HDFC Bank

By Gopika Gopakumar

MUMBAI, Oct 8 (Reuters) - HDFC Bank HDBK.NS chief Anup Bagchi will be India's highest-paid bank CEO when he takes charge at the end of October, with an annual compensation of about $3.7 million, regulatory disclosures showed.

Bagchi, a veteran banker who spent nearly three decades with the ICICI Bank ICBK.NS group, is slated to lead India's largest private lender following the departure of Sashidhar Jagdishan in one of the most closely watched leadership transitions in India's banking sector.

The proposed annual remuneration comprises a fixed pay of 89 million rupees and a performance-linked variable pay of up to 269 million rupees, of which 88.8 million rupees will be in cash and 180.4 million rupees in share-linked instruments.

HDFC Bank has proposed paying Bagchi a one-time joining bonus of 73.5 million rupees in restricted stock units and stock options. Including the bonus, Bagchi's total potential compensation linked to his appointment in the first year could reach about 432.4 million rupees.

India's central bank has approved Bagchi's compensation package, though it still needs approval from shareholders, who are voting in a postal ballot that closes on November 6.

The proposed package puts Bagchi ahead of peers at other major lenders and above his predecessor Jagdishan, whose remuneration stood at 151.3 million rupees. It also exceeds the 193.4 million rupees earned by Kotak Mahindra Bank KTKM.NS CEO Ashok Vaswani.

A large portion of the compensation is tied to Bagchi's performance and stock-linked awards, meaning the final outcome could vary.

Bagchi takes over at a time when HDFC Bank is navigating governance-related scrutiny and facing a slowdown in growth after its merger with former parent HDFC.

($1 = 96.7800 Indian rupees)

(Reporting by Gopika Gopakumar; Editing by Mrigank Dhaniwala)

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** Shares of HDFC Bank HDBK.NS reverses course, last down 2.3% to 704.75 rupees

** HDBK shares had risen as much as 1.8% in morning trading, after India's largest private lender appointed Anup Bagchi as its next chief executive on Oct. 1

** However, the early positive Street reaction did not last amid concerns that it would time for the new CEO to settle in

** Bagchi would first need to rebuild the team, said Anand Dama, head BFSI analyst at Nuvama

** Over the longer term, Bagchi could bring fresh ideas and help ease governance concerns, Dama added

** Being an external candidate there could be some operational and management level changes which may be disruptive in the short-term, brokerage Prabhudas Lilladher said

** 38 of 40 brokerages rate the stock "buy" or higher, two "hold"; their median PT is 972 rupees - LSEG-compiled data

** YTD HDFC shares down 28.79% compared to about 13.7% fall in the Nifty 50 Index .NSEI

(Reporting by Aishwarya Jain in Bengaluru)

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Ujjaini Dutta

BENGALURU, Oct 2 (Reuters Breakingviews) - The $116 billion HDFC Bank HDBK.NS has taken a step towards restoring its former glory by appointing Anup Bagchi as its new CEO. The boss of Prudential-backed PRU.L ICICI Life Insurance ICIR.NS has the deep banking and financial sector experience required to lead India’s largest private lender. As an outsider, he's also well placed to draw a line under problems that have left it languishing as one of the cheapest of its peers trading at just 1.7 times forward book value. But the path ahead will still be a slog.

Bad governance had become the biggest overhang on the one-time investor darling. In March, Chair Atanu Chakraborty suddenly resigned, citing ethical differences with the bank. In July, the board fined outgoing CEO Sashidhar Jagdishan and other senior executives for "business overreach" in deposit pricing; then within three weeks a group of US-based investors filed a class-action lawsuit against the lender, alleging it failed to properly disclose information about the incident.

And so it's reassuring to see a veteran of the ICICI group, which is widely respected for its professional management, take charge. On the same day of Bagchi's appointment, Anup Kumar Saha, who spent 14 years at ICICI Bank ICBK.NS, was named CEO of the $43 billion Kotak Mahindra Bank KTKM.NS. Both Indian lenders are struggling to bed down professional leadership after decades of heavy involvement by their respective founders.

