banking on nmacs

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CONTENTS

BEST BANKS INSIDE

EditorialIndian banks need to scale top 4

Theme StoryGamechangers in the Indian banking sector 6

Methodology RationaleLooking to strengthen and consolidate,maintain credit quality and profitability 10

Nationalised Bank Rank 1: Punjab National Bank 18Rank 2: Bank of Baroda 20

New Private Sector Bank Rank 1: HDFC Bank 22Rank 2: Axis Bank 24

Old Private Sector Bank Rank 1: Federal Bank 26Rank 2: Tamilnad Mercantile Bank 30

Foreign Bank Rank 1: JP Morgan Chase 32Rank 2: Citi 34

Credit Quality Rank 1: IndusInd Bank 36

TablesDetailed rankings with banks categorised into public sector banks (PSB), Old Private Sector Banks (OPSB, New Private Sector Banks (NPSB) and Foreign Banks (FB) 38

Regulator Speak: K C Chakrabarty“Go for financial inclusion” 54

Guest Column: K V KamathWeathering the storm and emerging a global force 56

� THE FINANCIAL EXPRESS � MARCH 2010

‘We aspires to become a global bank’

K R KAMATH,MD&CEO, Punjab National Bank

‘We are a delta on theIndian economy’ADITYA PURI,MD&CEO, HDFC Bank

18 22

‘Emerging as a lenderto the common man’

M VENUGOPALAN,Chairman, Federal Bank

‘We will cater with a suite of services’KALPANA MORPARIA,CEO, JP Morgan

26 32

‘Financial inclusionplans are profitable’

V ROMESH SOBTI,MD&CEO, IndusInd Bank

‘Go for financialinclusion’K C Chakrabarthy,Deputy Governor, RBI

36 54

Weathering the storm and emerging a global force

K V KAMATH,Chairman, ICICI Bank

56


EDITORIAL

THE global financial crisis and its aftermath forced banks to introspect aboutthe kind of financial sector architecture India should have in the years ahead.Indian banks escaped the contagion because they were highly regulated at

home and not too integrated with the global financial system in terms of sharing therisks inherent in the trillions of dollars of worthless financial products.

But this does not mean that a rapidly rising Indian economy and its financialsector can avoid integrating with the global financial system. India cannot become aglobal player unless its banking system reinvents itself to deal with the thousandsof businesses which are doubling in size every 4 to 5 years. The one key learningafter the financial crises was that Indian banks needed to have size. Wheninternational credit delivery froze for several months after the Wall Street crises,foreign lenders stopped lending and Indian banks were called upon to rescuecompanies. Unfortunately, Indian banks found they did not have big enough balancesheets to meet the exigencies .This resulted in a healthy debate over how Indianbanks can actually build scale to not only fuel the global ambitions of its domesticbusinesses, but also to take banking to the next 400 million in rural India.

The debate over creating a few Indian banks which rank among the top ten inAsia is not a new one. But it has assumed fresh urgency in the context of the balanceof economic power rapidly shifting towards Asia. God forbid, if there is anotherfinancial meltdown and a double dip recession in the West, India will need banks ofthe size and scale which will keep feeding the growing domestic economy. The realmacro-economic challenge is of garnering another 10% of GDP as savings over thenext decade. Banks have a big role in realising this objective. Initially thegovernment thought it could persuade public sector banks to merge and thus createscale. There is a counterview that such mergers cannot be forced in a top downmanner, and must be effected in a bottom-up organic way based on real synergies.The jury is still out on this one.

Pranab Mukherjee intends to create more competition by issuing new bankinglicenses. This is good news ; more competition will strengthen the domesticfinancial sector and will create conditions for consolidation.

This year FE best Banks has introduced a new test –liquidity which measureshow much a bank is in a position to meet its liabilities with current assets. In thiscontext, some banks which had a much more diversified base of small depositorshad lower bulk borrowings to meet growth on the lending side. Many banks are nowreturning to the virtue of lowering the borrowing to deposit ratio. We hope theanalysin the FE Best Banks Awards would help in creating new standards for India’sbanks to move to the next level of globalization as well as localization i.e takingbanking to the next few hundred million unbanked in rural India. We are thankful toour knowledge partner Ernst & Young for evolving newer standards to assess thestrength, profitability and efficiency of banks.

