HDFC Bank CEO-designate Bagchi to meet customers, regulators before taking over

After joining HDFC Bank, India's largest private-sector lender, as an additional director and chief executive designate, Anup Bagchi said on Saturday that his first priority was to meet customers and regulators.

Bagchi, who is set to take over the reins of the bank on 27 October, said he had been at the bank for "a few days" and knows "many of the teams". He said he would engage with regulators, customers, and stakeholders and gather insights, which would become key inputs for the organization.

Bagchi, who joined from the ICICI Group, was full of praise for the bank and its team. "Exceptional team, very strong team, very able team, and it's a very process-driven institution," said Bagchi. "(I am) thankful to the board for giving me this opportunity. I will work alongside the team and make sure that it goes from strength to strength."

The September quarter was also the last full quarter for incumbent CEO Sashidhar Jagdishan, who rose through the ranks to become chief financial officer in 2008 and then CEO in 2020, after Aditya Puri stepped down.

Bagchi described outgoing HDFC Bank executives Jagdishan and Kaizad Bharucha as "very warm" and said he was going to seek their inputs. He described HDFC Bank as an institution that is not dependent on just one, two, or three individuals.

Bharucha, the bank's deputy managing director, had requested that the board allow him to step down on 31 December, a request the board has accepted, the bank said in a regulatory filing on Saturday.

Long-time insider Bharucha was among the contenders for the top job, but his elevation was constrained by Reserve Bank of India (RBI) regulations that limit the tenure of whole-time directors to 15 years. Bharucha joined the bank's board in 2014, leaving him only until 2029 to remain a director.

Meanwhile, Jagdishan said that Bagchi would lead a team of able leaders who had been with the institution for a long time. "Anup has about 24 years of experience in the field of financial services. He is a seasoned player who has worked not only in banking but also in insurance. So he has a very holistic view," said Jagdishan.

The bank's net interest margin compressed 10 basis points to 3.16% from the previous quarter and the same quarter last fiscal year. Jagdishan said going forward, with the upward trajectory of interest rates, there should be a change because a large part of its balance sheet is linked to variable benchmarks and therefore there will be a slightly faster transmission on the asset side.

The bank's loan book grew 15.3% on-year to ₹33 trillion, while deposits grew 18.8% to ₹33.2 trillion in the same period.

Analysts were underwhelmed. "The weak earnings growth trend for HDFC Bank continued in Q2 FY27," analysts at Bernstein said in a note on Saturday.

Bernstein said that while balance-sheet growth remained healthy and asset quality stayed resilient, weaker treasury income and margin pressure weighed on profitability.

The note pointed out that loan growth continued to be driven by the corporate (16%) and mid-market (24%) segments, reflecting broader industry trends, while retail loan growth remained relatively subdued at 12%.