Paresh Sukthankar: The conservative and risk-averse HDFC Bank veteran

The banking sector suffered two jolts on Friday. One, India’s largest lender State Bank of India (SBI) made an unexpected net loss of Rs 4,876 crore in the April to June quarter. It was the government bank’s third consecutive quarterly loss.

The announcement came around 2.15 pm on Friday and spooked the market crippling all bank stocks, with public sector banks index falling 3.8 percent.

Union Bank of India showed a turnaround in Q1 FY19 and reported a net profit to Rs 130 crore.

The bigger news, which was also the second jolt, came in a few hours later while Union Bank’s chief was addressing his post-result press conference. Media persons started getting incessant beeps and messages on their phones. The news was about HDFC Bank Deputy Managing Director Paresh Sukthankar’s resignation after 24 years.

A veteran in HDFC Bank, Sukthankar (aged 55) was touted to be the natural successor to Aditya Puri, taking the baton from him as the bank’s next CEO and Managing Director after Puri’s retirement in 2020.

At an analyst meeting in May, Puri laid down a roadmap for the upcoming succession planning and management transition at the bank. The depth of leadership at the bank will ensure that the handover is smooth, Puri had said, leading many to believe that Sukthankar would be a candidate for the top post. Puri had mentioned that the bank will look at internal or external talent and an announcement will be made in next 18 months.

Some speculate that Sukthankar could be joining rival Axis Bank, whose CEO and MD Shikha Sharma will step down in December. This coincides with Sukthankar’s resignation, which will be effective 90 days from August 10.

Deepak Parekh, Chairman of parent company HDFC, said Sukthankar was one of the contenders but he has cited personal reasons for leaving the bank. Parekh indicated he may not be joining competition.

Like Puri, Sukthankar has been a former Citibanker and been with HDFC Bank since its inception in 1994. He handled all roles in the bank: human resources, investor relations, risk management and various strategic initiatives.

Sukthankar has done an advanced management programme from the esteemed Harvard Business School.

Prior to that, he graduated as a Bachelor of Commerce from Mumbai’s Sydenham College and did his post-graduation from Jamnalal Bajaj Institute of Management Studies. He turned down an offer from Hindustan Lever (now Hindustan Unilever) to join Citibank. He stayed there for nine years before joining HDFC Bank.

In March last year, Sukthankar was promoted as Deputy MD from Executive Director.

A confident Sukthankar is known to be calm and composed as he co-piloted the second largest private bank, which is also the most valued bank in India and even globally.

He has a reputation for being conservative and risk averse. At a time when the entire banking sector has been reeling under heavy bad loans, HDFC Bank has largely remained insulated from it. The bank’s enviable loan and asset quality is a testimony to the strategy the bank has put in place under Sukthankar and Puri.

Sukthankar has also been a member of various Committees formed by Reserve Bank of India and Indian Banks' Association.

The outgoing HDFC Bank deputy is the son of former Maharashtra bureaucrat DM Sukthankar, who was the state’s Chief Secretary. Sukthankar has remained largely out of public scrutiny and is known to be a down-to-earth family man.

A staunch Hanuman devotee, he has a passion for Hindustani music. When not working over the weekend, the banker loves to play the tabla, which he started learning in his early childhood.

In an interview once, Sukthankar said, “It is important for us to balance growth with stable margin and asset quality. But we need to do this with discipline, as execution is a challenge.”