India's IDFC First Bank says merger will boost credit growth

India's IDFC First Bank expects to spot robust recognition maturation pursuing its caller merger, according to managing manager and CEO V. Vaidyanathan. 

Last week, IDFC First Bank said its committee had approved its merger with IDFC Ltd., the latest successful a question of consolidation successful India's fiscal sector.

This comes conscionable days aft a $40 cardinal mega merger betwixt India's largest backstage lender HDFC Bank  with Housing Development Finance Corporation, the country's biggest owe lender.

Vaidyanathan said, arsenic a country, India is connected a "massive maturation trajectory," which holds immense maturation imaginable for the merged entity successful the adjacent term. 

"We are insiders of this state and we tin spot for ourselves connected day-to-day ground however the state is growing," helium told CNBC's "Street Signs Asia" connected Tuesday.

"For India's recognition market, fto maine accidental astir a 15% recognition maturation would beryllium a just anticipation successful the adjacent future. And for our bank, a 25% recognition maturation would beryllium a just anticipation with unchangeable plus quality."

Last week, IDFC First Bank said the projected merger would boost the bank's standalone publication worth by 4.9% compared with its financials arsenic of March 31. It besides said it aims to summation its equilibrium expanse by 20% to 25% per twelvemonth successful the adjacent to mean term.

"The merger volition pb to simplification of the firm operation of IDFC FHCL, IDFC Limited and IDFC FIRST Bank by consolidating them into a azygous entity and volition assistance streamline the regulatory compliances of the aforesaid entities," the merchandise added. 

Vaidyanathan noted the slope has cardinal "strategic goals" and since the "Indian marketplace is truthful ample and wide and we're inactive a tiny player, we deliberation that we tin turn astatine a bully complaint for a agelong clip to travel with a holding similar this."

Still, the woody is taxable to approvals from India's cardinal regulatory authorities, including the Reserve Bank of India, Securities and Exchange Board of India and India's banal exchanges.

Analysts have noted the caller merger volition not dent IDFC First Bank's prospects for inclusion successful the MSCI modular scale for August.

Inclusion successful the scale "would beryllium a large deal," said Vaidyanathan. "Whether we marque it present oregon aboriginal successful our mind, we person nary doubt. We are precise assured and frankly, it'd beryllium an grant to beryllium portion of MSCI scale for us," added the CEO.