BS Banker of the year: Aditya Puri

'Common-sense' banking wins accolade

As a five-member jury examined the financial numbers with a fine-tooth comb, the discussions were intense. But the decision at the end was unanimous: HDFC Bank Managing Director Aditya Puri is the Business Standard Banker of the Year 2013.

The country's second-largest private sector bank, the jury felt, had benefited hugely from Puri's "common-sense banking" - keep things simple, never allow retail customers to over-borrow, and refrain from lending to companies that have over-leveraged themselves.

The jury, headed by Subir Gokarn, former deputy governor of the Reserve Bank of India, also said the bank's greatest strength was its ability to maintain a consistency in quarterly credit growth, across credit cycles.

The other members of the jury were: Mahindra & Mahindra Financial Services Chairman Bharat Doshi, Ican Investment Advisors Chairman Anil Singhvi, former Bank of Baroda chairman and last year's Banker of the Year M D Mallya and DSP BlackRock Investment Managers President & Chief Investment Officer S Naganath.

The Business Standard Banking Annual, a special 60-page magazine being distributed free with the Friday edition, carries a detailed profile and interview of Puri, a graduate from Panjab University and a chartered accountant. Under him, HDFC Bank has reported year-on-year quarterly net profit growth of 30 per cent or more. The trend was disrupted only during the second quarter of this financial year, when the bank's profit after tax increased 27 per cent from a year earlier. But that was only to be expected in a year when the economy was under severe stress.

The private lender continues to maintain a superior asset quality - the share of net non-performing loans in net advances was only 30 basis points as at the end of September 2013. It has remained around this level since March 2010. The bank, which has been keeping its net interest margin in the range of 3.9-4.5 per cent for several quarters, has been growing its advances and deposits at a pace faster than the industry average.

Experts say the biggest contribution of Puri and his team has been aggressive expansion into rural areas - at a time none thought it was a feasible proposition. At present, almost half the bank's network of 3,200 branches are in semi-urban and rural areas, compared with 34 per cent three years ago. The bank aims to raise this number to 60 per cent over the next three years. Today, 56 per cent of HDFC Bank's distribution outlets are in semi-urban and rural areas but only 15 per cent of its income comes from these parts. The bank expects the income number to go up to 50 per cent over five years.

The Banking Annual also carries details of the Business Standard Banking Round Table, which saw six of the country's leading bankers sharing their thoughts on the road map for the future. All of them said the green shoots were visible but the pace of recovery would be slow.