Bagchi's experience of leading the development of ICICI Bank's internet banking as well as online trading platform ought to improve HDFC's technology architecture and service culture. Yet other operational issues may take longer to fix. Its net interest margin contracted to 3.34% in the year ended March 2026 from 4.1% in 2023, more sharply than at its peers. The lender's share of low-cost deposits as a ratio of total deposits also fell to 34.1% for the full year to March 2026 compared to 44% in 2023, weighing on profitability. In comparison, ICICI Bank's latest annual figure was 41.4%.

As an incoming CEO, Bagchi will have an opportunity to reveal any further bad news hanging over the bank in one go rather than letting it drip out slowly. The turnaround of ICICI Bank offers some hope: Sandeep Bakhshi joined the bank in 2018 when it was struggling with a bad debt crisis and now it trades at 2.3 times forward book value. But one lingering question is whether the 2023 merger of HDFC with its parent, then India's largest housing finance company, has permanently altered something about the bank's agility. The new leader will soon find out.

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CONTEXT NEWS

HDFC Bank on October 1 appointed Anup Bagchi as its CEO effective October 27, 2026, following approval from the Reserve Bank of India.

Bagchi is CEO of ICICI Life Insurance, a position he has held since 2023. Prior to that, he served on ICICI Bank's board as executive director from 2017 until taking over the insurer.

Outgoing CEO Sashidhar Jagdishan’s three-year term ends on October 26. Jagdishan had decided not to seek re-appointment to the role.

(Editing by Una Galani; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on DUTTA/[email protected]))

HDFC Bank received Reserve Bank of India approval on October 1, 2026 for Anup Bagchi to serve as managing director and chief executive officer for three years from October 27, 2026, succeeding Sashidhar Jagdishan. The board appointed Bagchi as an additional director from October 2, 2026 and as MD and CEO from October 27, 2026 to October 26, 2029 on RBI-approved remuneration terms, subject to shareholder approval. Bagchi spent more than three decades with the ICICI group since 1992, serving as executive director of ICICI Bank from 2017 to 2023 and as chief executive of ICICI Securities before leading ICICI Prudential Life Insurance from June 2023. The board submitted two names to the RBI on September 12, 2026 for a three-year term ahead of Jagdishan's retirement at the close of October 26, 2026. The bank reported standalone net revenue of about Rs 1.91 lakh crore for FY26 and first-quarter FY27 profit of about Rs 19,062 crore with net interest margin of 3.26%. Deposits and advances grew 14.7% and 15.4% year on year in that quarter, with average retail deposits funding about 80% of growth.

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Sept 30 (Reuters) - HDFC Bank Limited HDBK.NS:

• APPOINTS V. N. SRIVATSAN AS CHIEF COMPLIANCE OFFICER

Source text: ID:nBSE6BzQ4C

Further company coverage: HDBK.NS

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** Shares of HDFC Bank HDBK.NS down 1.71% at 722.85 rupees

** Jefferies maintains "buy" on HDBK with a PT of 880 rupees and says clarity on the bank's next CEO could help drive a valuation rerating

** A quick management reorganisation after the CEO appointment, followed by stronger execution, could help restore earnings momentum, Jefferies says

** Brokerage says a shift in loan mix toward higher risk-adjusted segments, including SME, business banking, gold and unsecured personal loans, could support margins and ROA

** Forty analysts have a "buy" rating on avg; median PT is 976 rupees - data compiled by LSEG

** HDBK stock down ~27%, YTD

(Reporting by Urvi Dugar in Bengaluru)

(([email protected];))

Sept 24 (Reuters) - Shares of insurance distributor PB Fintech PBFI.NS, lenders and non-bank lenders with sizeable insurance distribution income fell on Thursday after India's insurance regulator proposed curbs on commissions and distribution payouts, raising concerns over earnings growth.

PB Fintech, parent of insurance distribution platform Policybazaar, and Max Financial MAXI.NS led losses among pack, plunging 10% each.

