MUMBAI: Anup Bagchi, who is set to take over as HDFC Bank’s managing director and CEO, said he would soon draw up a strategic roadmap covering growth, margins, asset quality and productivity, as outgoing chief Sashidhar Jagdishan said the bank’s net interest margins (NIMs) had bottomed out and would improve from the next quarter.Speaking during the bank’s Q2 FY27 earnings call, Bagchi said he would consult regulators, customers, shareholders and other stakeholders before setting organisational priorities. He said the roadmap would focus on capital deployment, execution and governance as the bank responds to changes in the economy, artificial intelligence and digital infrastructure. “The clear long-term goal is to deliver sustainable long-term value for shareholders, employees, and clients,” Bagchi said.Jagdishan, who is stepping down after six years at the helm, said margins had come under pressure because lending rates fell faster than the cost of deposits during the rate-cut cycle. He said the trend would reverse as the rate cycle turned and retail and MSME loans accounted for a larger share of the bank’s assets. “The trajectory will be upward from the next quarter on,” Jagdishan said, responding to a question on the outlook for margins.HDFC Bank on Saturday reported a 4.7% year-on-year increase in net profit to 19,510 crore in the July-Sept quarter of FY27 (Q2FY27), as a decline in other income and higher operating expenses and provisions partly offset growth in core interest income.With 70% of loans linked to floating rates, mostly to the repo, the Oct rate hike is expected to reprice much of the book by Dec. Of Rs 1.6 lakh crore in deposit growth, Rs 1.3 lakh crore came from time deposits and FCNR(B) inflows, offsetting gains from calling AT1 bonds in Aug.Jagdishan said the branch network doubled over five years and will support deposit growth as it matures. Repayment of Rs 2.6 lakh crore in inherited HDFC Ltd wholesale borrowings distorted headline figures, while retail CASA remained in the late 40s. Technology investments are beginning to cut turnaround times through automated processes. Employee numbers have stayed flat for three years, but the workforce will shift towards customer-facing roles, with headcount potentially rising in three to four years.Jagdishan announced that Bharucha, a 30-year veteran who helped build the bank’s credit architecture, had sought early retirement by Dec 31, 2026. Jagdishan also said his tenure had included regulatory restrictions, Covid, the HDFC Ltd merger and governance issues. Bagchi’s forthcoming roadmap will set the bank’s priorities under its new leadership.
