The metal replicas of a bull and a bear have been Romesh Sobti's constant companions in office over the last 15 years - first at ABN Amro Bank and then, for almost seven years now, at his well-appointed corner office at IndusInd Bank. "Though as a banker, my world has nothing to do with the stock markets, they have stayed on with me," Sobti says. As an afterthought, he adds with a laugh, they may have brought him luck as well.
Sometimes the bull is ahead in the race in tune with the changing times (Sobti pushes the bull in front for the benefit of the photographer) while at other times, the bear goes ahead. "As a banker, our job is to ride out both the cycles," he says.
Private banks in India, barring a few, have a habit of choosing their chief executives from bankers who have previously worked with foreign banks. But not many have been successful, certainly not the way Sobti transformed IndusInd after taking charge in February 2008.
When he joined the private-sector bank (incorporated in 1994), it was struggling with low profitability, mounting bad loans and asset-liability mismatch. Sobti was quick to identify the areas of stress and wasted no time in taking corrective action. He strengthened the corporate banking business, ensured an optimum balance between vehicle finance and other consumer loans, leveraged the branch network to raise low-cost deposits, stemmed credit quality deterioration, and maximised fee-based income through transaction banking services and distribution of third-party products.
His efforts yielded rich dividends. In his first full-year in charge (2008-09) IndusInd's net profit was up 98 per cent, in 2009-10 it surged 136 per cent, followed by a 65 per cent rise in 2010-11. The year-on-year rise in the bank's 12-month profit after tax has never been less than 32 per cent since Sobti became its managing director and chief executive officer.
Asset quality improved with the net bad-loan ratio declining to 0.33 per cent at the end of March 2014, from 2.27 per cent at the end of March 2008. The bank opened 422 branches during this period and used its expanded network efficiently to build its low-cost deposit base. CASA (current account savings account) deposits were 32.6 per cent of the bank's total deposits at the end of 2013-14. Fee income became a significant source of revenue, while the bank entered new businesses such as credit cards by exploiting inorganic opportunities.
When Sobti joined IndusInd (then a relatively small and unknown bank) the move surprised many. At that time he was the executive vice president, country executive - India, and head - UAE and subcontinent at ABN Amro Bank. He had already had stints with ANZ Grindlays Bank (now Standard Chartered Bank) and State Bank of India.
Sobti says his decision was driven by two simple reasons: one, while the job of the head of a multinational bank in India looks quite glamorous to the external world, the fact is that he/she has to always follow a global template. That can become tiring after a point of time. Second, though IndusInd was not exactly setting the Ganges on fire in 2008, he and a few of his colleagues at ABN Amro saw an opportunity to make the bank grow - responsibly and profitably.
Not one of those colleagues at the senior level has left IndusInd, as they all believe that "the future is still brighter than the past". That may be an understatement; after taking charge of IndusInd, Sobti has turned it into one of the fastest-growing banks in the country in terms of consistent growth in financial metrics while maintaining tight control over asset quality.