Rana Kapoor is BS Banker of the year

Rana Kapoor, founder, managing director and chief executive of YES Bank, is the Business Standard Banker of the Year for 2010-2011. Kapoor was chosen by a four-member jury headed by

M Damodaran, former chairman of the Securities and Exchange Board of India, for the bank’s meteoric rise in the past five years.

The jury had initially shortlisted four bankers from a list of 28 on parameters ranging from return on equity and business per employee to quality of assets and growth in deposits and advances.

YES Bank, the youngest lender in the country, was founded by Kapoor in 2004. In the first six years of its operations, it witnessed a compound annual growth rate of 74 per cent. This period also coincided with one of the worst crises in the financial sector globally.

However, for Kapoor, the period of uncertain economic environment provided business opportunity in adversity. Last financial year, the bank’s net profit surged 52 per cent from a year earlier to Rs 727 crore. The return on average assets was 1.5 per cent, while the return on equity stood at 21.1 per cent. The private sector lender maintained a healthy asset quality, with net bad loan ratio shrinking to 0.03 per cent. Its balance sheet grew in tandem, expanding 62 per cent year-on-year. YES Bank’s capital adequacy ratio remained strong at 16.5 per cent as of the end of March 2011. Its Tier-I capital adequacy ratio stood at 9.7 per cent.

The bank has unveiled ambitious growth plans. Between 2010-11 and 2014-15, it aims to have a compound annual growth rate of 35 per cent, a balance sheet with Rs 1,25,000 crore in deposits and Rs 1,00,000 crore in loans.

Kapoor believes the stellar financial performance of the bank in the first year of its version 2.0 phase has strengthened the platform for the lender to deliver on key goals.

In an interview with Business Standard – the details of which have been published in the Banking Annual distributed with today’s edition – Kapoor said the bank now aimed to become a pan-Indian retail bank. “We plan to have 750 branches by 2015. Our foremost attempt in retail will be to provide all liability products and then in a steady manner roll out asset products,” he said.

The Banking Annual also carries excerpts from a Round-table discussion attended by the top executives of the country’s six leading banks — State Bank of India Chairman Pratip Chaudhuri, Bank of Baroda Chairman & MD M D Mallya, ICICI Bank MD & CEO Chanda Kochhar, Axis Bank MD & CEO Shikha Sharma, Citi India CEO Pramit Jhaveri and Deutsche Bank India CEO Gunit Chadha.

Bankers said liquidity would be a key factor that would shape banks’ strategy in deciding future interest rates, as most expected liquidity to dry up further. Bankers also said they saw a huge slowdown in loan growth, especially in the home and auto loan segments. The overall mood on economic growth, however, was optimistic. Most bankers pegged growth at 7.5-8 per cent. They also didn’t see any large-scale increase in non-performing assets.