HDFC Bank trims workforce by 11,000 in 9 months

The staff count remained flat from the March quarter at around 84,000 employees. This is the third straight quarter when it has not seen a surge in hiring.

HDFC Bank, country’s highest valued bank and second largest private lender by asset size, has reduced its staff by over 11,000 in nine months as it freezes fresh hiring to increase efficiency amid digital growth and slower branch expansion.

The staff count remained flat from the March quarter at around 84,000 employees. This is the third straight quarter when it has not seen a surge in hiring.

“We would have roughly 84,000 employees. And on a net basis, it (the hiring) would be flat growth,” said Paresh Sukthankar, Deputy Managing Director of HDFC Bank.

As on September 30, 2016, HDFC Bank’s staff strength was 95,002.

The bank’s headcount had fallen by 6,096, or 7 percent, to 84,325 in the quarter ended March 2017 from 90,421 in December 2016. This reduction was the highest in a quarter and at least 33 percent more than the 4,581 people the bank lost in the quarter ended December 2016. Sukthankar said in a post first quarter results interaction on Monday, ”

This quarter, we have more or less flat growth in the employee base that we had in March. That does not mean we don’t continue to have various initiatives to help us improve productivity and change processes to make things more efficient. We are also seeing business growth, wherever there are efficiency gains thrown up, we will be able to redeploy people there, especially in the semi-urban or rural areas.”

However, this has not affected the bank’s profitability as it reported a 20 percent rise in net profit for the first quarter FY18 from April to June this year with a 20 percent rise in net interest income and 21 percent growth in net revenues.

Although the employee cost also marginally inched up 4 percent for the bank, its cost-to-income ratio for the quarter declined to 42.7 percent as against 46.2 percent for the corresponding quarter ended June 30, 2016.

Sukthankar also added the credit growth for the system was not as expected and hence, the bank plans to grow in its core business areas and increase market share.

With the rise in digital transactions giving certain cost efficiencies to the bank linked to the digital channel, the bank has not replaced the staff which has moved out due to attrition.

Moreover, the bank’s branch network growth also slowed with a net increase of 12 branches to 4727 as on June end from 4715 in March end thus year.

On the other hand, number of ATMs declined to 12,220 from 12660 three months ago.

Sukthankar said the ATM usage has reduced with growing digital banking usage reflecting the slowdown in ATM expansion.

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