HDFC Bank expects to finalise "the right candidate" to succeed outgoing managing director Aditya Puri by July 2020, the private sector lender told analysts in a management call on Saturday post its earnings. HDFC will submit the candidate's name to the Reserve Bank of India for approval after the decision is made.

"Currently, the bank has shortlisted candidates (including global and internal) and expects to finalise the right candidate by Jul’20,” said banking analysts of Motilal Oswal in a report to investors. This will allow the management to ensure there is a seamless transition as Puri, who turns 70 next year, will retire in October.

In November, HDFC Bank had announced it had set up a six-member search committee to appoint a successor to Puri. The incumbent is the advisor to the panel that comprises HDFC Bank chairperson Shyamala Gopinath; additional director Sanjiv Sachar; additional independent directors M.D. Ranganath and Sandeep Parekh; director Srikanth Nadhamuni; and HDFC Ltd vice-chairman and managing director of Keki Mistry.

Aditya Puri has been leading the bank as the managing director since it was set up in 1994. According to the company's FY19 annual report, Aditya Puri's total remuneration was close to ₹13.7 crore.

Under Puri's leadership the bank has weathered the asset quality storm to have one of the most stable bad loan ratios. The lender's strategy to focus on the retail loan book allowed the bank to scale profitability and gain market share. HDFC Bank is regarded by investors as one of the most valuable banks in terms of PE ratio.

On Saturday, HDFC Bank beat street estimates and posted a strong earnings report card for the third quarter. Profit after tax increased 33% to ₹7,416.48 crore on a year-on-year basis largely on the back of robust growth in treasury income.

Other income was up by 35.52% to ₹6,669 crore, net interest income rose 12.7% to ₹14,173 crore in the third quarter, compared to the corresponding period last year.

However, there was a marginal decline in the asset quality: Gross NPA was 1.42% in December versus 1.38% in the previous quarter. Net NPA also increased to 0.48% from 0.42% on a quarter on quarter basis. HDFC Bank made specific loan-loss provisions of ₹7 billion.

"Asset quality has deteriorated as the bank reported higher slippages from lumpy accounts and the agri segment. However, provisioning buffers should enable a steady earnings trajectory," Motilal Oswal said in a report.

The loan book increased by 20% to ₹936,030 crore—led by the corporate segment that grew over 29%—on a year-on-year basis. However, retail loan growth was soft at 14.1% during the same period.

"Corporate loan growth for HDFC Bank is picking up and compensating well for the softness in its retail portfolio (caused by muted growth in the vehicle segment). Among retail assets, growth is coming primarily from the unsecured segments," notes the report.

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.