The country's largest private sector lender HDFC Bank on Saturday reported a 5.55% increase in its consolidated net profit for the September quarter to Rs 20,700 crore, pointing out that the impact on treasury operations restricted profit growth.
The bank is in the middle of a leadership transition that will see ICICI Group veteran Anup Bagchi taking over as managing director and chief executive later this month, becoming the first outsider to don the mantle.
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It also announced that incumbent Deputy Managing Director Kaizad Bharucha has decided to leave.
Bagchi, who is presently serving as an additional director on the bank board, attended the post-earnings call, where he spoke about the institution's strengths and how he is "lucky" to lead the bank.
"In the very near term, I will gather insights by engaging with all the stakeholders, including the regulators, employees and also (incumbent MD and CEO) Sashidhar Jagdishan and Bharucha," Bagchi said.
He said the bank's transformational merger with home loan major parent HDFC has created a lot of strength but hinted at more work needed to be done on the balance sheet.
Jagdishan said Bagchi is an able leader with over three decades of experience in the financial services industry under him, and added that his successor will come out with a strategy to help the retail vertical, which has been causing some amount of concern ever since the merger, with declining share of low-cost current and savings account deposits that is leading to net interest margin contraction.
Jagdishan, who announced his decision to retire amid concerns related to ethics and governance, said the bank had to substitute HDFC's market borrowings with deposits, due to which it had to take a lot of high-cost term deposits and that the shift in household behaviour to park savings in capital market instruments led to a dent in CASA deposits.
Amid speculation on whether Bagchi works with the same upper-level management or gets his own people to lead key verticals, Jagdishan said the bank has depth in management talent and is driven by processes and not by individuals.
Bagchi concurred, saying the leadership has spent many years in the system and is fully committed, but refrained from commenting on whether he will consider a reset.
Replying to a query on succession planning and fewer executive directors, Jagdishan said Bagchi will use his "wisdom to decipher" on whom to elevate to the board.
"I can assure you that the talent is available; it is for the board and Anup to decide," he added.
To a query on why he and Bharucha decided to leave, Jagdishan said after three decades leading and helming an institution, it was time to look at life outside of the bank.
"It's a personal call; I have no regrets and leave with a lot of pride and satisfaction. The institution will rock. We shall watch as investors from outside," he added.
The bank management and Bagchi declined to comment on any other questions, including governance concerns, challenges the newcomer sees ahead, etc., asking reporters to focus on Q2 earnings.
Meanwhile, when asked about the bank mobilising only $11 billion in the FCNR(B) window against $18 billion by nearest rival ICICI Bank, Jagdishan said its thin overseas presence led to this outcome and adding strength in foreign presence must be a strategic focus going ahead.
On the home loans front, where SBI has raced ahead of the bank, Jagdishan acknowledged that it is a very competitive market and the bank walked out of some business because the NIMs did not make any business sense.
He added that Bagchi may like to have a relook at the strategy going forward.
In the quarter under review, HDFC Bank's net profit grew 4.7% to Rs 19,510 crore on a standalone basis.
The bank said excluding the treasury performance, the profit after tax showed a growth of 12.6% year-on-year.
The NIM contracted further to 3.2% from 3.3% in the quarter-ago period, and the CASA ratio came down to 31%.
The gross non-performing assets ratio improved to 1.11% from 1.17% a quarter ago and 1.24% in the year-ago period.
The bank management said it has not witnessed any setbacks in the agri loan portfolio.
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Its overall employee base has declined by 2,849 during the three months and by around 10,000 over the year to 2.10 lakh staff members.
Overall capital adequacy stood at 18.9% as of Sept. 30, 2026, which was down from 20% in the year-ago period.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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