HDFC Bank Starts Preparing For Life After Aditya Puri

Aditya Puri retires in October 2020 as the bank’s managing director.

Pedestrians walk past a security guard outside an HDFC Bank Ltd. branch in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)
Pedestrians walk past a security guard outside an HDFC Bank Ltd. branch in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

HDFC Bank Ltd. is slowly moving towards succession planning, ahead of the retirement of founding Chief Executive Officer Aditya Puri. Puri’s term ends in October 2020.

At an analyst meet on Wednesday, Puri laid down a roadmap for the transition and said that the depth of leadership at the bank will ensure that the handover is smooth.

The management intends to start the process of identifying a successor 18-24 months ahead of Puri’s retirement. The bank plans to have a 12-month overlap period during which the new successor will work with Puri. The bank will look at talent which could be internal or external and an announcement will be made in next 18 months, said Puri.

Commenting on the near term business outlook, the bank’s top management told analysts that growth was on track. Even if there is a moderate recovery in the capex cycle, this is unlikely to derail retail credit growth. Retail credit growth will continue to do well at least for the next five years driven by under-penetration, said Puri.

Top 10 Highlights From HDFC Bank Analyst Meet

  1. Announcement of a successor to Aditya Puri will be made in around 18 months; Position can be filled internally or externally.
  2. Bank to maintain focus on organic growth and M&A is not on the table.
  3. Semi-urban areas will be a key driver of growth and now forms 20 percent of business.
  4. Management doesn’t see concerns on asset quality in unsecured personal loans segment.
  5. HDB Financial Services has been growing well; may list this in next few years.
  6. Bank has focused on working capital financing and 70 percent of book is in working-capital loans.
  7. Will participate in roads, transmission and renewables segment in infrastructure financing segment.
  8. Next phase of digital will be focused on enhancing the customer experience.
  9. Even a moderate capex cycle is unlikely to derail retail growth and asset quality in the near-term.
  10. See significant growth potential in HDFC Securities by leveraging the bank’s customers.

(Highlights compiled from Nomura, CLSA and Edelweiss reports.)