HDFC Bank board meeting with new chair Rajiv Kumar ‘refreshing’: CEO Jagdishan
HDFC Bank’s first board meeting, led by newly-appointed chairman Rajiv Kumar, was refreshing and well-received, Sashidhar Jagdishan, chief executive of the bank, told reporters on
HDFC Bank’s first board meeting, led by newly-appointed chairman Rajiv Kumar, was refreshing and well-received, Sashidhar Jagdishan, chief executive of the bank, told reporters on Saturday. Jagdishan said that Kumar had done a ‘lot of homework’ and the bank is eager to see a ‘great partnership between the board and the management over the years’. Kumar, a former chief election commissioner (CEC) and financial services secretary whose appointment was approved by the Reserve Bank of India (RBI) a few days ago, replaces interim chair and HDFC veteran Keki Mistry. “A hearty welcome to our new chairman, Rajiv Kumar. Looking forward to taking the franchise to the next growth stage. With the appointment of Kumar, there is a sense of stability and clear signal to minimize uncertainties in a very short time period,” said Jagdishan. Quick answers to key questions • 5 QUESTIONS 1 What were the key outcomes of HDFC Bank's first board meeting under chairman Rajiv Kumar? ⌵ The first board meeting under Rajiv Kumar was described as refreshing by CEO Sashidhar Jagdishan, who noted Kumar's extensive homework and expressed optimism for a strong partnership between the board and management.
2 Why did the appointment of Rajiv Kumar as chairman of HDFC Bank signal stability? ⌵ Kumar's appointment came after months of turbulence following the resignation of former chair Atanu Chakraborty, providing a sense of stability and a clear direction for minimizing uncertainties at the bank. 3 How is HDFC Bank's CEO reappointment process being handled? ⌵ The nomination and remuneration committee, led by Harsh Kumar Bhanwala, is overseeing the CEO reappointment process, and once a decision is reached, stakeholders will be informed of the outcome. 4 What impact did the recent financial results have on HDFC Bank's stock performance? ⌵ HDFC Bank's shares saw a modest recovery, rising by over 4% in the month leading up to its Q1 results, although the stock has still faced pressures with a year-to-date decline of 17%. 5 Should investors be concerned about HDFC Bank's non-performing assets (NPAs) trends? ⌵ While HDFC Bank's gross non-performing assets showed a slight increase to 1.17%, the overall asset quality remains stable, which should reassure investors about the bank's financial health. Kumar’s three-year tenure also comes after months of turbulence that started when former chair Atanu Chakraborty suddenly quit in March.
Chakraborty’s letter to the board cited ‘certain happenings and practices within the bank’ that were ‘not in congruence’ with his personal values and ethics. He did not elaborate. That led to an external review by two law firms and an eventual clean chit to the bank. Chakraborty later called the review a superfluous exercise. The law firm's review and the pending appointment of the chairman were delaying the board's decision on Jagdishan's tenure. Bank boards typically approve CEO reappointments and seek approval from the Reserve Bank of India about six months in advance. Unless reappointed, Jagdishan’s current term ends in October. CEO reappointment still pending Kaizad M. Bharucha, deputy managing director, HDFC Bank, said the bank’s governance, nomination and remuneration committee and the board are completely seized of the matter, and this (CEO appointment) is work in process. “Once we have a decision from them, we will certainly let all stakeholders know of the outcome of that decision,” said Bharucha. The board's three-member nomination and remuneration committee is headed by Harsh Kumar Bhanwala, the former chairman of the Bank for Agriculture and Rural Development (Nabard). However, it was unclear whether the committee met on Saturday or will do so next week.
The BriefWire