With the merger of HDFC's subsidiaries into the bank, the new CEO and MD Sashi Jagdishan now holds the responsibility of steering the institution forward. As key figures like HT Parekh, Keki Mistry, and Renu Karnad retire, Jagdishan must uphold the group's legacy while navigating the challenges posed by the inclusion of large subsidiaries like insurance and mutual funds under the banking unit. While Karnad remains on the bank's board without an executive position, Mistry has joined the board. Thus, Sashi Jagdishan faces the exciting task of leading the group while leaving his own mark on its history.
Unlike their competitors who chased growth without considering profitability, HDFC Group maintained a sustainable growth rate of 20-25 per cent. They focused on profitability and ensured that growth was achieved steadily and prudently. While other banks suffered significant setbacks during the global financial crisis, HDFC Bank sustained its growth in assets, advances, revenues, and profits. This prudent approach extended to strategic decisions, such as their decision to stay away from the unit-linked insurance plan (ULIP) trend, which later faced mis-selling and regulatory challenges. Sashi Jagdishan, entrusted with a well-established group, must continue the legacy of sustainable growth and profitability as he expands the new financial services businesses.
The HDFC Group has demonstrated stability in leadership transitions, allowing CEOs the freedom to operate like entrepreneurs within a defined framework. Despite occasional speculation about tension between Deepak Parekh and Aditya Puri, it never affected the bank's operations. When Puri stepped down, Sashi Jagdishan smoothly assumed the role without disrupting the senior management. Similarly, Keki Mistry's elevation to CEO followed a seamless progression through various leadership roles. In other subsidiaries, leaders were selected from within or brought in externally to maintain a steady transition. The HDFC Group has always been quick to hire top-notch talent to fill key positions. These leadership practices have helped the group maintain stability and continuity.
Starting with mortgages, the HDFC Group has excelled in the financial services industry. They established one of India's first private sector banks in the 1990s, which later grew to become the country's second-largest bank. The group's asset management and life insurance businesses have also achieved leadership positions in the market. Sashi Jagdishan now faces the challenge of scaling up HDB Financial and HDFC Ergo, their non-banking finance and general insurance subsidiaries, respectively. These businesses hold tremendous potential for unlocking value, and Jagdishan must lay the foundation for a new set of financial services businesses in the next decade.
In his last letter to shareholders, HT Parekh emphasised the importance of change and adaptability in organisations. He acknowledged that the future is uncertain and that relying on past successes is not enough. Parekh believed in the power of orchestration and ensuring a prosperous future for all stakeholders. Sashi Jagdishan now carries the responsibility of fulfilling this vision and driving the HDFC Group forward into a new era of growth and success.