HDFC BANK, the country’s largest private sector lender by market capitalisation, will enter a new, and more critical growth phase of its corporate journey under a new managing director & CEO, given the imminent departure of Sashidhar Jagdishan in October.

The focus for the bank will shift towards improving margin growth, current account savings account levels and return on assets to levels closer to pre-merger with HDFC, alongside restoring credibility and trust among stakeholders at the bank.

The net interest margins from interest-earning assets for the bank has narrowed to 3.26% in June-end 2026 from 4.1% before the merger with HDFC became effective.

There is a growing possibility that HDFC Bank veteran, deputy managing director and whole-time director Kaizad Bharucha, might be considered by the board as a successor.

“The RBI [Reserve Bank of India] may want to look at an insider from the bank and Kaizad appears to be the frontrunner. Usually an ‘outsider’ is considered only if there is something dramatically wrong with the financials at the bank, which could need a change of culture and leadership,” says an analyst with a leading brokerage firm on the condition of anonymity.

Bharucha, along with the recently appointed part-time non-executive chairman and former finance secretary Rajiv Kumar and the CFO-designate Puneet Sharma, could give a new direction to the bank.

The stock price has declined by 25% in the past one year and 8% in the past five years. “A new leadership team, alongside an improvement in growth and earnings trajectory, should improve investor sentiment,” states a report from Motilal Oswal Financial Services.

Bharucha, who has been with the bank for 26 years, has managed diverse portfolios over his long stint and thus remains a prime candidate to succeed Jagdishan.

“However, given the cap of 15 years for board membership of a bank, it may restrict him to have a full three-year tenure and may need exceptional approval from the RBI,” states the Motilal Oswal report. Jimmy Tata, chief credit officer, who has been associated with the bank for more than 30 years, could also be a potential candidate.

“Moreover, there is a high likelihood that the board will evaluate external candidates for the role; however, given the limited time, the bank will need to fast-track the process,” mentions the report.

Besides Bharucha, the ‘outsiders’ whose some names are emerging, include Anup Bagchi, 55, MD & CEO of ICICI Prudential Life Insurance, K. Balasubramanian, CEO of Citi India, Rajiv Sabharwal, MD & CEO of Tata Capital and Vibha Padalkar, HDFC Life Insurance chief executive from with the HDFC group. The names of former SBI chairman Dinesh Khara (65), and HSBC India CEO Hitendra Dave are also doing the rounds.

Rikin Shah, senior vice president at IIFL Capital says: “A credible external candidate can provide a clean leadership reset and can be anyone from (a) sitting CEO of private banks, (b) former CEOs/senior bankers, (c) younger second-line CEO/CXOs.”

At the August 5 meeting, the bank’s board faced a barrage of questions related to governance, CEO succession plan and the need to address the financial drag after HDFC’s merger.

“Jagdishan not seeking a reappointment, removes the tail risk of him getting a truncated tenure by the RBI, which would have just prolonged the uncertainty and would have continued to weigh on the stock price. While Bharucha may seem like a probable choice; the 15-year whole-time director’s ceiling means he will have maximum one tenure only. In this context, a credible external candidate can provide a clean leadership reset and a longer runway to steer the bank,” says the analyst.

Motilal Oswal’s report mentions a possible profit growth recovery of 14% in FY28, against an average 9% during FY24-FY27.

Put simply, the incoming MD & CEO inherits the past just as the future demands the most.