HDFC Bank's CEO and a deputy are leaving just as its margin is said to have bottomed

The chief executive and a deputy are both leaving

HDFC Bank's chief executive, Sashidhar Jagdishan, used the results call to say he is leaving, and introduced a successor whom the transcript names only as Anup. Anup asked to be addressed by a title the transcript renders as 'MDS' and said he would soon present a view on growth, margins, quality and productivity; Jagdishan told analysts to expect that in about a month. At the close Jagdishan added that deputy managing director Kaizad Bharucha had asked for early retirement by the end of December. On the call, neither departure came with a stated reason (the CEO said an exchange notification on Kaizad had just gone out; we do not hold it), and the CEO's came with no effective date.

Both announcements run against earlier statements. In March, a day after the chairman resigned, the bank said the CEO's reappointment would be taken up in due course and that nothing changed after the chairman's exit, and Jagdishan said Kaizad would stay for three years. In July management called the reappointment work in progress. This call confirms the CEO is leaving, and on the call there was no account of how the reappointment ended.

Margin said to be at its low, with several tailwinds named

An analyst put the bank's net interest margin, its net interest income as a share of the assets that earn interest, at 3.32%, and the chief financial officer did not dispute it. That is under the 3.4% to 3.5% band the bank described in April 2025, if both are measured the same way; basis not stated on the call. Asked why the cost of funds looked higher, the CFO said it was flat at about 4.4%: most of the quarter's deposit increase came as time deposits, including FCNR (foreign-currency) deposits, which offset the gain from repricing older ones. Interest expense in the filed results rose 6.4% on the quarter before.

In October 2025 management expected deposit repricing to give a tailwind over the next six to twelve months. This time management's stated tailwinds are the 25 basis point repo rise in October (about 70% of loans float, and the CFO expects the rise to be largely reflected by December), back-book repricing in retail across the next two quarters, and a mix shift to retail and MSME loans; the full-quarter cost of the FCNR deposits is the offset.

The two executives put it with different strength. The CFO agreed this is the bottom and declined to give a number: "So net of that, we still think that there can be neutral to positive on the margin as we go forward." The CEO went further: "The trajectory will be upward from the next quarter onwards."

Profit growth trails the balance sheet

Net profit rose 5.8% on a year earlier in the September 2026 quarter, while total assets grew 14.4%. In July the CFO said that in the longer term profit growth should be at or above balance-sheet growth. Because the wording is longer term, the gap is not a miss. Sales less interest expense, a rough proxy for spread income that is not the bank's own net interest income, also grew more slowly than assets, calculated from the filed figures.

The CEO quoted profit growth excluding trading gains, a measure that cannot be compared directly with the filed figure. The CEO said total AUM growth of 15.3% includes 1.9 points from FCNR leverage.

Liquidity and deposit strategy go to the incoming head

The liquidity coverage ratio compares a bank's high-quality liquid assets with its expected short-term outflows. An analyst put the bank's at 113% and asked whether it limits lending; the CFO said the bank runs in a range it sets itself, and agreed that it must treat a level around there as a floor in order to lend more. Deposits and loans rose by almost the same amount in the quarter, which the CFO called largely matched. About 4 points of reported deposit growth came from the FCNR window. The CFO added that "a low LCR does not mean low liquidity".

The CFO said a strategy on deposit momentum and the balance-sheet changes needed to keep the ratio healthy would come over the next couple of quarters, and the CEO mentioned some non-deposit strategies in the restructuring; questions on deposit strategy were passed to Anup. Asset quality was steady: the gross NPA ratio was 1.11%, 13 basis points lower than a year earlier, and credit cost 44 basis points. Anup's presentation to analysts is due in about a month, and Kaizad Bharucha, who answered the loan-book questions on this call, has asked to retire by the end of December.