IIDE-Site-Logo

A Brief Sketch SWOT Analysis Of HDFC

by | Case Studies | 0 comments

Introduction

HDFC is the most comprehensive corporation in India. The bank is one of the toughest contenders in the private banking area.  It is placed 45th amongst the top 50 sequences of the business. 

In this case study, we will be discussing the strengths and weaknesses as internal factors and opportunities and threats as the external factors of HDFC. 

So, let’s begin with the introduction of the company.

Digital-Marketing-MasterClass

About HDFC 

HDFC Limited is the promoter of the organization, which was established in 1977. Housing Development Finance Corporation Limited (HDFC) received in-principle clearance from the Reserve Bank of India in 1994 as part of the liberalization of the banking system, and it was commercialized in 1995.

Its trading top is secured at approximately INR 261,226.94 crore. The organization has a powerful network of over 3,659 branches in 2,287 towns. It promotes NRI (Non-Resident Indian) banking, the bank also has branches in Bahrain, Hong Kong, Abu Dhabi, Kenya, and Dubai.

Consolidated in 1994, HDFC Bank is the entirety of the most advanced private division banks to receive the endorsement of RBI in this division. It has a pan-India network that includes 5400+ banking locations in 2800+ cities, a customer base of more than 56 million, and all of its subsidiaries are linked via online real-time evidence.

The bank has developed a core banking infrastructure that is backed by Flexcube for corporate banking and i-flex solutions Ltd. for retail banking. The bank has a favored program called HDFC Bank Plus that caters to the needs of high net worth individuals. Wealth management investment advisory services address a variety of financial demands and investment options, as well as providing advice.

Now that we have an overview of what HDFC is. Let’s begin exploring the SWOT analysis of HDFC. 

SWOT Analysis of HDFC

A SWOT analysis is a basic yet effective method for developing the business strategy, whether starting a business or leading an established one. 

SWOT means

  • Strength
  • Weakness
  • Opportunity
  • Threat

Let’s take a closer look at each of the SWOT analysis in the upcoming sections.  

Strengths of HDFC

HDFC’s strengths are internal, good characteristics that are under the company’s control. They are as follows.

  1. HDFC Bank is India’s second-largest private banking sector, with 2,201 branches and 7,110 ATMs.
  2. The ATM card issued by the bank is compatible with all domestic and international Visa/Master cards, Visa Electron/Maestro, and American Express cards. This is one of the reasons why HDFC cards are the most popular for shopping and online transactions.
  3. When compared to other private banks, it has a high level of customer satisfaction.
  4. The bank has a low employee turnover rate and is regarded as one of the best places to work in the private banking sector.
  5. It has received numerous awards and recognition, including the title of “Best Bank” from various financial rating institutions such as Dun and Bradstreet, Financial Express, Euromoney Awards for Excellence, and Finance Asia Country Awards.
  6. In terms of guiding customers to the right financial decisions, HDFC has good financial advisors.

HDFC maintains a good reputation with its products and services. So, let’s see where HDFC lacks in the coming section. 

Weaknesses Of HDFC

Weaknesses are flaws that detract from one’s strengths. These are areas that the business may need to improve to remain competitive.

  1. HDFC Bank does not have a strong presence in rural areas, whereas ICICI Bank is expanding in the rural market.
  2. In rural areas, the bank cannot benefit from a first-mover advantage. Rural residents are staunch supporters of banking services.
  3. Unlike ICICI, HDFC lacks aggressive marketing strategies. The bank primarily serves high-end clients.
  4. Some of the bank’s product categories are underperforming and have limited market reach.
  5. The share price of the bank fluctuates frequently, causing investors to be uncertain.

With this, the segment of weaknesses ends. So, let’s start to focus on the opportunities to know about the prospects grasped by HDFC. 

Opportunities of HDFC

External aspects in the business environment that are likely to contribute to the success of the company are known as opportunities. Below mentioned are the opportunities of HDFC.

  1. Because HDFC Bank has better asset quality parameters than government banks, profit growth is expected to increase.
  2. Companies, both large and small and medium-sized, are expanding at a rapid pace. HDFC has a good reputation for keeping corporate salary accounts up to date.
  3. When compared to government banks, HDFC Bank’s bad debt portfolio has improved and its bad debt recovery rate is high.
  4. Because of its strong financial position, it has very good opportunities in foreign markets, with greater scope for acquisitions and strategic alliances.

With its unique strategy and strong financial position, the bank maintains a robust position in the business world.

Threats of HDFC

External elements over which the bank has no control are referred to as threats. The company needs to develop contingency plans for coping with them if they arise.

  1. The non performing assets (NPA) of HDFC increased from 0.18 to 0.20 percent. Even though it is a minor difference, it is not a good sign for the bank’s financial health.
  2. The number of non-banking financial companies and new-age banks in India is growing.
  3. The HDFC is unable to increase its market share because ICICI poses a significant threat.
  4. Government banks are attempting to modernize to compete with private banks.
  5. The Reserve Bank of India has granted foreign banks permission to invest up to 74 percent of their assets in the Indian market.

These are the threats faced by the company. Now we have fully covered the SWOT analysis of HDFC bank. So, let’s end this case study shortly. 

Digital-Marketing-MasterClass

Conclusion

HDFC Group, a distinguished financial conglomerate, including performance in dwelling finance, investment, life, and non-life protection, asset superintendence, real estate funds, and teaching finance. The company is an example of India’s advanced housing finance corporations and our preponderance stockholder. 

The company’s SWOT analysis contributed to the formulation of crucial suggestions, including the creation of a new vision and strategy and adherence to current performance indicators.

Were you able to learn something new? Are you interested in learning more? For further information, visit our website’s knowledge portal. Furthermore, if you’re interested in Digital Marketing, Karan Shah, the Founder, and CEO of IIDE, offers a free Digital Marketing masterclass.

Please leave a comment below with your opinions on this case study. Thank you for taking the time to read, and if you enjoyed it, please tell your friends and family about it.

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

Aditya Shastri

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *