MUMBAI: The ICICI Bank veteran, Anup Bagchi, has assumed charge at the country’s largest private sector lender, HDFC Bank, amidst many challenges ranging from governance issues to fleeing investors—share is trading below its 52-week low, falling margins and core income as well as almost near flat bottomline growth since the reverse merger with its parent in July 2023—a far cry for a bank known for booking more than 30% net income growth for as many as 34 successive quarters under the first chief executive Aditya Puri.
Bagchi is the first outsider to head the second-largest lender in its over-three-decade history. His previous assignment was for a three-year term as the chief executive and managing director at ICICI Life Insurance.
HDFC Bank, in a statement on Tuesday, said that Bagchi has taken charge as its managing director and chief executive. His predecessor Sashidhar Jagdishan, who landed in many a controversy, vacated office on Monday after completion of his term, the bank informed the exchanges.
For Bagchi, the key challenges are the falling core income growth and margins, alongside investor concerns over governance and leadership. Another sore issue is the yet-to-be fully completed post-merge integration, which was technically completed in July 2023.
In brief comments during an earnings call he attended, Bagchi said some work related to the bank's 2023 merger with its parent HDFC is yet to be completed. He also said he would meet stakeholders to better understand the bank and its business.
Bagchi had also praised the bank's current leadership under him as speculation continued over whether he would retain the existing management team or bring in new executives.
The leadership transition comes as Kayezad Bharucha, a veteran of the bank who serves as deputy managing director, has announced his intention to retire by December this year. He was a strong contender for the post, but got passed on for the second time in a row.
Jagdishan did not seek an extension of his tenure amid allegations of governance shortcomings. The bank's internal probe had found shortcomings in the practice of booking high-value deposits by paying depositors an additional amount over and above the card rate under a different head.
Jagdishan was also fined a nominal Rs 1 lakh over the practice along with the CFO and Kaizad by the board.
The bank faced further scrutiny following the surprise resignation of its non-executive chairman Atanu Chakraborty in March, citing unspecified concerns relating to values and ethics, bringing questions around the bank's practices into sharper focus.
HDFC Bank shares were trading at Rs 680 on the BSE at 1400 hrs on Tuesday, down 1.2% from the previous close. The stock has declined 33% over the past year and is trading below its 52-week low of Rs 681.90, against a 52-week high of Rs 1,017.50.
The stock has also fallen 31% so far this calendar year, reflecting the pressure on investor sentiment as the bank navigates growth and margin concerns alongside questions over governance and post-merger integration.