(Reporting by Kashish Tandon in Bengaluru; Editing by Mrigank Dhaniwala)

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Sept 23 (Reuters) - ** Telco Bharti Airtel BRTI.NS overtakes HDFC Bank HDBK.NS to become India's second-most valuable stock

** Reliance Industries RELI.NS remains India's most valuable co, followed by BRTI and HDBK

** BRTI valued at 11.44 trillion rupees ($119.50 billion), above HDBK's 11.42 trillion rupees ($119.29 billion), according to NSE data

** YTD, HDBK down 25% vs 13% dip in BRTI

** Private lender has faced leadership changes and governance scrutiny, including senior executive resignations and alleged irregularities

** BRTI has seen steady growth in recent quarterly earnings, boosted by increasing demand for 4G/5G data

** Both stocks rated "buy" on avg - data compiled by LSEG

** BRTI last up 0.7%, HDBK up 0.2%

($1 = 95.7300 Indian rupees)

(Reporting by Aleef Jahan in Bengaluru)

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** Top private lender HDFC Bank'S shares HDBK.NS rise as much as 1.33% to 749.3 rupees apiece, highest since Aug. 4

** HDBK's communication on strategy, funding and risks could help the bank see a real turnaround in its performance, HSBC Global Investment Research says on Monday

** Reiterates "hold" at a price target of 830 rupees, a 16.4% implied upside over last close

** Positive developments such as clarity on the CEO appointment, repo rate hikes could act as near-term catalysts, HSBC analysts say

** Meanwhile, The Economic Times Newspaper reports on Tuesday RBI has begun seeking feedback on the candidature of Anup Bagchi, currently managing director and chief executive of ICICI Prudential Life for the position of MD and CEO of HDBK

** HDBK down 25% in 2026 so far, compared to 10.4% drop in Nifty 50 .NSEI and 5.3% slide in Bank Nifty .NSEBANK

** HDBK extends gains on Tuesday, up 2% in two sessions

(Reporting by Bharath Rajeswaran in Bengaluru)

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Updates for market open

Sept 15 (Reuters) - Indian shares opened higher on Tuesday, led by information technology stocks and heavyweight HDFC Bank, although higher oil prices and global bond yields ahead of this week's Federal Reserve meeting kept gains in check.

The benchmark Nifty 50 .NSEI rose 0.45% to 23,503.65, while the BSE Sensex added 0.53% to 75,178.2, as of 9:15 a.m. IST.

Eight of the 16 major sectors rose. The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 were little changed.

IT stocks .NIFTYIT soared 4.5% after calls for a slowdown in AI development. IT stocks have been a major laggard in market over the last year as new AI tools threatened the business models of traditional software services companies.

Meanwhile, HDFC Bank HDBK.NS, the country's top private lender and a heavyweight on the benchmark Nifty, rose 3% after it sent names of two candidates to the Reserve Bank of India for the role of CEO.

(Reporting by Vivek Kumar M; Editing by Sonia Cheema)

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HDFC Bank’s board approved submitting two preferred candidates to the Reserve Bank of India for appointment as managing director and chief executive for three years, subject to approval. It approved the reappointment of V. Srinivasa Rangan as an executive director from November 23, 2026, and the appointment of Jimmy Tata as an executive director for three years from RBI approval. The bank also created a fourth whole-time-director position to strengthen oversight and succession planning across its subsidiaries. HDFC Bank’s current chief executive was due to leave on October 26, 2026.

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Sept 12 (Reuters) - India's largest private lender HDFC Bank has submitted the names of two candidates to the Reserve Bank of India for the position of managing director and chief executive officer, Bloomberg News reported on Saturday, citing an exchange filing.

(Reporting by Anusha Shah in Bengaluru. Editing by Mark Potter)

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MUMBAI, Sept 8 (Reuters) - India's HDB Financial Services HDBF.NS has accepted bids worth 20 billion rupees ($210.86 million) for the reissue of 8.05% August 8, 2029 bonds, three merchant bankers said on Tuesday.

