HDFC Bank merger: CEO Sashidhar Jagdishan bank to focus on profitable growth, bring down credit-to-deposit ratio to pre-merger levels

A year after merging its subsidiaries, HDFC Bank on Thursday said that it will focus on achieving profitable growth while maintaining high asset quality standards. HDFC Bank said it will reassess its liability profile to align with its strategic goals and enhance financial stability.

Issuing a note to the shareholders and investors, HDFC CEO Sashidhar Jagdishan said the bank is now a new organisation with a different balance sheet composition. For example, it has a higher proportion of borrowing at 21 per cent versus 8 per cent pre-merger and a lower CASA ratio. 

Key metrics of the new organisation will be different than that of pre-merger levels. For us, this is HDFC Bank 2.0 that has to be seen differently, and comparing with the past in terms of metrics would not be the right way.

"The merger has presented the Bank with a massive opportunity which we’re working to seize. India is today in the midst of unprecedented urbanisation, fuelled by rising incomes and aspirations cutting across metros and beyond. The merger has opened up fresh vistas for growth through the mortgage business, not only through increase in home loan disbursals, but also by leveraging customer engagement with the cross-sell opportunities across the HDFC Bank Group. The Bank has exhibited robust and consistent double-digit, year-onyear growth across its Home Loan business for the first nine months, post the merger. On a sequential basis too, it has gained a leading position recording a growth of 4 per cent," Jagdishan said.

CEO Jagdishan said the bank has added over 900 branches in the year gone by, and will continue to add more this financial year. "These phygital branches are our investments. They will undoubtedly help garner deposits in the future... The older bank branches will act as 'engines of deposit mobilisation," he said.

"There has been a lot of discussion around our NIM and credit to deposit ratio post our merger as well as the path we would pursue, given the scale of deposit mobilisation required for our growth needs. Post the merger, we are looking at a very different liability profile. We are clear in our intent of pursuing profitable growth. The Bank will continue to focus on granular deposit mobilisation leveraging our inherent distribution strengths and the execution focus that we are known for. It is our endeavour to bring down the credit to deposit ratio to pre-merger levels," he added. 

On Cyber Security

At HDFC Bank, cybersecurity and data privacy best practices are important priorities. The Bank remains committed to maintaining a secure cybersecurity posture to protect its technology, confidential information, data integrity, and business continuity. Our strong information security programme, security policies and
processes are aligned with various information security management frameworks in the industry and provide necessary assurance on protecting the Bank’s critical information. 

"Our deepest anguish is the threat landscape our customers face leading to compromise of their credentials and a financial loss. The Bank has invested
in technology using AI and ML to arrest attempts at customers falling prey to scams and fraudsters. We urge customers to continue to be vigilant and follow safe banking practices, not allowing socially engineered fraud to succeed. The Bank has regularly been running Secure Banking campaigns through social media, SMS, Emails, ATMs, Bank website and various other channels. The Bank’s Vigil Aunty campaign covering the various modus-operandi of fraudsters is one such example of awareness building. Further, we continue to collaborate with law enforcement agencies, regulatory authorities and peer banks to educate customers on safe banking practices," he said.