Brushing aside apprehensions about the merger of HDFC Bank and HDFC, managing director and chief executive officer Sashidhar Jagdishan on Friday said the stability of metrics shows that the underlying resiliency of the two institutions remains intact. Addressing the annual general meeting, he said the lender will bring down the credit-deposit ratio by curbing the credit growth.

“We came out with certain key metrics on Day 1 (post merger), which is July 1, 2023. Over the last 12 months, we have maintained a stability in the metrics which means that the underlying resiliency of the two institutions is intact,” said Jagdishan.

He said it is in the bank’s interest to ensure that the deposit growth is greater than the credit growth even if it means that for a period of time the bank has to slow down the credit growth and bring down the credit-deposit ratio. “It is in our interest to do it (bring down the CD ratio) as quickly as possible because after reaching a certain level we can enjoy the benefits of the cycle moving back upwards at an that appropriate time.”

Jagdishan said HDFC Bank is a long-term player in the country’s economy and is currently undergoing the period of adjustment.

“We are not in the shorter end of the spectrum, this is an institution which is going to be a long play in the Indian economy. We have medium-to-long-term strategy,” he said. “We are on right the path as we are building this new organisation and navigating through this new macro environment.”

On expansion, Jagdishan said the bank will continue to open branches as the country is still underpenetrated in terms of distribution of financial services. “We are not just an urban bank, we also cater to customers in rural and urban areas. Branches are great engagement platforms and there is a lot of opportunity to grow.”  

Commenting about non-performing assets, he said the asset quality of HDFC Bank is among the best. The high attrition is an industry-wide phenomenon and the attrition rate of the bank has come down to 27% this year from 34% last year, Jagdishan added.

In his message, HDFC Bank chairman Atanu Chakraborty said the successful execution of the merger has significantly enhanced the bank’s ability to serve its existing customers, acquire new customers and offer a wider spectrum of financial services.

“This merger remains among the largest in the history of corporate India and among the most complex in the financial services sector in the country. The merger has strengthened the bank’s pathways for future growth,” said Chakraborty, adding that the bank remains steadfast in its commitment to enhance total shareholder returns.