The issuer will offer a yield of 7.9606% and had invited bids from bankers and investors earlier in the day, they said.

The company did not reply to a Reuters email seeking comment.

Here is the list of deals reported so far on September 8:

*Size includes base plus greenshoe for some issues

($1 = 94.8500 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Janane Venkatraman)

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MUMBAI, Sept 7 (Reuters) - India's HDB Financial Services HDBF.NS plans to raise 20 billion rupees ($211.82 million), including a greenshoe option of 10 billion rupees, through the reissue of 8.05% August 8, 2029 bonds, three merchant bankers said on Monday.

The issuer has invited bids from bankers and investors on Tuesday.

The company did not reply to a Reuters email seeking comment.

Here is the list of deals reported so far on September 7:

*Size includes base plus greenshoe for some issues

($1 = 94.4200 Indian rupees)

(Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Sonia Cheema)

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, Aug 31 (Reuters Breakingviews) - India's largest private bank by assets has a chance to restore some lost credibility. HDFC Bank HDBK.NS CEO Sashidhar Jagdishan on Saturday unexpectedly ruled out staying for a third three-year term at the helm once his current tenure ends in October. As the $115 billion lender's governance woes start to look persistent, his departure gives its board a chance to bring in an outsider to shake things up.

HDFC has been in the wars of late. In March, Chair Atanu Chakraborty suddenly resigned, citing ethical differences with the bank. Last month, the board fined Jagdishan and other senior executives for "business overreach" in deposit pricing; within three weeks a group of U.S.-based investors filed a class-action lawsuit against the lender, alleging it failed to properly disclose information about the incident.

These challenges had weakened Jagdishan's chances of staying on, as it was not clear he'd get the nod from the central bank, which has an effective veto over bank CEO appointments. They certainly overshadowed his achievements. A long-time insider, 61-year-old Jagdishan prioritised improvements to HDFC's technology and customer service; oversaw the merger of HDFC Bank with its mortgage-lender parent, which involved layers of employee integration and a complex realignment of assets and liabilities; and he upgraded the bank's digital capabilities enough to reverse crippling business curbs imposed by the central bank months after he took charge.

Yet internal problems and thinning net interest margins have taken their toll: the stock has fallen 27% from its high at the end of last year, reducing the bank's annualised total return during Jagdishan's tenure to just 4.5%, a quarter of the Nifty Bank index.

After more than 30 years of insiders running the shop, hiring the next CEO from outside the lender's executive ranks makes sense. Amitabh Chaudhry, who leads $41 billion Axis Bank AXBK.NS and has presided over an asset-quality turnaround and an acquisition of Citi's local consumer business, would be a strong contender. As would Bajaj Finance BJFN.NS Vice Chair Rajeev Jain, whose experience building scale would suit HDFC's needs, too.

The bank might suggest Deputy Managing Director Kaizad Bharucha and an external candidate for the central bank to consider, Reuters reported, citing sources. Between the two choices, the lender stands to gain less from the continuity an insider would bring than from the needed shake-up an external appointment might be more willing to instigate.

Follow Shritama Bose on LinkedIn and X.

CONTEXT NEWS

HDFC Bank is likely to name Deputy Managing Director Kaizad Bharucha as one of two options for its next CEO after incumbent Sashidhar Jagdishan retires at the end of his second term in October, Reuters reported on August 30, citing two unnamed people familiar with the matter.

The bank on August 29 said Jagdishan had decided not to seek re-appointment to the role. His second three-year term ends on October 26. "The Board decided to fast-track the process for selection and appointment of his successor well within time," HDFC said in a filing.

(Editing by Antony Currie; Production by Ujjaini Dutta)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))

HDFC Bank's managing director and chief executive, Sashidhar Jagdishan, said he would not seek reappointment and was due to retire at the close of business on October 26, 2026. The board recorded his decision after he reiterated it despite persuasion and said it would fast-track the selection of a successor. Rajiv Kumar became the bank's RBI-approved part-time chairman in July 2026. HDFC Bank reported standalone net revenue of ₹463.6 billion and net profit of ₹190.6 billion for the June quarter, with a capital adequacy ratio of 19.6%.

