HDFC Bank to go for management overhaul months after mega merger: Report

Three months after its mega merger, HDFC Bank Ltd will be restructuring its top management, the bank reportedly told its employees in a memo sent on Sunday. The bank, as per a report in Bloomberg News, has brought information technology and digital functions, led by Ramesh Lakshminarayanan, directly under CEO Sashidhar Jagdishan. The bank has reportedly depending on technology to offer more products and services across its branches.

Besides, Ashish Parthasarthy, who led the treasury since 2009, will get responsibility for the key retail branch business that handles deposits and product distribution.

Under Parthasarthy, the lender is splitting the geographical management of the retail branch business to handle its expansion and product plans in a more structured way, the people said. It will be co-led by Smita Bhagat and Sampath Kumar, the report said.

Bhagat, one of the senior women leaders at the bank, was previously the group head for government and institutional business, ecosystem banking, inclusive banking and start-ups. Kumar was group head of liability products, third party products and non-resident business at the bank.

Besides this, Arvind Vohra, who previously led the retail branch business will take over the bank’s retail assets, excluding mortgages, which will be led by Arvind Kapil.

Parag Rao, who led the payments section, will take over product liabilities and product management, including marketing. Rakesh Singh will continue to lead investment banking and private banking, and will have additional responsibility for the offshore international business, the report said.

HDFC Bank: The merged entity

The merger of HDFC and HDFC Bank became effective on July 1, and Q2 FY24 will be the first quarter when the lender will report its results of the merged entity.

HDFC Bank Ltd., on July 1, said that the Composite Scheme of Amalgamation for the merger of HDFC Investments Limited and HDFC Holdings Limited, the wholly-owned subsidiaries of the Housing Development Finance Corporation (HDFC) Limited with and into HDFC Limited; and HDFC Limited, with and into HDFC Bank Limited has become effective from July 1, 2023 with the all the entities filing the certified approval copy of the NCLT with the Registrar of Companies.

In April 2022, HDFC agreed to acquire the country’s largest mortgage lender in a deal valued at about $60 billion in a bid to lead the home loans and consumer spending market in the world’s fastest-growing major economy.

Post the merger, HDFC Bank became the second largest bank in India, after State Bank of India (SBI). Based on FY23 data, the merged entity's loan book is Rs 22.2 lakh crore, inching closer to SBI's Rs 32 lakh crore, while the third largest bank- ICICI is at Rs 10.8 lakh crore.

Based on market capitalisation, the merged HDFC bank will be the fourth largest bank across the globe, after JP Morgan Chase, ICBC bank and Bank of America.

Share prices

HDFC Bank has seen a decline in its stock value in the past three months. The bank's performance has been relatively subdued compared to public-sector lenders, and uncertainties surrounding its merger with its home-financing parent have weighed on the stock.

It also faced a rare downgrade last month from Nomura Holdings Inc., which cited concerns on HDFC’s return on assets and pressures on loan growth.

On Tuesday, the shares of HDFC Bank Ltd closed at Rs 1,507.95, down by 1.22 per cent.

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