M K VENU

Indian banksneed to scale up

FE-EY

BEST BANKS SURVEY 2009-10

Chairman of the BoardViveck Goenka

Group Editor-in-ChiefShekhar Gupta

Managing EditorM K Venu

Project Co-ordinatorAkash Joshi

Editorial Co-ordinatorsSitanshu Swain, Ayesha Dominica Singh,

Sushila Ravindranath

Editorial Mahalakshmi Hariharan, Kumud Das,

Saikat Das, Sajan Kumar

DeskAyesha Dominica Singh

Research Team Sujith Pillai, Sandeep Nalge, Tara Boi

PhotographersA Srinivas, Mahindra Parikh, Vasant Prabhu,

Prashant Nadkar, Ganesh Shirsekar, Dilip Kagda, Pradip Das, Ritika Jain

Design TeamManoj Bhramar, P L Santosh,

M P Singh, Rohnit Phore

Marketing Co-ordinatorsThe Express Group

Space Marketing Team

ProductionB R Tipnis & Team

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by Ms Vaidehi Thakar at The Indian Express Press, Plot No. EL-208,

TTC Industrial Area, Mahape, NaviMumbai 400 710 and published from

Express Towers, Nariman Point, Mumbai 400 021.

■ Copyright: The Indian Express Limited. All rights reserved. Reproduction in any manner,

electronic or otherwise, in whole or in part, withoutprior written permission is prohibited.

IBR

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3

Conventional way

B R I D G E S

H I G H WA Y S

T U N N E L S

T O L L - R O A D S

A I R P O R T S

R E A LT Y


Viren H Mehta

THE Indian banking sector hasemerged as one of the strongestdrivers of India’s economic

growth. Positive changes witnessed inthe last two decades have impactedevery aspect of banking, ranging fromregulatory standards to customermanagement. Indian banks adaptingto the changing landscape along withthe vision of the regulator and theGovernment in shaping the futuregrowth of banking were two of thenoteworthy features of thistransition.

While banks evolved theirstrategies in response to increasingcompetition and changing customerrequirements, the regulator guided itsgrowth with policies of gradualliberalisation and benchmarking the

domestic system with the best in theworld, even if it appearedconservative at times.

As the world recovers from theglobal financial crisis, Indian bankinghas remained resilient while con-tinuing to provide growthopportunities. With the increasedparticipation of new private sectorand foreign banks, the Indian bankingindustry has become fiercely com-petitive. Competition will be furtherintensified with the proposed entry ofnew private players and non bankingfinancial companies (NBFCs).

Financial inclusionGiven the sheer size of the

unbanked population in India, thegoal of financial inclusion not onlycarries tremendous social appeal, butalso makes definite economic sense.

International experience withfinancial inclusion has sufficientlyproved that achieving growth,aggressively tackling competition andsocial inclusion can go hand in hand.Indian banks will tremendouslybenefit themselves and the society bydeveloping focused strategies toaugment the outreach of theirservices to attract the mass marketand consider it as a potential businessopportunity than as a regulatorymandate.

As urban markets get adequatelypenetrated the competition to sustainand grow the market share, maintainmargins will force banks to look fornewer markets. With ruraldevelopment gaining a prominentposition on government agenda,income, awareness and aspirations ofthe rural population are bound to

Gamechangers in the Indian banking sector

THEME STORY

Illustration: ROHNIT PHORE


THEME STORY

increase. Banks quick to establishpresence in the vast hinterland andcustomise financial products for thepoor will capture growthopportunities. Deployment of acombination of multiple deliverychannels capable of offering timelyconvenient and cost-effective serviceswill stay ahead of the curve.

A feasible option to explore wouldbe to effectively partner withmicrofinance institutions, localcommunities, businesscorrespondents even NGOs to deliverfinancial services and benefit fromtheir reach. Use of informationtechnology is another valuable tool.

