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Aditya Puri: The driving force behind HDFC Bank


Aditya Puri built HDFC Bank into not only one of the best banks in India, but also one of the finest companies in Asia. Here’s how he did it.

Aditya Puri - HDFC Bank
Image: Vikas Khot. Aditya Puri, MD of HDFC Bank, is the only leader that the Mumbai-based bank has ever had

Aditya Puri, managing director of India’s most valuable bank—HDFC Bank—relies on two simple traits for staying on top: Common sense and discipline. You determine what you have to do and you stick to it, he says. “Banking is not very complicated, and you need to keep it that way.”

The results are there to see: A $43 billion market capitalisation, nearly 32 million customers and a network spanning more than 4,000 branches in almost 2,500 towns and cities. “We have no stress on our portfolio, healthy margins, a distribution network that’s spread across the length and breadth of the country, cutting-edge technology—and enough capital,” declares Puri.

He has a right to brag. He built HDFC Bank from scratch into the second-largest bank in India’s private sector, after ICICI Bank. After 21 years in charge, he’s the longest-serving chief of a non-state-owned bank and also the highest paid, at $1.2 million for the latest fiscal year. He gets paid for performance: In the year ended March 31, revenue tallied $9.8 billion, up 17 percent from the previous year, while net profits rose by 21 percent to $1.7 billion. This record puts the bank on our Fab 50 list of Asia-Pacific’s best big publicly traded companies for the ninth time—making it the only company to make the list that many times since we began compiling this roster of corporate stars in 2005.

Puri sees more growth ahead under the Narendra Modi-led government, which took charge in May 2014. “India in the medium to long term is an excellent growth story,” he says. “Whether it grows at 7 percent or 8 percent or 9 percent, the platform is in place, and the new government is working on various initiatives.”

Right now the economy could use a push. In fiscal 2015, credit growth was only 9 percent—down from 14 percent the previous year. “In the short term, the major challenge is to grow,” says Jignesh Shial, banking analyst at Mumbai’s Quant Capital.
“There’s no question that there is a slowdown—consumption is lower, and there’s a slowdown in the rural economy. Even the real estate and auto sectors are not that great.” But while consumer sentiment is still low, the economy is starting to look up. “With the deficit under control, government spending on infrastructure is picking up and stalled projects are getting off the ground,” says Sunil Kumar Sinha, principal economist at India Ratings & Research, a credit rating and research agency in Mumbai. “Things are certainly improving, but it will be more of a gradual recovery.”

This growth eventually will flow to banks. And while the Modi government has not announced any big-bang banking reforms, it has told state-run banks—which make up more than 70 percent of the market—that it will give them more capital only after certain goals are met, such as keeping bad loans under control or meeting targets on return on assets. Analysts say this will allow well-run and well-capitalised private banks such as HDFC Bank to expand their market share because many state-run banks are struggling with non-performing assets.

Puri, 64, is the only leader that Mumbai-based HDFC Bank has ever had. Mortgage giant Housing Development Finance Corporation started it in 1994 at a time when private sector banks were just opening up in India. It recruited Puri—who was chief executive of Citibank Malaysia after nearly two decades with Citibank across India, Greece, Saudi Arabia and Southeast Asia—to run the show.