HDFC Bank under Aditya Puri: From a start-up to an industry leader

HDFC Bank, under Aditya Puri, has been one of the biggest success stories of India Inc in the past two decades. He transformed a start-up in a sector dominated by state-owned banks into an industry leader

 At nearly Rs 6 trillion, HDFC Bank leads the industry in terms of market capitalisation and remains the most profitable by a long margin. It accounts for nearly 8% of the combined m-cap of all Sensex firms, up from 2% on the eve of 2008 global financial crisis.

HDFC Bank is credited with establishing retail lending and salary accounts in the country. Revenues from retail banking accounts for half of the bank’s revenues and enabled it to grow even in a tough economic environment.

The model proved so successful that most of its rivals are following it aggres­sively. However, Puri’s biggest success has been to achieve steady growth over the long-term without sacrificing profitability and accumu­lating bad loans. The bank’s bad loan net of provisions has been under 0.5% of its assets for a decade now, despite a 10x jump in its assets and 8x in its net interest income.

As Puri retired on Monday, his successors might find it tough to emulate his considerable succe­sses. Even rival ICICI Bank thanked Puri for being an inspiration.