HDFC BANK All Analysis Assignment

HDFC BANK
About the company
HDFC Bank Limited is an Indian financial services company based in

Mumbai, Maharashtra that was incorporated in August 1994. HDFC Bank is
the fifth or sixth largest bank in India by assets and the second largest bank by
market capitalization as of February 24, 2012. The bank was promoted by the
Housing Development Finance Corporation, a premier housing finance
company (set up in 1977) of India. HDFC Bank has 1,986 branches and over
5,471 ATMs, in 996 cities in India, and all branches of the bank are linked on
an online real-time basis. As of 30 September 2008 the bank had total assets of
Rs.1006.82
Mission
HDFC mission is to be “World Class Indian Bank", benchmarking ourselves

against international standards and best practices in terms of product offerings,
technology, service levels, risk management and audit & compliance. The
objective is to build sound customer franchises across distinct businesses so as
to be a preferred provider of banking services for target retail and wholesale
customer segments, and to achieve a healthy growth in profitability, consistent
with the Bank's risk appetite. They are committed to do this while ensuring the
highest levels of ethical standards, professional integrity, corporate governance
and regulatory compliance
Vision
HDFC Bank is a young and dynamic bank, with a youthful and enthusiastic
team determined to accomplish the vision of becoming a world-class Indian
bank.
Objectives
 The objectives of HDFC Bank cover a wide variety of topics. They focus
on optimizing returns for shareholders, providing innovative products for
their customers, and committing themselves to a high level of ethics
Business strategy emphasizes the following :
 Increase the market share in India’s expanding banking and financial

services industry by following a disciplined growth strategy focusing on
quality and not on quantity and delivering high quality customer service.
 Leverage the technology platform and open scalable systems to deliver

more products to more customers and to control operating costs.
 Maintain the current high standards for asset quality through disciplined
credit.
BCG MATRIX
HDFC bank’s products can be mapped to the BCG matrix as shown below
Relative Market Share
High Low
STAR ?
High
HDFC Prudence HDFC rajiv Gandhi equity
savings scheme
HDFC Equity
HDFC Focuses Equity Fund
Market Growth Rate
Low CASH COW DOG
HDFC Top 200 HDFC Index Fund – Sensex

EXTERNAL ANALYSIS- OPPURTUNITIESPlan
AND THREATS
OPPURTUNITIES HDFC Balanced
1. HDFC bank has better asset quality parameters over government banks,
hence the profit growth is likely to increase
2. The companies in large and SME are growing at very fast pace.
3. HDFC has good reputation in terms of maintaining corporate salary

accounts
4. HDFC bank has improved it’s bad debts portfolio and the recovery of bad
debts are high when compared to government banks.
5. HDFC has very good opportunities in abroad Greater scope for acquisitions
and strategic alliances due to strong financial position.
THREATS
1) HDFC’s nonperforming assets (NPA) increased from 0.18 % to 0.20%.
2) Though it is a slight variation it’s not a good sign for the financial health of
the bank .
3) The non banking financial companies and new age banks are increasing in
India.
4) The HDFC is not able to expand its market share as ICICI imposes major
threat.
5) The government banks are trying to modernize to compete with private

banks RBI has opened up to 74% for foreign banks to invest in Indian
market.
PORTER’S FIVE FORCES MODEL
1. BARGAINING POWER OF SUPPLIERS
All most all the companies in the Foreign Regional Banks industry buy their
raw material from numerous suppliers. Suppliers in dominant position can
decrease the margins HDFC Bank Limited can earn in the market. Powerful
suppliers in Financial sector use their negotiating power to extract higher
prices from the firms in Foreign Regional Banks field. The overall impact of
higher supplier bargaining power is that it lowers the overall profitability of
Foreign Regional Banks.
2. BARGAINING POWER OF CUSTOMERS:
Buyers are often a demanding lot. They want to buy the best offerings
available by paying the minimum price as possible. This put pressure on
HDFC Bank Limited profitability in the long run. The smaller and more
powerful the customer base is of HDFC Bank Limited the higher the
bargaining power of the customers and higher their ability to seek increasing
discounts and offers.
THREAT OF SUBSTITUTES
When a new product or service meets a similar customer needs in different

ways, industry profitability suffers. For example services like Dropbox and
Google Drive are substitute to storage hardware drives. The threat of a
substitute product or service is high if it offers a value proposition that is
uniquely different from present offerings of the industry.
How HDFC Bank Limited can tackle the Treat of Substitute Products /
Services
 By being service oriented rather than just product oriented.

