AFTER RBI APPROVAL, SASHIDHAR JAGDISHAN TAKES OVER AT HDFC BANK
MUMBAI: The Reserve Bank of India (RBI) on Tuesday approved the appointment of Sashidhar Jagdishan as the next chief executive officer (CEO) of HDFC Bank Ltd, signalling the start of a widely awaited transition at the country’s largest private bank amid the coronavirus crisis.
Aditya Puri, the current managing director and chief executive officer, is set to retire in October, after spending 26 years at the helm, since the bank’s founding in 1994.
Jagdishan, who turned 55 this year, is a Puri confidant and has held a number of senior positions in the bank, in finance and human resources (HR) roles among others. According to people familiar with the matter, Jagdishan was the bank’s top choice among the three shortlisted candidates it had sent RBI.
In November, the private bank had formed a six-member committee and hired executive search company Egon Zehnder to look for a replacement for Puri. The committee had shortlisted two internal candidates—Jagdishan and Kaizad Bharucha—and Sunil Garg, the head of Citibank’s global commercial banking business. Jagdishan who has served as an additional director and the head of finance at the private lender was elevated to the role of a ‘change agent’ last year.
He, however, continued to oversee the finance function of the bank.
Analysts termed the appointment as a big positive for the bank, with Suresh Ganapathy of Macquarie Securities describing him as a hard taskmaster—an important attribute for anyone taking over the reins of the lender amid the uncertainties of the Covid-19 pandemic. “In an uncertain environment like this, we believe an internal candidate who is in sync with the outgoing chief executive Mr Puri is the right choice. Sashi comes with a very diverse experience, having handled multiple functions in the bank and, hence, we believe that he is the appropriate choice,” said Ganapathy. According to Jefferies, the appointment should offer a smooth transition as Jagdishan has been closely connected internally with the management team and the board of directors, as well as the external stakeholders such as clients, investors and regulators. “We believe that he is well in sync with the on-the-ground realities, and this process would have also helped to establish his rise as a business leader,’’ Jefferies said in a note to its clients on Tuesday.
Nevertheless, Jagdishan has large shoes to fill. Under Puri’s leadership, HDFC Bank has delivered consistent growth with a focus on organic acquisition of businesses. The bank has delivered consistent returns on assets of around 2% and seen a valuation between 2.5-4 times, making it India’s most valuable lender. “Puri was known for his strategy, vision and execution. But Sashi is seen to be approachable, consultative and is known to make quick decisions,” said a senior HDFC banker who has worked with both men.
Sashidhar Jagdishan has held several senior roles at HDFC Bank in finance and HR.