Shares of India’s HDFC Bank rose as much as 1.8% on Monday, as investors welcomed the appointment of Anup Bagchi as CEO, the first external candidate to lead the country’s biggest private lender, ending weeks of uncertainty regarding leadership.
Bagchi succeeds Sashidhar Jagdishan, who decided in August not to seek reappointment after his second three-year term ends on October 26.
Shares were trading about 1% higher at 728.6 rupees as of 9:37 a.m. IST.
Bagchi, currently CEO at ICICI Prudential Life Insurance, previously held senior roles at ICICI Bank ICBK.NS , the country’s second-biggest private lender, where he oversaw its retail and wholesale banking businesses. He also led ICICI Securities for six years.
Brokerages said the appointment is expected to serve HDFC well.
It allows the bank to optimise its operating structure and leadership team to better achieve growth, profitability and governance objectives, said Jefferies.
A key overhang surrounding the bank’s leadership has been removed, noted Motilal Oswal, adding that Bagchi brought an external perspective at a time when the firm is seeking to rebuild investor confidence.
His experience across retail and wholesale banking, digital financial services, capital markets, wealth management and insurance will be an asset across HDFC’s BFSI segments, the brokerage added.
Emkay Global said stability in upper management, reviving deposit growth and improving productivity of newer branches would be key priorities for the incoming CEO.
Jagdishan, who succeeded Aditya Puri as HDFC Bank CEO, had been expected to remain in the role despite having less than three years before reaching the regulatory tenure limit.
His departure follows Chairman Atanu Chakraborty’s abrupt March resignation over governance concerns that an independent legal review did not substantiate.
The bank on Saturday posted a jump of around 18.8% in its deposits and a 16.3% rise in its gross advances as of September end.
Reuters
