Canadian Imperial Bank buys 4% in HDFC Bank

The $11.88 billion Canadian Imperial Bank of Commerce has picked up 4.06 per cent in HDFC Bank through open market purchases.

The stake has however been picked up by the Indian counterpart of CIBC World Markets Corp in which CIBC indirectly holds a controlling stake.

Rob McLeod, director, communications and Public Affairs while talking to Business Standard said that that the investment in HDFC bank was actually made by a private equity fund where CIBC has an investment and hence it was being considered at least as of now as a financial investment.

In a parallel development, HDFC Ltd's stake has declined by a little over 1 per cent in HDFC bank in the last few months. Till December 2004 HDFC held 13.56 in HDFC bank, which declined to 12.54 by March 2005.

Promoter holding in the bank has also declined from 24.03 per cent in December 2004 to 22.22 per cent in March 2005 -- a 1.81 per cent decline. HDFC Investment Ltd's stake in the bank has also declined from 10.47 per cent in December to 9.68 per cent in the same period - a 0.79 per cent decline.

This would possibly for the first time that a foreign bank has picked up any stake in HDFC bank. CIBC is a leading North American financial institution comprising three strategic business lines -- CIBC Retail Markets, CIBC Wealth Management, and CIBC World Markets.

CIBC provides financial services to more than nine million clients, including retail and small business banking clients as well as corporate and investment banking clients.

CIBC offers a full range of products and services through its comprehensive electronic banking network and at branches and offices across Canada, the United States and around the world CIBC has approximately 37,000 employees worldwide.

As of October 31, 2004, CIBC had assets of $278.8 billion and a market capitalization of $25.7 billion. Net income for the year ended October 31, 2004 was $2.2 billion.

CIBC would be the only entity holding more than 4 per cent in HDFC Bank, while LIC holds 4 per cent in the bank.

FIIs hold a total of 31.71 per cent in the bank of which Deutsche Securities Mauritius hold 3.89, Emerging Markets Growth Fund 1.45, SLAC 3.93, Small Cap World Fund 3.18 and The New Economy Fund 2.08.