Private sector banks likely to continue their hiring spree in FY24

ICICI, HDFC Bank added over 50,000 employees in FY23

Private sector banks are on a hiring spree on the back of a revival in business growth and branch expansion — a trend that is likely to continue in the current financial year (2023-24, or FY24).

The two top private banks in the country added over 50,000 in employee headcount in 2022-23 (FY23).

HDFC Bank — the largest private sector lender in the country — onboarded 31,643 employees in FY23. ICICI Bank added 23,200 employees during the period.

HDFC Bank and ICICI Bank also added branches rapidly, with the former having added 1,500 and the latter 500 in FY23.

Smaller lenders were not far behind either.

Erstwhile Catholic Syrian Bank, now known as CSB Bank, grew its staff strength by 46 per cent in FY23.

According to the bank’s Managing Director and Chief Executive Officer Pralay Mondal, the bank added more than 2,100 people during the year and is expected to hire almost a similar number in FY24 as well.

“Our manpower growth has been nearly 46 per cent, from 4,650 to 6,800 in FY23. In product, technology, and branches, we are investing heavily and this needs more manpower as well,” he said.

One of the major reasons for CSB Bank to increase staff strength was its strategy to expand and look beyond portfolios like gold loans. It added 100 branches during the year, of which over 50 per cent was in North India — still not its stronghold.

At present, gold contributes to about 45 per cent of its advance mix, up from 39 per cent at the end of 2021-22. The strategy is to increase the share of other segments by the year 2030, taking the share of gold to 20 per cent, retail to 30 per cent, small and medium enterprises to 20 per cent, and the rest to 30 per cent.

The bank’s staff cost increased by 16 per cent during the year — from Rs 482 crore in the year that ended in March 2022 to Rs 558 crore by March 2023. This, according to Mondal, was mainly because a large chunk of it happened in front-end sales and service for customer acquisition, where the cost is less.

Commenting on ICICI Bank’s hiring momentum, its Executive Director Sandeep Batra said, “There is huge spending on technology, which continues to take place. We added about 23,200 employees in 12 months and today, the total employee base is about 129,000.”

For ICICI Bank, employee expenses increased 25 per cent in FY23.

ICICI Bank increased the number of branches by 9 per cent — from 5,418 in March 2022 to 5,900 in March 2023, while the number of automated teller machines (ATMs) was seen up 4 per cent to 13,626. 

The number of employees of HDFC Bank increased to 173,222 on March 31, 2023, against 141,579 as of March 31 last year. A major reason for this was the increase in the number of branches and ATMs, which increased by 23 per cent and 9 per cent, respectively.

When asked whether the bank would continue with branch expansion and employee addition this year as well, Srinivasan Vaidyanathan, chief financial officer, HDFC Bank, said in an earnings call, “As of now, the approach is to continue with that, but subject to evaluation every quarter, the trajectory we are continuing on is indeed the trajectory that is yielding the results we planned for.”

As of March 2023, HDFC Bank had 7,821 branches and 19,727 ATMs or cash deposit-cash withdrawal machines (CDM-CWM) across 3,811 cities, against 6,342 branches and 18,130 ATMs/CDM-CWM across 3,188 cities a year ago.

HDFC Bank’s employee cost in FY23 increased 29 per cent to Rs 15,512.36 crore, compared with Rs 12,031.69 crore a year ago.