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on Co-operative banks
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retail king gets the crown
V Kamath has gone beyond just numbers by being innovative and creating
October 25, 2001, ICICI Managing Director and Chief Executive Officer
Kundapur Vaman Kamath and ICICI Bank Managing Director Hoshang Noshirwan
Sinor entered the Reserve Bank of India headquarters. Half an hour
later, a beaming Kamath and Sinor left the then RBI Deputy Governor
Y V Reddys cabin.
mission was accomplished. The countrys first universal bank
was to be formed five months later, with the reverse merger of ICICI
with ICICI Bank.
to a year ago, and the mood was very different in ICICI. The scene
and the dramatis personae were the same, but a different drama unfolded
on the RBIs 18th floor. On October 5, 2000, Kamath, Sinor
and a core team made a 40-minute, 22-slide presentation to a trio
of RBI deputy governors. The presentation outlined how ICICI would
metamorphose into an universal bank. But that day, Kamath was not
smiling as the regulators were not happy.
week later, in a teleconference with foreign institutional investors,
a disappointed Kamath said ICICI would become a bank only after
a transition path was finalised with its stakeholders and approved
by the regulator.
on November 10, ICICI Bank with Rs 74,315.82 crore market capitalisation
is way ahead of the State Bank of India (Rs 59,729.79 crore), its
peer in the private sector HDFC Bank (Rs 32,852.62 crore) and accounts
for close to 24 per cent of the market capitalisation of listed
terms of assets, it is still a distant second to SBI. As on March
31, 2006, its asset base was Rs 2,51,389 crore compared with SBIs
Rs 3,93,870 crore. The gap has, however, been narrowing fast. The
compound annual growth rate (CAGR) of ICICI Banks assets for
the last three years has been 23.86 per cent against SBIs
7.06 per cent.
has not only rescued the old ICICI, which was wilting under the
burden of bad loans and growing asset-liability mismatches, by converting
it into a bank, but also transformed it into a retail juggernaut.
five years, he has built a retail portfolio of over Rs 1,00,000
crore. In percentage terms, retail assets now account for 69 per
cent of the banks total assets. Of this, 51 per cent is mortgages.
630 branches, ICICI Bank services 20 million customers. It is the
leader in practically all retail loan segments mortgages,
auto finance and credit cards.
growing at a break-neck speed, Kamath has been able to contain net
non-performing assets (NPAs) at 0.72 per cent of its total assets
in March 2006. The comparable figure for HDFC Bank is 0.44 per cent
and SBI 1.87 per cent.
process of selecting the BS Banker of the Year was by no means an
easy one. In the first stage, a perception survey was undertaken
among finance professionals. In the second stage, the Business Standard
Research Bureau took a close look at the financials of all leading
focus was on the three-year CAGR of assets, operating and net profits
and net worth besides other parameters such as return on net worth,
return on assets, NPAs and market capitalisation.
the final lap, the senior editors of Business Standard had a brain-storming
session on the performance of top bankers.
Bank, Centurion-Bank of Punjab and Kotak Bank have done well on
most of the parameters but none of them could be considered for
the coveted title as IDBI Bank and Centurion-BOP had the benefit
of mergers and acquisitions, while Kotak Bank has a relatively smaller
base. Among public sector banks, Allahabad Bank too fared well.
the focus was on two banks HDFC Bank and ICICI Bank (the
third bank which has done extremely well on most of the parameters
is UTI Bank whose Chairman PJ Nayak was the BS Banker of the Year
most of the financial parameters, HDFC Bank has bettered ICICI Bank,
but the award goes to K V Kamath for two reasons. First, ICICI Bank
is more than three times bigger than HDFC Bank and, hence, the growth
rate cannot strictly be comparable. Finally, what helped Kamath,
58, clinch the Banker of the Year crown was his innovative streak
and the creation of niche markets.
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