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The 2008 crisis has separated the men from the boys, said Melevetil Damodaran, the chairman of the Business Standard Jury for Best Bankers of 2011-12, as the other Jury members nodded in agreement. There were other areas of agreement as well: that there is a need to go beyond the numbers and look at the intangibles.
The tone for the meeting was set by Sunil Mehta, the Country Head and Chief Executive of American International Groups India operations: Leadership and taking tough decisions are the most important aspects of banking today. Post-2008, what is coming out clearly is that leaders who had the courage and foresight to build the institution for the future were able to manage the crisis and come out stronger.
Apart from Mehta, the Jury, lead by Damodaran, former chairman of the Securities and Exchange Board of India, comprised Anil Singhvi, founder-director of IIAS, and Chairman of Ican Investments Advisors; and Rashesh Shah, Chairman and CEO of the Edelweiss Group.
The Jury first went through the performance of 23 banks which made the cut on parameters such as growth in deposits, advances, assets, bad debt, return on assets and business per employee, among other things. After the initial round of discussions, as the Jury members went through each of the parameters closely, an initial shortlist was made. Members wanted to also look at the consistency aspect; so it was back to the numbers again and the Jury considered the performance during each of the last three years so that it doesnt become a one-off show.
The jury then zoomed in on five banks all of which had put up an impressive show. At this point, Damodaran said and others agreed that apart from sustainable quantitative performance, what needed to be looked at closely were aspects such as leadership and transformation, the business model, IT and systems, talent, transparency and corporate governance. It was a close call, as the Jury found two bankers worthy of the award a private banker and a public sector banker. Since the award could go only to one of them, the Jury went in for more discussions and finally came up with the winner. It was M D Mallya, ex-chairman and managing director of Bank of Baroda. Though Mallya retired from the bank in November 2012, he still qualified for the award, as the year under consideration was 2011-12.
Bank of Baroda just nosed ahead of the second contender. It was a tough call, no doubt. One of the important factors that played a deciding role was the lesser flexibility that a chairman of a public sector bank has, the Jury chairman said, announcing Mallya as the BS Banker of the Year 2011-12. Mallya had won the same award in 2009-10 as well.
What also went in favour of BoB was consistency in its numbers for the last three years. When you look at all these numbers, what makes Bank of Baroda stand apart is its consistency be it deposit growth, commission or margin, the Jury said.
Most importantly, while the bank has grown, it also kept asset quality under control. Though non-performing assets have increased, this is much lower than most of its peers. With all the constraints public sector banks face and all the non-performing assets that are being created, he has done a sterling job, said Shah.
Besides, the Jury felt that a key factor for judging the success of a CEO should be how he had groomed gen-next leaders. Mallya has done a lot on this front to improve skill sets and build a healthy pipeline of leaders. The objective: Take out the drudgery of routine banking and make the organisation marketing-friendly and customer-oriented.
There was a special Jury mention of IndusInd Bank, though it is much smaller in size, but the Jury acknowledged the growth that the private sector lender has seen in recent times.