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Aug 29 (Reuters) - India's largest private lender HDFC Bank HDBK.NS on Saturday said that its Chief Executive Sashidhar Jagdishan has decided not to seek reappointment when his term ends at the end of October.

(Reporting by Preetika Parashuraman in Bengaluru)

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** India's HDFC Bank HDBK.NS falls as much as 1.4% to 717.1 rupees

** Set for third straight session of losses

** Lender and its two senior executives face securities class action lawsuit in U.S. for allegedly making illegal payments worth $4.7 million to road development corporation of the western state ​of Maharashtra to draw large deposits

** Stock top drag on benchmark Nifty 50 .NSEI index, which is down 0.1%

** "The problems for the lender are multifold," says G Chokkalingam, founder and head of research at Equinomics Research, adding that lack of consistent industry-beating credit growth also weighing on stock

** In contrast to HDBK's drop, peers Axis Bank AXBK.NS, ICICI Bank ICBK.NS, and Kotak Mahindra Bank KTKM.NS up 0.5% to 2%

** YTD, HDBK down 27.4%, set for its biggest yearly drop since 2008 financial crisis

** Stock rated "Strong Buy" on average by 39 brokerage firms, median PT at 1,017.5 rupees, per data compiled by LSEG

(Reporting by Vivek Kumar M)

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By Dharamraj Dhutia

MUMBAI, Aug 21 (Reuters) - HDFC Bank HDBK.NS raised $1.75 billion through a dual-tranche dollar bond sale, the largest one-shot debt fundraising by an Indian bank, three merchant bankers said on Friday, as banks scramble to take advantage of a concessional window from the central bank.

India's largest private lender on Thursday raised $1.25 billion through the sale of five-year papers, equivalent to the largest single-tranche issuance, and $500 million through three-year papers via its GIFT City branch, it said in a notice to stock exchanges.

Having raised an aggregate $2.50 billion, HDFC has now topped the chart of banks that have raised money through dollar bond sales since June, when the Reserve Bank of India facility was opened. ICICI Bank ICBK.NS came in second with $2.05 billion.

The issues attracted bids of about $7 billion of orders, which was far higher than what the bank expected, encouraging it to accept a larger amount, said a banker.

The three-year papers were priced at 88 basis points over comparable U.S. Treasuries, while the five-year papers were 100 bps over. Both were tighter than the initial guidance of 120 bps and 130 bps, respectively, showing strong investor demand.

The spread was, however, higher than the 90 bps HDFC paid for a five-year issue for $750 million in June.

The bankers who spoke to Reuters for this story requested anonymity as they are not authorised to speak to the media.

Market intelligence firm CreditSights, which has an "outperform" rating on HDFC, had expected the final pricing at a spread of 95 bps and 105 bps for the three-year and five-year papers. It, however, sees the fair value at a spread of 82 bps and 92 bps.

In the last few days, banks have been scrambling to complete their dollar issuances, with most funds being used to provide leverage to customers who will be depositing funds under the discounted dollar deposit scheme.

The RBI last week said that the window provided to banks for hedging non-resident deposits would end a month early on August 31. The central bank expects close to $80 billion in inflows through these schemes.

(Reporting by Dharamraj Dhutia; additional reporting by Khushi Malhotra; Editing by Harikrishnan Nair)

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Aug 20 (Reuters) - HDFC Bank Limited HDBK.NS:

• HDFC BANK - COMPLETES ISSUE OF US$ 1.75 BILLION SENIOR UNSECURED BONDS

Source text: ID:nBSE2D8fV1

Further company coverage: HDBK.NS

(([email protected];))

The Reserve Bank of India approved Life Insurance Corporation of India's application to acquire an aggregate holding of up to 9.99% in HDFC Bank. LIC held 4.11% of the bank's paid-up share capital as of 14 August 2026. The approval was subject to banking, foreign-exchange, securities-market and other applicable regulatory requirements. HDFC Bank reported deposits of ₹31,708bn and gross advances of ₹30,608bn in the first quarter of FY27.

