After Merger, HDFC Bank Rejigs Top Management To Drive Lending Business: Report

In April last year, HDFC Bank announced a plan to acquire India's largest mortgage lender HDFC in a transaction valued at approximately $60 billion. The merger was completed in July this year.

HDFC Bank employees received a memo regarding the top management revamp on Sunday, the report said citing people familiar with the matter. 

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HDFC Bank is making changes to its senior management team with an aim to drive its lending business. This move comes three months after India's largest non-banking finance firm Housing Development Finance Corp. (HDFC) merged with the bank in July. HDFC Bank employees received a memo regarding the top management revamp on Sunday, reported Bloomberg citing people familiar with the matter. 

As part of these changes, the Ramesh Lakshminarayanan-led Information Technology and Digital team will now report directly to the bank's Chief Executive Officer (CEO) Sashidhar Jagdishan. Furthermore, Ashish Parthasarthy, a long-time bank veteran who has been overseeing treasury since 2009, will now assume responsibility for the critical retail branch business, which encompasses deposit management and product distribution, the report said. 

To facilitate the bank's expansion and structured product plans in the retail branch business, Parthasarthy will oversee the geographical management, a role shared by Smita Bhagat and Sampath Kumar. Bhagat, a distinguished 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, Kumar served as the group head of liability products, third-party products, and non-resident business at the bank.

In April last year, HDFC Bank announced a plan to acquire India's largest mortgage lender HDFC in a transaction valued at approximately $60 billion. This strategic move aimed to capitalise on the flourishing market for home loans and increase consumer spending, the report noted. 

The merger united two entities with a combined market value of nearly $190 billion at that juncture. This decision came in response to a recommendation by the banking regulator RBI, urging large non-banking finance companies to transform into banks, the report noted. This transformation sought to prevent a recurrence of the significant shadow lending crisis that plagued the nation in 2018.

HDFC Bank's stock has faced downward pressure since its acquisition of Housing Development Finance Corp. (HDFC) in July. Additionally, the bank experienced a downgrade last month by Japan's Nomura Holdings Inc. The downgrade was attributed to concerns about HDFC Bank's return on assets and challenges related to loan growth. HDFC Bank's shares have also lagged behind those of other private lenders in India, the report said. 

On Tuesday, shares of HDFC closed at Rs 1,507.95, down 1.22 per cent from the last closing price.