On Saturday, the day when the Housing Development Finance Corporation (HDFC) was merged with HDFC Bank creating the fourth largest bank in the world with a market capitalisation of $180 billion, Sashidhar Jagdishan, MD and CEO of HDFC Bank said that the aim is to create one HDFC Bank in every four years given the lenders’ comfortable position in terms of capital and profitability.
“The pace at which we aim to grow – we could be creating a new HDFC Bank every 4 years!” Jagdishan said.
He further added that the bank would be adding 1500 branches every year for some years to reach out to the burgeoning middle and upper segments of the vast country.
“The runway for financial services and mortgage, which are so underserved and under penetrated, is going to be very large. HDFC Bank – the combined entity – with a large and growing distribution and customer franchise, more than adequate capital, a healthy asset quality and profitability, will be best positioned to capture growth,” he said in a letter to the employees, including those who came on board from the home financier.
The combined net profit for FY23 was Rs 60,348 crore with an asset base of Rs 22 trillion. With the addition of 523 HDFC branches, the total branch network now stands at 8344 as on March 31, along with 177,239 employees. 4017 employees of HDFC have joined the bank.
“We’re truly pleased to have you in our midst and I look forward to meeting you in the coming months. I also extend my heartfelt gratitude to each one of you for your hard work, dedication, and commitment during the 15-month integration process,” Jagdishan said in the letter while welcoming the HDFC staffer, which has been reviewed by Business Standard.
Jagdishan said the decision for the merger was spurred by the right timing, both, from an ‘Economics’ and a regulatory perspective. “Our work starts from today, in realising the potential of what this merger holds for us,” he said.
Jagdishan said to ensure there is fairness in tagging the right destination roles and levels in the bank, HDFC Bank had elected an independent external expert to arrive at formulae.
“A committee of seniors from Ltd and the Bank reviewed the expert’s work and did a management overlay wherever corrections were needed. In any such exercise there will always be the apprehension, leading you to wonder if you have been fairly treated,” he said, adding the bank will set up a grievance committee to hear the concerns of anyone who wishes to air their woes.
“We commit that once you settle into your roles, the committee will examine any further corrections to levels,” he added.
Jagdishan also acknowledged the role of Deepak Parekh, the chairman of HDFC, Keki Mistry, VC and CEO of HDFC, Renu Karnad, MD, and VS Ranjan, CFO of HDFC for creating and nurturing the branch for over 45+ years.
“As they hand over the baton to us, we have an onerous responsibility of taking this merged entity forward,” he said.
He also thanked former HDFC Bank Managing Director Aditya Puri for building a ‘top-class’ organisation. “We are blessed to have inherited a top-class platform built with passion and excellence by Mr Puri, his founding team and everyone, including you, through these 28 glorious years,” he said.
He concluded the letter by saying it is their responsibility now to take the opportunity to the next orbit.
“As the baton moves to us, it is our responsibility to be at the forefront to grab this once-in-a-lifetime opportunity and take it to the next orbit with the right conduct, ethos, culture and respect to customers that will make the country and stakeholders proud for generations to come,” he added.
