HDFC Bank managing director and CEO Sashidhar Jagdishan has a new ambition to chase. The HDFC-HDFC Bank merger has already made the new entity the world’s fourth-largest bank by market capitalisation. His target now is to add another HDFC Bank every four years.

Possible, he says, given the bank’s profitability, asset quality and capital position. 

In FY23, the combined net profit stood at Rs 60,348 crore and the asset base at Rs 22 trillion. The total branch network was 8,344 as on 31 March, after the addition of 523 HDFC branches. The staff strength was 177,239 employees, with 4,017 moving in from HDFC.

As he writes to the employees, he expresses confidence over the lender’s future growth. “The pace at which we aim to grow - we could be creating a new HDFC Bank every 4 years,” Jagdishan says.

 How? The plan is to add 1,500 branches every year rolling over a longer period of time to reach out to the expanding middle class and upper segment of the country.

Jagdishan will follow an aggressive penetration strategy. HDFC, India’s largest housing finance company, needs to grab this opportunity in an under penetrated market. 

“The runway for financial services and mortgage, which are so underserved and under penetrated, is going to be very large. HDFC Bank - the combined entity - with a large and growing distribution and customer franchise, more than adequate capital, a healthy asset quality and profitability, will be best positioned to capture growth,” Jagdishan says in a letter to the employees.

The successor of Aditya Puri, whom he thanks for building a top-class organisation, realises that he has a challenging task at hand. “Our work starts from today, in realising the potential of what this merger holds for us,” he says.

Soon after the merger, HDFC Bank began a rebranding exercise and put up its colours at all the branches and offices of HDFC. The mortgage financier’s corporate headquarters at Ramon House already sports the HDFC Bank branding.

Another area of focus will be to continue investments on the digital front. The aim, Jagdishan says, is to make HDFC Bank into a “technology company into banking". This will get unveiled over the next three years, he adds.

The bank will be assessing its people on the basis of how they conduct governance and compliance, teamwork and their ability to delight customers, he says.

The canvas being offered to the HDFC Ltd employees is large -- both professionally and personally, the emailed letter says, adding that an external expert was appointed to arrive at the right formula for inducting people into the bank and deciding their role in the hierarchy.

“A committee of seniors from HDFC Ltd and the bank reviewed the expert’s work and did a management overlay wherever corrections were needed. In any such exercise there will always be the apprehension, leading you to wonder if you have been fairly treated,” he says, adding the bank will set up a grievance committee to hear the concerns of anyone who wishes to air their woes.

“We commit that once you settle into your roles, the committee will examine any further corrections to levels,” he adds.

According to Jagdishan, the cost-to-revenue ratio of HDFC at 0.04% was the lowest for any mortgage company in the world. 

He thanked HDFC’s leadership, including chairman Deepak Parekh, vice chairman and CEO Keki Mistry, managing director Renu Karnad and chief financial officer VS Ranjan, for creating such an institution.

“As they hand over the baton to us, we have an onerous responsibility of taking this merged entity forward,” he said.

He said from a customer perspective, the home loan is a very emotional product which establishes a great bond between the financier and borrower and added that HDFC Bank would like to harness the same bond.

HDFC Bank will move from sales management to a relationship management model because of the opportunity to cross-sell that exists within the franchise after the addition of mortgage finance, insurance and asset management subsidiaries, Jagdishan said.

"The velocity of product sales and the reduced touch points to serve the customer will be a game changer with this 'power of bundling'," he added.

HDFC Ltd, the parent of the country's largest private sector lender, merged into HDFC Bank today, with boards of both entities clearing the plan first presented on April 4 last year. HDFC Ltd, the largest pure-play home financier, ceases to exist 44 years after it was founded.

Concluding the letter, Jagdishan said it is their responsibility now to take the opportunity to the next orbit.

“As the baton moves to us, it is our responsibility to be at the forefront to grab this once-in-a-lifetime opportunity and take it to the next orbit with the right conduct, ethos, culture and respect to customers that will make the country and stakeholders proud for generations to come,” he added.