HDFC Bank can take a larger exposure in infrastructure projects as the balance sheet has become bigger after its reverse merger with parent HDFC Ltd, Sashidhar Jagdishan, the bank’s managing director and CEO, said.

The merger, which came into effect from 1 July, has led to a combined loan book of Rs 22.45 trillion while deposits stood at Rs 20.63 trillion as on 30 June.

“This means we can participate more meaningfully in India’s growth story and contribute to nation building,” Jagdishan said in his message to the shareholders. 

The aim of HDFC Bank is to double the business every four years. “In light of all this, the pace at which we aim to grow – we could be creating a new HDFC Bank every four years,” he said.

Post-merger, the bank has a huge opportunity to grow its business.

“Buying a home is a family decision and an emotional one. This emotion is transferred to the home loan service provider and helps build lifelong bonds with the customer and his family. Also, only 2% of our customers source their home loans through the bank, while 5% do it from other institutions. This itself is a huge opportunity,” Jagdishan said.

As India grows, home buying will only accelerate and emerge as a key driver of the country’s GDP over the next decade. This is especially true for affordable housing. “Investments in infrastructure are vital for India’s growth,” he said.

In FY23, the bank added a record 1,479 branches, a majority of which are in semi-urban and rural (SURU) locations.

“We plan to add another 675 this year in SURU locations that will take the total number of branches in these locations to over 5,000. Overall, the bank plans to add 1,500 to 2,000 additional branches during the year,” he said.

“The concept of phygital branches will help us to be agile in meeting customer needs through digital transactions. It will also give customers a sense of engagement and security with a physical touch point,” he added.

With its digital platforms, digital journeys and physical branch network, HDFC Bank will have the ability to offer the home loan customer a complete bouquet of the bank's and subsidiaries' products and services.

"Savings accounts, personal loans, insurance cover, SIPs can all be bundled along with a home loan to create a compelling value proposition to the customer, that probably does not exist in the market at the scale at which this is envisaged," Jagdishan said.

Concerns over attrition

Jagdishan expressed concerns over the attrition rate at the bank, which had over 1.70 lakh employees as on 30 March 2023.

The bank's attrition rate was at 34.15% in FY23 versus an industry average of 24.7%. A total of 53,760 employees quit the bank in FY23, while 85,814 were added.

"The bank has experienced an increase in attrition over the last financial year and a significant part of which was in the 'non-supervisory staff' levels (which includes sales officers)," Jagdishan said, attributing the same to a post-COVID phenomenon, which may have prompted the younger workforce to recalibrate what they 'want from their lives'.

Jagdishan said he wants to focus on building an inclusive organisation, which will go a long way in reining in attrition in the coming years. He seemed to be referring to lapses on the cultural front like the unsavoury conduct of a senior manager during a business review meeting recently.

"I am fully conscious of the fact that there may be instances where some people managers might transgress our defined way of working. We have the resolve to nip this in the bud, both by way of training/counselling and appropriate action, to ensure that the same is not attempted by anyone else. Having said that, we have some distance to traverse on this front," he said.

Jagdishan said the bank is focusing on diversity, and plans to take the overall share of women in its workforce to 25% by end of FY25 from the current 23%.

The bank, which had invited unprecedented regulatory actions due to laxities on the technology front, has seen a significant improvement in its resilience and uptime metrics, Jagdishan said. 

It has migrated data centres to new state-of-the-art facilities in Mumbai and Bengaluru. The trend in complaints indicates that digital frauds are increasing, particularly targeting a vulnerable section of consumers, he said.