Vijaya Banking On Professionals To Drive Up Growth

Public sector Vijaya Bank just like foreign banks is planning to hire MBAs and software engineers to drive its growth plans.

"Banking is like any other FMCG product. We are in the business of selling banking services. Hence, we will set up a marketing department and recruit MBAs to market our products and to bring out innovative schemes," M S Kapur, chairman and managing director, said.

Kapur has set an ambitious target of nearly doubling the bank's business to around Rs 40,000 crore in three years and believes MBAs will be one of the key growth drivers.

"We want to change the style of functioning of the bank. We will need professionals such as MBAs and software engineers to do that," Kapur said. "I have enough faith in my employees but professionals can certainly make some difference," Kapur said.

 

Over 100 professionals, including MBAs, software engineers and cost accountants, will be recruited soon. To attract the best talent, industry-level salaries will be offered.

The bank plans to set up a separate marketing department at the head office, which will directly report to the management. Each of the 14 regional offices of the bank will have a marketing officer whose job will be to put together innovative schemes for customers and also market them. "But that doesn't mean they do door-to-door selling," Kapur said. Initially, 30 MBAs specialising in marketing will be recruited who will work out of regional offices.

But the bank will steer clear of setting targets for its marketing team. "This could lead to manipulating figures and we don't want to get into such a situation" Kapur said.

Kapur said software engineers will be recruited to help network all the branches and make the bank IT-savvy. "Each branch will act as on outlet selling our services. We will be far more pro-active than we were before," Kapur said.

But the real growth, according to Kapur, will come from 'ordinary people'.

"We want to target people who can't afford to bank with big ones, where one needs to keep a minimum balance in thousands," Kapur said. Vijaya Bank currently has around 52 lakh shareholders. Kapur said even the loan schemes will be altered to cater to this segment so that even those who are studying for non-professional courses get these loans.

Vijaya Bank posted a 85 per cent increase in net profit to Rs 130.9 crore during 2001-02, while its total income increased by 14.2 per cent to Rs 1,727.33 crore.

Return on assets, which is a measure of profitability of the bank, improved to 0.86 per cent from 0.53 per cent. Percentage of net non-performing assets to net advances declined to 6.02 per cent from 6.23 per cent, while capital adequacy ratio rose to 12.25 per cent during 2001-02 from 11.5 per cent during the previous year.