Aditya Puri is decidedly old-fashioned. The 59-year-old managing director of HDFC Bank doesn’t bombard his executives with early-morning e-mails or text messages for a simple reason: He doesn’t use a laptop or a mobile phone. (His secretary types his e-mails faster than he can, he says.) That makes him a rarity among India’s plugged-in CEOs.
Puri also takes an old-fashioned approach to banking. Since launching HDFC Bank in 1994 on behalf of its controlling shareholder, mortgage lender Housing Development Finance Corp., Puri has built it into India’s third-largest bank by market capitalization, behind State Bank of India and ICICI Bank, while adhering to disciplined lending standards. “For a long time we have been called conservative, and then in 2008 and 2009 we were called heroes,” he says. “But for us nothing has changed.” HDFC Bank’s lending growth trailed well behind that of ICICI in the precrisis years, but Puri’s steady approach helped HDFC’s assets grow by 21.4 percent in the 12 months ended March 31, to 2.2 trillion rupees ($46.8 billion), even as ICICI’s assets shrank by 4.2 percent, to 3.6 trillion rupees.
“We do not want to grow any faster than what the GDP growth rate can support, as we don’t want to take higher risks,” says Puri. This being India, though, that leaves plenty of room for expansion. The economy is expected to grow by nearly 9 percent this year, up from 5.7 percent in 2009. Credit increases at roughly three times the pace of GDP, and Puri aims to grow a couple of percentage points faster than the market pace.
He has been doing just that for 16 years. The son of an Indian Air Force officer and an accountant by training, Puri spent 18 years at Citibank, rising to become CEO of its Malaysian subsidiary before HDFC tapped him to run its new bank in 1994. Puri believed that, by combining the technology, products and service levels of a foreign bank with an established Indian brand, “we had a good chance of being successful.”
Today the bank boasts 3 percent of the Indian market for both loans and deposits, trailing only ICICI Bank among private sector lenders, with nearly two thirds of its loans extended to retail customers. The bank has 1,725 branches, compared with ICICI’s 2,000.
Although HDFC Bank has focused on the urban middle class until now, the CEO believes that rural India provides some of the best opportunities for growth. The country has 400 million people living below the poverty line, according to one recent estimate, but social programs aimed at bridging the wealth gap and increased spending on roads and power generation in rural areas should bring “50 to 75 million people into the mainstream every year or two,” he contends. “That’s a completely new market.”
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