EXECUTIVE SUMMARY. The phenomenal success of HDFC Bank under the stewardship of Aditya Puri, its first CEO, had some unfortunate consequences. It led to a belief that the recipe for achieving a premium valuation was to employ larger-than-life Alpha leaders who promoted an aggressive work culture, imposed long working...
EXECUTIVE SUMMARY. Although ICICI Bank reported a strong performance in 3QFY20, the market has ignored the increase in the deferred tax asset (DTA) which inflated the net profit by Rs 2 bn. It would have been more prudent for the bank to continue with its earlier practice in 1QFY20...
Toxic work culture is rife in the Indian financial sector and it is rare for senior executive management to acknowledge abusive behaviour by managers. It was therefore a surprise when Sashidhar Jagdishan, the Chief Executive Officer (CEO), HDFC Bank publicly acknowledged it in the bank’s FY2023 annual report by...
EXECUTIVE SUMMARY. In a bizarre episode which raises critical questions regarding basic norms of corporate governance, Sandeep Parekh, independent director of HDFC Bank, took to Twitter to publicly comment on the succession issue of the HDFC Bank CEO. Parekh, a corporate lawyer and former Securities and Exchange Board of...
EXECUTIVE SUMMARY.
Problem: You are a leading
sell-side analyst. What do you do when confronted with valuable, authoritative,
and hitherto confidential information about India’s leading banks?
A. Highlight it.
B. Analyse it and publish a research report on it.
C. Pretend it doesn’t exist.
The correct answer, of
course, is C. Pink...
EXECUTIVE SUMMARY. To address the woeful state of corporate governance in India’s banking sector, especially in the much fancied and widely covered private sector (in which foreign institutional investors are heavily invested), the Reserve Bank of India (RBI) released a discussion paper on ‘Governance in Commercial Banks in India.”...
EXECUTIVE SUMMARY. The near-absence of a government stimulus to revive the Indian economy from the Covid-19 meltdown portends a severe and prolonged economic slowdown. This will squarely hit the banking industry with huge credit costs and low growth. In such a dismal scenario, the only lever available to the...
Axis Bank is back in the spotlight for rewarding senior management for a disastrous performance. It was a year in which profits and profitability collapsed with the souring of corporate loans, the regulator penalised the bank for fudged accounts, the share price stagnated and no dividend was declared. Yet...
EXECUTIVE SUMMARY. The toxicity in Axis Bank’s work culture which this analyst has been highlighting (here and here) was recently confirmed by Ravi Narayanan, Group Executive - in-charge of retail liabilities, branch banking and products. As disclosed by ‘Madanlal Dahariya’, a pseudonym used by a bank whistle-blower on Twitter,...