 By understanding the core need of the customer rather than what the
customer is buying.
 By increasing the switching cost for the customers.
Threats of New Entrants
New entrants in Foreign Regional Banks brings innovation, new ways of doing
things and put pressure on HDFC Bank Limited through lower pricing strategy,
reducing costs, and providing new value propositions to the customers. HDFC
Bank Limited has to manage all these challenges and build effective barriers to
safeguard its competitive edge.
INTERNALS
STRENGTHS
1. HDFC bank is the second largest private banking sector in India having
2,201 branches and 7,110 ATM’s.
2. HDFC bank is located in 1,174 cities in India and has more than 800
locations to serve customers through Telephone banking The bank’s ATM
card is compatible with all domestic and international Visa/Master card,
Visa Electron/ Maestro, Plus/cirus and American Express.
3. This is one reason for HDFC cards to be the most preferred card for
shopping and online transactions HDFC bank has the high degree of
customer satisfaction when compared to other private banks.
4. The attrition rate in HDFC is low and it is one of the best places to work in
private banking sector.
5. HDFC has lots of awards and recognition, it has received ‘Best Bank’
award from various financial rating institutions like Dun and Bradstreet,
Financial express, Euro money awards for excellence, Finance Asia country
awards etc.
6. HDFC has good financial advisors in terms of guiding customers towards
right investments.
WEAKNESS
1. HDFC bank doesn’t have strong presence in Rural areas, where as ICICI
bank its direct competitor is expanding in rural market.
2. HDFC cannot enjoy first mover advantage in rural areas. Rural people
are hard core loyals in terms of banking services.
3. HDFC lacks in aggressive marketing strategies like ICICI The bank

focuses mostly on high end clients Some of the bank’s product
categories lack in performance and doesn’t have reach in the market.
4. The share prices of HDFC are often fluctuating causing uncertainty for
the investors
Impact of Covid-19 on the performance of the Bank

The Indian economy would be impacted by Covid-19 pandemic with
contraction in industrial and services output across small and large businesses.
The Bank’s business is expected to be impacted by lower lending opportunities
and revenues in the short to medium term. The impact of the Covid-19
pandemic on Bank’s results, including credit quality and provisions, remains
uncertain and dependent on the spread of Covid-19, further steps taken by the
government and the central bank to mitigate the economic impact, steps taken
by the Bank and the time it takes for economic activities to resume at normal
levels. The Bank’s capital and liquidity position is strong and would continue
to be the focus area for the Bank during this period.

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HDFC BANK

About the company

HDFC Bank Limited is an Indian financial services company based in

HDFC mission is to be “World Class Indian Bank", benchmarking ourselves

 Increase the market share in India’s expanding banking and financial

 Leverage the technology platform and open scalable systems to deliver

Relative Market Share

HDFC Top 200 HDFC Index Fund – Sensex

OPPURTUNITIES HDFC Balanced

3. HDFC has good reputation in terms of maintaining corporate salary

1) HDFC’s nonperforming assets (NPA) increased from 0.18 % to 0.20%.

5) The government banks are trying to modernize to compete with private

PORTER’S FIVE FORCES MODEL

1. BARGAINING POWER OF SUPPLIERS

2. BARGAINING POWER OF CUSTOMERS:

When a new product or service meets a similar customer needs in different

 By being service oriented rather than just product oriented.

Threats of New Entrants

3. HDFC lacks in aggressive marketing strategies like ICICI The bank

Impact of Covid-19 on the performance of the Bank

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