HSBC said the resignation of the bank’s chairman appears to stem from a difference of opinion rather than governance concerns.
However, it warned that the development could lead to some valuation multiple compression, adding that an improvement in performance metrics would be key to offset the impact.
The brokerage now values the core banking business at 2.2x FY27 estimated book value per share, down from 2.4x earlier.
Earlier on Friday, CNBC-TV18 had reported that HDFC Bank has terminated Sampath Kumar, Group Head of Branch Banking, along with two other senior executives over their alleged involvement in the mis-selling of Credit Suisse’s additional tier-1 (AT1) bonds.
The other two executives include Harsh Gupta, Executive Vice President for the Middle East, Africa and NRI onshore business, and Payal Mandhyan, Senior Vice President.
Both had been suspended since January last year pending the outcome of an internal probe linked to the Dubai branch.
The issue pertains to allegations by primarily non-resident Indian (NRI) investors, who claimed they were misled into shifting their foreign currency deposits and sold AT1 bonds as fixed-maturity instruments, despite their perpetual nature.
These bonds, worth $20 billion, were written off during the Credit Suisse bailout, although a Swiss court later termed the write-off unlawful, a ruling currently under appeal.
Following the episode, the Dubai Financial Services Authority barred the bank from onboarding new clients from its Dubai branch.
The stock has remained under pressure despite repeated management assurances. HDFC Bank shares declined 4.4% last week, extending losses after a 4.7% drop in the previous week.
This marked the fourth consecutive weekly decline, with the stock falling in five of the last six weeks.
Technically, the stock has slipped below key moving averages and entered oversold territory, with the RSI at 24. It has also moved into a bear market phase, correcting over 20% from its recent peak.
The stock is down about 22% from its 52-week high of ₹1,020 touched in October last year.
HDFC Bank shares ended 2.15% lower at ₹781 on Friday and are down over 21% so far in 2026.
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