HDFC Bank Restructures Leadership Following Mega Merger
HDFC Bank is implementing changes to its top management structure aimed at invigorating its mortgage business, following its acquisition of another lender just three months ago. The specifics of these changes were communicated to the bank's employees in a memo released late on Sunday, according to sources familiar with the matter, who requested anonymity due to the sensitive nature of the information.
As part of this restructuring, the bank is moving its information technology and digital functions, overseen by Ramesh Lakshminarayanan, directly under the purview of Chief Executive Officer Sashidhar Jagdishan. This strategic shift underscores the bank's increasing reliance on technology to expand its portfolio of products and services offered through its branch network. Concurrently, Ashish Parthasarthy, a long-standing figure at the bank who has led the treasury division since 2009, will assume responsibility for the crucial retail branch business, which manages deposits and product distribution.
The acquisition of Housing Development Finance Corp. (HDFC) in July, which catapulted HDFC Bank into one of the world's largest banks, has placed considerable pressure on the bank's shares. In addition, the bank experienced a rare downgrade last month from Nomura Holdings Inc., citing concerns about HDFC's return on assets and mounting pressures on loan growth.
The deal to merge the two entities, with a combined market value of nearly USD 190 billion at the time, was struck last April. This move was driven by the surging demand for home loans and increased consumer spending in the world's fastest-growing major economy. Furthermore, it followed a regulatory proposal for large non-banking finance companies to transition into banks, aiming to prevent a recurrence of the significant shadow lending crisis that hit India in 2018.
Under the leadership of Ashish Parthasarthy, HDFC Bank is subdividing the geographical management of the retail branch business, with the goal of better structuring its expansion and product strategies. This approach will be co-led by Smita Bhagat and Sampath Kumar. Smita Bhagat, a prominent senior leader at the bank, previously held the position of Group Head for government and institutional business, ecosystem banking, inclusive banking, and start-ups. Meanwhile, Sampath Kumar was the Group Head of liability products, third-party products, and non-resident business at the bank.
These changes signal HDFC Bank's determination to adapt and thrive in the evolving financial landscape, particularly in light of its significant merger and the dynamic challenges facing the banking industry.
