HDFC Bank AGM: Next three years will be very exciting for lender, says CEO Jagdishan

The next three years will be an exciting phase for HDFC Bank as it capitalises on its investments in technology, Managing Director and CEO Sashidhar Jagdishan told shareholders during the bank's 32nd Annual General Meeting (AGM), held virtually on Wednesday.

An improvement in net margins and CASA (current and savings account) ratio will start to be seen by April-June 2027, Jagdishan told investors. "Customer acquisition, production and business momentum will start to pick up," he added.  

The Bank board faced a barrage of questions which related to expansion plans to boost income, corporate governance, succession plans for a new CEO, the financial drag on the Bank after HDFC's merger with the Bank in July 2023 and how to improve margins and CASA.  

Shareholders also asked for AI initiatives, CSR details, sustainable projects and details of the findings of the law firms relating to the exit of former, part-time chairman Atanu Chakraborty in March.

HDFC Bank's part-time chairman Rajiv Kumar, responding to shareholders' queries said:" The Bank has been making necessary voluntary disclosures from time to time. There is nothing challenging which HDFC Bank faces from an ethical or governance concern.

Jagdishan explained to shareholders the issues relating to the HDFC merger. "Housing finance as a percentage of GDP is 11-12%. The need for housing will drive other aspects of the economy and we are clear that housing will be another engine for growth for us," Jagdishan said.

Jagdishan also focussed on the point that MSMEs lending will also be another growth engine for the economy and HDFC Bank. HDFC Bank is a leader in 15 states in this segment and amongst the top three banks in other states. The Business Banking portfolio (a large part of MSME lending) forms about 15.7% of the total advances of the with small and mid-sized enterprise loans growing 18.7% year-on-year for the Bank, based on Q1FY27 earnings data.

On queries relating to the Bank facing investigations from three US law firms, including Glancy Prongay & Rotter LLP, the Law Offices of Frank R. Cruz, and the Law Offices of Howard G. Smith, Jagdishan said that "No law suit has been filed so far.  The bank is well positioned to defend itself." Media reports said the law firms were evaluating potential federal securities law violations of American Depository Receipt (ADR) holders, amid a drop in prices of this instrument.