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Aug 19 (Reuters) - HDFC Bank Limited HDBK.NS:

• HDFC BANK - RBI APPROVES LIC TO BUY UP TO 9.99% IN HDFC BANK

Source text: ID:nBSE98Kh9x

Further company coverage: HDBK.NS

(([email protected];))

By Dharamraj Dhutia and Khushi Malhotra

MUMBAI, Aug 17 (Reuters) - Indian lenders are rushing dollar loan and bond issues over the next two weeks after the central bank unexpectedly advanced the end date for an FX swap facility that banks were using for hedging exposure to deposits raised from diaspora.

As part of a raft of measures to boost inflows, lenders were permitted to use these overseas borrowings to offer loans to non-resident Indians. Banks' overseas fundraising had also been subsidised.

Now, with the Reserve Bank of India announcing the closure of the forex swap window for August 31, a month earlier than initially planned, Indian private and state-run banks are on track to raise at least $5 billion through a combination of bonds and loans, four bankers said.

"Some of the fund raising plans have been brought forward to utilize the last few days," Akshay Naik, India head of debt capital markets at Citi, said.

"We will have one of the busiest windows for the next 6-8 days from India. Few institutions who are not ready may need to drop their plan if it was solely meant for FCNR leverage."

Large private-sector lenders such as ICICI Bank ICBK.NS and HDFC Bank HDBK.NS are in talks to raise about $1.5 billion each via dollar bonds and loans, while peers including Axis Bank AXBK.NS, YES Bank YESB.NS, RBL Bank RATB.NS and Kotak Mahindra Bank KTKM.NS are planning to raise at least $500 million each through overseas debt markets, bankers said.

State-run lenders State Bank of India SBI.NS, Bank of Baroda BOB.NS, Punjab National Bank PNBK.NS, Canara Bank CNBK.NS, Union Bank of India UNBK.NS, Bank of India BOI.NS and Central Bank of India CBI.NS are targeting dollar raises of $250 million to $500 million each, with the larger banks likely to target bigger issues, the bankers said.

None of the lenders replied to Reuters emails seeking comment.

All the bankers declined to be named as the discussions are private.

BANKS ON TRACK FOR RECORD DOLLAR FUNDRAISING

Indian lenders have raised a combined $5.93 billion through dollar bond sales and loans so far this year, according to LSEG data through August 11.

The tally has climbed by another $1.2 billion, following debt sales by two large state-run lenders last week.

Over the last 15 years, banks' annual foreign borrowing topped $6 billion on three occasions, including in 2013, when the RBI had opened a swap window.

"Would expect $5-7 billion of additional bond and loan issuances for the remainder of year," Naik said.

(Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Mrigank Dhaniwala)

(([email protected]; [email protected]))

By Dharamraj Dhutia

MUMBAI, Aug 12 (Reuters) - State Bank of India SBI.NS, the country's largest lender, drew strong demand in its return to the public dollar bond market after nearly a year, with pricing tightening sharply from initial guidance, three merchant bankers said on Wednesday.

SBI raised $500 million through a five-year dollar bond issued via its London branch, the lender said in a stock exchange filing late on Tuesday.

These bonds will be priced at a spread of 88 basis points over U.S. Treasuries, sharply below initial guidance of 120 bps. The notes carry a coupon of 5.25%, payable semi-annually.

The final spread was broadly in line with CreditSights' expectation of 90 basis points, although the research firm expects it to tighten further to around 80 basis points in the secondary market.

Spreads on dollar bonds issued by Indian borrowers have widened in recent weeks on expectations of heavy supply following the Reserve Bank of India's swap concession window, while demand has been tempered by attractive rates on foreign-currency deposits.

"As we had anticipated, some of this spread premium has begun to fade as supply is absorbed... We have an outperform recommendation on SBI," CreditSights analysts said in a note.

