PUBLIC SECTOR BANK
BANK OF BARODA
Former CMD, Bank of Baroda
Bank of Baroda (BoB) has managed to double its business every three years, growing by a compounded 25-26%, a creditable achievement given that it is among the larger banks in the country. BoB opened nearly 500 branches last year and is hoping to add another 500 this year. With a strong international presence, BoB is present in about 25 countries. However, a fair chunk of its incremental business comes from India’s rural and semi-urban areas, where around 60% of its branches are located. The bulk of the bank’s incremental business is being sourced from these areas. At the core of BoB’s strategy lies branch expansion, and the bank now has nearly 4,000 branches.
New private sector bank
Chairman & Managing Director, HDFC Bank
HDFC Bank has almost always been a role model for the banking industry given its steady profitability and low delinquencies. The bank has by and large stayed away from the big-ticket infrastructure space and in the past few years has changed the way it works. The focus now is on semi-urban and rural markets, which today bring 40% of the business. With the average loan size between R10,000 and R25,000, HDFC Bank believes it’s a profitable, and more importantly, scalable business. The target client base is 10 million families in the next four years. Of the bank’s 2,300 branches, over 40% are in semi-urban and rural locations.
Old private sector bank
TAMILNAD MERCANTILE bank
Former MD & CEO, Tamilnad Mercantile Bank
From humble beginnings in 1921, as a bank that catered mainly to the Nadar trading community of Tamil Nadu, Tamilnad Mercantile Bank (TMB) now has a much bigger clientele. Although primarily a retail bank, TMB has customers from local businesses to NRIs and offers a spectrum of services. it has grown its business by more than 50% in just three years and hopes to go public soon. TMB is looking to go paperless by next year through seamless integration at every level. The bank is in the process of identifying rural and semi-urban centres where there is a huge potential, and plans to increase its network to 275 branches and 300 ATMs before March 2012.
Stuart a davis,
Former Chief Executive Officer, HSBC
After a rough patch in 2008 and 2009, HSBC bounced back reworking its retail loan strategy such that it was less dependent on open sources and focussed more on its customers. The bank has rebuilt its retail loan portfolio in the last couple of years, especially the mortgages piece, while exploring tie-ups to grow the credit card portfolio. HSBC believes the current model will help it grow the business at a more sustainable pace, while it explores inorganic options. It is also leveraging its strengths in the loan syndication and foreign exchange businesses to grow the corporate loan portfolio.
PUBLIC SECTOR BANK
CMD, Corporation Bank
Mangalore-headquartered Corporation Bank has been growing its loan book by about 25% in each of the last three years but has still reported stable operating margins. Over the next couple of years, the bank plans to roll out more branches in semi-urban and rural locations, a move that would help with business growth. Currently, less than a fourth of the bank’s branches are located in these areas and moreover, most outlets are in southern India. As such, Corporation Bank will focus on making its operations more pan-Indian with a bigger presence in states like Uttar Pradesh, Rajasthan, Gujarat and Punjab. The bank also plans to cater more to SME customers by customising its products.
New private SECTOR BANK
Kotak mahindra bank
VC & MD, Kotak Mahindra Bank
Kotak Mahindra Bank (KMB) has a diverse business model and its defensive loan portfolio, with a high share of home and auto loans and relatively lower share of infrastructure loans, makes it well positioned to manage the credit cycle. The bank has built an integrated business model with a presence across all financial services that leverages the group’s capital market strength. By 2010-11, KMB had reduced its dependence – in terms of profitability – on its investment banking and market-linked business from around 60% in 2007-08 to about 17% in 2010-11. A stable and top-class management team, which has stayed on for over a decade, has ensured that the bank is able to cash in on opportunities.
Old private SECTOR BANK
Karur vysya bank
MD & CEO, Karur Vysya Bank
At a time when most banks boasted of scorching growth numbers but compromised on stability, Karur Vysya Bank (KVB) opted for a policy of cautious expansion. The bank’s assets have grown by over 60% between 2008-09 and 2010-11 but its bad loans shrunk to 0.07% from 0.25%. Predominantly catering to southern India, KVB now aims to become a pan-Indian bank by expanding its branch network in other states. The bank recently kick- started its next phase of growth based on a three-pronged strategy which looks to transform the organisational approach, business segmentation and in-bank customer experience.
Former MD & CEO, Deutsche Bank
In a challenging environment, Deutsche Bank leveraged its traditional strengths in the equity and debt capital markets, both at home and overseas markets to make reasonably good profits with fees contributing in a big way. Deutsche Bank has attempted to enhance cross-sell of products across all businesses and deepen the coverage for corporates and institutional clients. The bank is looking to expand its retail footprint in the country and increase its focus on the SME segment. And towards this end, it will expand the branch network moving into cities like Surat and Ahmedabad. In the wealth management space, the bank plans to focus on the ultra-HNI segment.
Award for initiative (Financial Inclusion)
State bank of india
State Bank of India (SBI) opened 273 branches and another 553 ATMs in rural areas in 2010-11.The bank also added around 8,000 customer service points (CSPs) in rural areas taking the outstanding tie-ups with agencies like ALW and FINO to 20,763. While other banks may have spread to the hinterland too, SBI has also built its own management information system (MIS) for dealing with about 60,000 business correspondents and business facilitators. Thanks to its own proprietary software, the MIS, the bank’s transactions have not only become very secure and transparent, but also saves on costs as it does not need to pay third-party service providers. The cost of operating a ‘no-frills’ account for SBI is R220 per annum, while it spends a minimum of R50 per transaction for accounts at its branches in semi-urban and urban areas. Today, these no-frills accounts are being used by the customers as personal accounts where they park their savings; there has been a continuous increase in the average balances and also the number of transactions. Earlier, these accounts were being used primarily to disburse state and Central government subsidies. The bank has laid down a road map for extending banking services to rural areas while establishing a strong technology platform for inter-connecting CSPs. The platform has ensured that these account are no longer dormant but fully functional. SBI has also launched ‘Tatkal’, a scheme that targets the urban poor, with the USP being that customers can transfer money to their families in their native towns and villages without actually opening an account.