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hdfc: HDFC Bank will be evaluated against global peers, says Jefferies report


International investors are more likely to club HDFC Bank with its global peers such as Bank of America and Wells Fargo to decide on their investment strategy as India’s most-valued lender becomes the seventh-largest bank in the world by market value, said investment bank Jefferies.

“With a market cap of $140 billion, HDFC Bank is now the seventh largest global large-cap bank. In our view, this can add a second dimension to investors’ selection processes, whereby HDFC may now be stacked up against banks in global portfolios, not just for emerging market portfolios, and compared with Indian banks,” Jefferies analysts Prakhar Sharma and Vinayak Agarwal said in a note.

“Over the next three years, we expect HDFC to deliver 16-17% compounded earnings growth aided by synergies from mergers as well as ramp-up of branches to mobilise deposits. This growth will be much higher than global large banks’ range of 3-7%, offering a strong case to be considered in large-cap bank / global portfolios.”

HDFC is the only bank with $100 billion in market-cap from India.

Among 14 global banks valued at more than $100 billion, five are from China, three are from the US, two from Canada and one each from the UK, Australia, Japan, and India.


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