InvestorQ : What is it that made Aditya Puri a very successful bank CEO and why did he make such a big difference to HDFC Bank?
swati Bakhda made post

What is it that made Aditya Puri a very successful bank CEO and why did he make such a big difference to HDFC Bank?

Sam Eswaran answered.
2 months ago

Under Aditya Puri, HDFC Bank had emerged over the years as the largest private sector bank and the most valuable and profitable bank in India. In the last few years it has overtaken ICICI Bank by a big margin and now there is only SBI left to content with in terms of size.

Puri is often ascribes the success of HDFC Bank to the team but to a large extent the bank has is very own personal stamp on its operations and functioning. Puri managed to build the bank on a core philosophy or you can a set of core philosophies.

For example, HDFC Bank never chased volumes and aggressive growth at the cost of margins, unlike other banks like ICICI Bank or Axis Bank. That substantially explains why they had to wait for a long time for the big thrust. Their aggression actually started after 2012.

Don’t forget that asset quality was first and foremost for the bank and Puri was very particular about that culture. The outcome is evident from the 1.3% gross NPAs of HDFC Bank. IT was achieved through was a combination of credit assessment, close evaluation, aggressive collection and continuous market intelligence.

In a way, one more factor that made Puri successful was that Puri was pugnacious and feet on street. It is well known that in the early days, Puri would personally visit each potential customer. Even later, he never gave up the opportunity to sit with customers at their work places and chat about business.

Puri was prophetic enough to tell colleagues that the real story of Indian banks would reveal itself only when customers started to default. That is exactly what happened with the corporate books post 2012 and that was when the bank rapidly built its value proposition.

Consider a few surprising statistics. HDFC Bank earns more profits than all the PSU banks put together and its market cap is also more than all the PSU banks combined. HDFC Bank is today valued at 4.5 times Deutsche Bank of Germany. That sums up the story.