life Insurance, HDFC Pension Management, HDFC ERGO General Insurance, and HDFC Securities, to jointly buy up to 9.5 per cent of AU SFB’s paid-up share capital or voting rights, according to a regulatory filing made by AU Small Finance Bank on saturday 04 January.
HDFC Bank to buy stake in Capital SFB and Kotak Mahindra bank
In a different notification, HDFC Bank revealed that it has also obtained RBI approval to purchase a share of up to 9.5 per cent in Capital Small Finance Bank and Kotak Mahindra Bank. Until January 2, 2026, this approval is still in effect.
Nonetheless, the bank has to make sure that the total ownership of these institutions by its group companies never goes over the 9.5 per cent mark. In accordance with the RBI Directions 2023, ‘aggregate holding’ refers to the shares held by the bank, its affiliates, mutual funds, trustees, and promoter group companies.
Exchange filling
HDFC Bank Q2 FY25
In the same period last year, HDFC Bank’s standalone net profit increased by 5.3 per cent to Rs 16,821 crore from Rs 15,976 crore. The difference between interest earned and paid, or net interest income (NII), increased by 10 per cent to Rs 30,110 crore from Rs 27,390 crore during the same period last year.
Net interest margin and income
In the September quarter, the largest private lender in India by market value had a core net interest margin (NIM) of 3.46 per cent on total assets and 3.65 per cent on interest-earning ones. This was higher than the 3.47 and 3.66 per cent NIMs in the June quarter.
The bank’s interest income for the quarter was Rs 74,017 crore, up from Rs 67,698 crore during the same time last year. The total revenue of the Mumbai-based lender climbed to Rs 85,500 crore during the reviewed quarter, up from Rs 78,406 crore during the same time last year.
