Romesh Sobti, managing director (MD) and chief executive officer (CEO) of IndusInd Bank, is the Business Standard Banker of the Year for 2017-18, a recognition he would be receiving for the second time from the publication after being named the Best Banker in 2013-14.
Sobti, 68, was selected unanimously by a five-member high profile jury headed by former Reserve Bank of India deputy governor S S Mundra. Other jury members were former State Bank of India chairman Arundhati Bhattacharya, Icra MD and Group CEO Naresh Takkar, IIFL Group Chairman Nirmal Jain, and Ican Investment Advisors Chairman Anil Singhvi.
In the first screening, banks with a total asset size of less than Rs 50,000 crore and those that did not report a year-on-year increase in their pre-provisioning profit in the last three years were excluded. With 17 banks from the private and public sectors on the shortlist, the jury members rigorously evaluated a number of parameters — compound annual growth rate (CAGR) in assets, return on assets, profitability, net interest margin, non-performing assets (NPA), and market capitalisation. The jury, however, was clear that an objective look into the numbers should not be the main focus area to crown the Banker of the Year.
Leadership, vision, and business acumen would be of paramount importance, they said. The jury members zeroed in on three finalists, and found Sobti to be the winner — on both quantitative and qualitative parameters.
Sobti had acquired Bharat Financial Inclusion (BFIL) - one of the largest microfinance firms — to fortify IndusInd’s small-ticket loan business. The bank also stood out for its low NPA numbers, completing 2017-18 with a gross NPA ratio of 1.20 per cent of gross advances, whereas its competitors witnessed spurt in debt stress. The jury also recognised that IndusInd has been a solid all-round performer on every front year after year, and Sobti had considerably enhanced the bank’s brand image.
The jury members were also impressed that the bank’s quarterly performance was largely in line with its guidance. This showed Sobti kept a firm grip on the bank’s state of affairs and led the institution run as per a particular vision.
“The jury was unanimously of the view that Sobti qualified for the Banker of the Year award. The bank has shown consistent performance in various parameters and the initiatives taken such as the amalgamation of BFIL, which is a good balance sheet fit. We also noted initiatives taken on the digital front,” said jury chair Mundra.
“We felt Sobti deserved the award because the way IndusInd Bank has moved strategically in merging a microfinance organisation with itself and thereby strengthening rural outreach. Among the contenders, IndusInd had the lowest NPAs and in respect of other parameters also it has shown consistent growth, which is very close to the No. 1 in the respective parameters,” said Bhattacharya.
On a three-year CAGR basis, as of March 2018, the bank reported 25.6 per cent growth in assets and 26.7 per cent growth in deposits. Commission fees also grew 26.3 per cent, while net profit grew 26.2 per cent for the same period.