Rama Krishna Sangem
After an impressive Q4FY24 performance, HDFC Bank announced an ex-gratia payment of around Rs 1,500 crore to its staff. The bank’s decision came as a gesture of appreciation for the employees’ dedication during the merger with HDFC Ltd as well as address attrition, said Sashidhar Jagdishan, the managing director & chief executive of the largest private sector lender.
HDFC which announced its January-March earnings on Saturday, reported a 37.1 per cent growth in net profit, boosted by a one-time gain from selling a majority stake in HDFC Credila – an education loan company. At the same time, the bank decided to make floating provisions to Rs 10,900 crore, which nullified the impact of the stake sale gain
“There was a lot of hard work that happened in the run-up to the merger and subsequent to that on a much larger balance sheet and led by a complex and adverse liquidity situation in the system. I think the team has rallied to adjust to the new norms; they worked hard after being battered from all fronts at the ground level,” Jagdishan said during an analyst call.
“In the last couple of years, we have had heightened attrition as well. We endeavour to ensure that our large ground workforce, which is 90 per cent of our total manpower, is motivated and this is a way of trying to say thank you to them,” he said.
Jagdishan clarified that such expenses are not recurring in nature. “This is a one-time ex-gratia that we have provided for, and why not, we have a one-off gain and a nice way to motivate the young workforce on a one-time basis.”
Q4 turnaround
The lender, which faced heat from investors after their third-quarter earnings for poor show on deposit mobilisation, produced a much better performance in the fourth quarter. The bank mobilised Rs 1.66 trillion in deposits in the January-March period, of which retail deposits were Rs 1.29 trillion. As a result, the bank has gained market share in deposits in the fourth quarter.
This particular exgratia will help the bank stem attrition of employees, mostly the youngsters.
