SWOT analysis of HDFC

Strengths

• HDFC bank is the second largest private banking sector in India having 2,201 branches and 7,110 ATM’s
• HDFC bank is located in 1,174 cities in India and has more than 800 locations to serve customers through Telephone banking
• The bank’s ATM card is compatible with all domestic and international Visa/Master card, Visa Electron/ Maestro, Plus/cirus and American Express. This is one reason for HDFC cards to be the most preferred card for shopping and online transactions
• HDFC bank has the high degree of customer satisfaction when compared to other private banks
• The attrition rate in HDFC is low and it is one of the best places to work in private banking sector
• HDFC has lots of awards and recognition, it has received ‘Best Bank’ award from various financial rating institutions like Dun and Bradstreet, Financial express, Euromoney awards for excellence, Finance Asia country awards etc
• HDFC has good financial advisors in terms of guiding customers towards right investments 

Weakness

• HDFC bank doesn’t have strong presence in Rural areas, where as ICICI bank its direct competitor is expanding in rural market
• HDFC cannot enjoy first mover advantage in rural areas. Rural people are hard core loyals in terms of banking services.
• HDFC lacks in aggressive marketing strategies like ICICI
• The bank focuses mostly on high end clients
• Some of the bank’s product categories lack in performance and doesn’t have reach in the market
• The share prices of HDFC are often fluctuating causing uncertainty for the investors

Opportunities

• HDFC bank has better asset quality parameters over government banks, hence the profit growth is likely to increase
• The companies in large and SME are growing at very fast pace. HDFC has good reputation in terms of maintaining corporate salary accounts
• HDFC bank has improved it’s bad debts portfolio and the recovery of bad debts are high when compared to government banks
• HDFC has very good opportunities in abroad
• Greater scope for acquisitions and strategic alliances due to strong financial position

Threats

• HDFC’s nonperforming assets (NPA) increased from 0.18 % to 0.20%. Though it is a slight variation it’s not a good sign for the financial health of the bank
• The non banking financial companies and new age banks are increasing in India
• The HDFC is not able to expand its market share as ICICI imposes major threat
• The government banks are trying to modernize to compete with private banks
• RBI has opened up to 74% for  foreign banks to invest in Indian market

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