The lender witnessed tightest pricing, after ICICI Bank sold notes at 100 bps, while HDFC Bank sold notes at a spread of 90 bps over Treasuries.

SBI had planned to raise $1 billion through a public dollar bond issue in June, but deferred the sale due to higher borrowing costs following heavy issuance by Indian lenders.

The bank subsequently raised $600 million through a private placement of three-year dollar bonds at a spread of 100 basis points over the Secured Overnight Financing Rate (SOFR).

The issue comes at a time when Indian banks are making a beeline for dollar issues after the RBI's swap facility announced in June made overseas borrowing cheaper.

Large private lenders, including HDFC Bank, Axis Bank and ICICI Bank have raised funds through dollar bonds in June and July.

Meanwhile, bankers expect SBI to tap the market again in a few weeks for raising dollars, as the board has approved raising of up to $2 billion through bonds sold in dollar or any other major currency in this financial year.

(Reporting by Dharamraj Dhutia; Editing by Sherry Jacob-Phillips)

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, Aug 11 (Reuters Breakingviews) - That Indian banks would sport higher book value multiples than their Western peers used to be almost as reliable as the sun coming up in the morning. Even after a lending crisis last decade, the country retained the lead, with $118 billion HDFC Bank HDBK.NS often at the front. Not any longer. A resurgence of players like HSBC HSBA.L and JPMorgan JPM.N as well as the rise of India’s capital markets have both landed blows on the sector. In HDFC’s case, its own governance and margin woes have completed a triple whammy.

The Mumbai-based bank run by Sashidhar Jagdishan currently trades at less than 2 times its estimated book value 12 months from now, per LSEG data. A few years ago, most developed-market peers could only dream of such a level. Now, thanks to resurgent earnings and, in the U.S. at least, a regulatory proposal to cut capital requirements, they sport book multiples most have not worn since the 2008 financial crisis. JPMorgan’s, for example, is now at 2.5 times; the new king of the metric is $206 billion Commonwealth Bank of Australia CBA.AX at 3.7 times.

Meanwhile, many Indian banks are struggling to hoover up low-cost deposits as savers look for higher yields in the stock market. That’s hurting net interest margins, with HDFC’s and Axis Bank's expected to fall again this financial year, per estimates collated by Visible Alpha. Industry-wide bank deposits dropped to around one-third of household financial savings in the 13 years to the end of March 2025, while equity and mutual funds grew sevenfold to over 15%, government data show.

HDFC, though, has also shot itself in the foot. In 2020 the Reserve Bank of India barred it from issuing new credit cards after recurring online shutdowns. A 2023 merger with its mortgage-lender parent failed to live up to its promise. In March its chair resigned citing ethical differences with management. Last month the board fined top executives including Jagdishan for improprieties in deposit pricing while exonerating their actions as "business overreach". The successive crises reflect poorly on Aditya Puri, HDFC's Managing Director and CEO from its inception in 1994 until 2020.

It’s not alone. The $41 billion Kotak Mahindra Bank KTKM.NS trades at 2.5 times forward book value that’s half its 2019 peak, having been beset by a poorly handled leadership transition and business restrictions akin to HDFC's.

Lifting those curbs has done little for either firm’s valuation. Not all the country’s lenders are suffering from valuation blues: $107 billion ICICI Bank ICBK.NS has undergone a successful turnaround and trades at nearly 3 times book. But HDFC’s path back to the top has too many obstacles.

Follow Shritama Bose on LinkedIn and X.

CONTEXT NEWS

HDFC Bank on July 27 said it would issue warning letters and impose a penalty of 100,000 ​rupees ($1,045.51) each on CEO Sashidhar Jagdishan, its chief financial officer ​and its head of retail assets for their role in offering preferential deposit rates to a state agency.

The bank's board concluded that its executives involved in setting deposit rates for the agency ​had engaged in business overreach, rather than acting for ‌personal gain.

(Editing by Antony Currie; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))