HDFC's new CEO opens door to a comeback
RPT-BREAKINGVIEWS-HDFC's new CEO opens door to a comeback The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Ujjaini Dutta
BENGALURU, Oct 2 (Reuters Breakingviews) - The $116 billion HDFC Bank HDBK.NS has taken a step towards restoring its former glory by appointing Anup Bagchi as its new CEO. The boss of Prudential-backed PRU.L ICICI Life Insurance ICIR.NS has the deep banking and financial sector experience required to lead India’s largest private lender. As an outsider, he's also well placed to draw a line under problems that have left it languishing as one of the cheapest of its peers trading at just 1.7 times forward book value. But the path ahead will still be a slog.
Bad governance had become the biggest overhang on the one-time investor darling. In March, Chair Atanu Chakraborty suddenly resigned, citing ethical differences with the bank. In July, the board fined outgoing CEO Sashidhar Jagdishan and other senior executives for "business overreach" in deposit pricing; then within three weeks a group of US-based investors filed a class-action lawsuit against the lender, alleging it failed to properly disclose information about the incident.
And so it's reassuring to see a veteran of the ICICI group, which is widely respected for its professional management, take charge. On the same day of Bagchi's appointment, Anup Kumar Saha, who spent 14 years at ICICI Bank ICBK.NS, was named CEO of the $43 billion Kotak Mahindra Bank KTKM.NS. Both Indian lenders are struggling to bed down professional leadership after decades of heavy involvement by their respective founders.
Bagchi's experience of leading the development of ICICI Bank's internet banking as well as online trading platform ought to improve HDFC's technology architecture and service culture. Yet other operational issues may take longer to fix. Its net interest margin contracted to 3.34% in the year ended March 2026 from 4.1% in 2023, more sharply than at its peers. The lender's share of low-cost deposits as a ratio of total deposits also fell to 34.1% for the full year to March 2026 compared to 44% in 2023, weighing on profitability. In comparison, ICICI Bank's latest annual figure was 41.4%.
As an incoming CEO, Bagchi will have an opportunity to reveal any further bad news hanging over the bank in one go rather than letting it drip out slowly. The turnaround of ICICI Bank offers some hope: Sandeep Bakhshi joined the bank in 2018 when it was struggling with a bad debt crisis and now it trades at 2.3 times forward book value. But one lingering question is whether the 2023 merger of HDFC with its parent, then India's largest housing finance company, has permanently altered something about the bank's agility. The new leader will soon find out.
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CONTEXT NEWS
HDFC Bank on October 1 appointed Anup Bagchi as its CEO effective October 27, 2026, following approval from the Reserve Bank of India.
Bagchi is CEO of ICICI Life Insurance, a position he has held since 2023. Prior to that, he served on ICICI Bank's board as executive director from 2017 until taking over the insurer.
Outgoing CEO Sashidhar Jagdishan’s three-year term ends on October 26. Jagdishan had decided not to seek re-appointment to the role.
(Editing by Una Galani; Production by Aditya Srivastav)
((For previous columns by the author, Reuters customers can click on DUTTA/ujjaini.dutta@thomsonreuters.com))