HDFC Bank to open over 250 new branches by March

In a massive expansion drive, HDFC Bank is targeting over 1,000 branches by the end of this fiscal, a move that could help it overtake bigger rival ICICI Bank in terms of branch network.

HDFC Bank, the country's second largest private sector lender, currently has 746 branches, over 200 less than those of ICICI Bank.

The Mumbai-based lender said in a communication to its customers that "the bank is gearing up to expand its current network of branches to cross the 1,000 branches mark in the near future".

When contacted, a bank spokesperson declined to comment on the timeline for this planned expansion, saying it was "subject to RBI approval". However, people close to the development said that the bank was looking to achieve this target by opening more than 250 branches by March this year.

ICICI Bank, with a branch network of close to 950, is believed to have no immediate plans to expand it in India. The country's biggest private sector lender has more than 3,600 ATMs, as against about 1,650 of HDFC Bank.

HDFC Bank is also looking to expand its overseas presence by opening branches in Bahrain, Hong Kong and London. Its overseas presence is currently limited to a representative office in Dubai.

It is in the process of seeking regulatory clearance for opening Hong Kong branch and is expected to start operation in Bahrain in the next quarter. However, plans for London are believed to be at a preliminary stage.

The aggressive branch network expansion plans come amid HDFC Bank seeking a considerable presence in the investment banking business as well, which the industry experts believe would help it grow its fee-based income by a wide margin.

The bank is understood to have already got the necessary regulatory approvals for investment banking and is looking to start the operations by early next fiscal.

In its customer advisory, the bank said that in anticipation of the branch network expansion, its systems would undergo a major upgradation and therefore ATM operations would be disrupted tomorrow, January 25, between 9.30 pm to 12 midnight.

The net banking, mobile banking and alert services would also be affected from January 25 to January 27. However, all channels and services would be available as usual from January 28 onwards, the bank said.

For the quarter ended December 2007, HDFC Bank clocked 45 per cent rise in profit at Rs 429 crore against Rs 296 crore in the same quarter previous year. Increase in profits was due to rise in net interest income as well as other income.

The bank also witnessed 40 per cent growth in both retail and corporate loans. Retail loans now form 52.6 per cent of total advances.

Shares of the bank were trading at Rs 1,500, down 2.26 per cent, at the Bombay Stock Exchange in late afternoon trade.