ConsolidationTo survive in an increasingly

competitive environment, marketdynamics point towards attaining asizeable scale and capital base,possible only through consolidation.

Backed by political will andfavourable economic variables, thelong impending objective to develop afew Indian banks of global scale is nolonger based on surreal expectations.

To be relevant on a regional orglobal basis, it will be essential forIndian banks to explore inorganicexpansion within and outside India.

Mobile bankingWith the onset of mobile banking,

the industry finds itself at thethreshold of the next majortechnological leap. M-banking offerssignificant cost-saving advantages byway of reduced transaction costs andis even expected to replace manydelivery and payment systems. Thelarge and ever-growing mobile baseprovides banks with the opportunityto offer services in areas where theyhave a limited branch presence. M-banking can be an effective tool forcapturing the unbanked rural marketas almost 50% of new mobilesubscriptions come from rural areas.

M-banking can be made moreincisive if challenges such asawareness, coverage in rural andsemi-urban areas, widening the scopeof banking facilities, transparencyand security issues are addressedefficiently. The pervasive

effectiveness of mobile technologywill drive regulations that allowgreater use of this technology forbanking transactions whilsteffectively controlling it abuse.

Risk managementThe Indian banking industry is

expected to witness unprecedentedgrowth in the volume of business inthe coming decade and this bringswith it huge challenges for riskmanagement. The financial turmoilalso underlined the indispensabilityof the process of internal controls,corporate governance and riskmanagement.

A bank with sound riskmanagement practices in place will beable to precisely ascertain the creditprofile of its borrowers, resulting inenhanced ability to predict default,

reduce bad debts and raisecollections. This will in turn enablelower capital requirements, improvedperformance and higher risk adjustedrate of return.

The proposed implementation ofadvanced approaches of Basel II willensure better quantification andaccounting of various risks therebyensuring more holistic riskmanagement system in the Indianbanking industry.

Quality risk management systemscould very well act to the advantage ofa bank in a country like India, whichhas a shallow documentation of credithistory, especially in retail banking,and a nascent culture of creditinformation sharing.

Account-centric approachWith rise is competition, banks are

grappling with increased customermigration as switching costs are

nearly negligible and productdifferentiation is replicated with ease.This has led to customerunderstanding and superior servicegaining tremendous prominence.

To profitably stay in the race,successful banks are adding a newdimension to customer engagement.They are now adopting a completeaccount-centric approach. Thisessentially involves acquiring acustomer at an early stage and thenbuilding a long-term relationship,offering different products andservices not only suitable for differentlife stages of the client.

Human capital development The skill level, attitude and

knowledge of the employees have asubstantial bearing in determiningthe competitiveness of a bank.Needless to say, banks makinginvestments in their human talentwill reap the benefits.

Cost optimisationMultiple channels, varied

customer profile and vast geographicspread have contributed to theincreased distribution cost for banks.

Banks should target the optimalmix of channels to reach the rightcustomers at minimal cost. Banks areincreasingly leveraging technology toachieve economies of scale inoperations, besides aiming foradministrative efficiency.

Another focus area is outsourcingof non-core functions and banks thatmanage these challenges will be ableto differentiate themselves in themarket.

ConclusionThe banking sector in India offers

huge opportunities. Upward directionof interest rates, increasinglydemanding customers, focus onfinancial inclusion, technologicaladvancements, competition forhuman talent and efficient utilisationof a bank’s resources are someinherent challenges, which need to beaddressed to unleash the competitiveadvantage offered by the Indianbanking sector and energise growth.

The author is director, Ernst & YoungIndia Pvt Ltd.

Quality risk management systems

could very well act to theadvantage of a bank

in a country like India, which has a shallow

documentation of credit history


METHODOLOGY � RATIONALE

Husain Diwan and Viren H Mehta

THIS year’s edition of the FE-EYIndia’s Best Banks Survey is setagainst the backdrop of

recovery in the global economy afterthe widespread financial crisis. TheIndian economy continued to grow ata decent rate as compared to the rest ofthe world. However, the current crisishas exposed certain limitations andweaknesses. Liquidity problems andcredit defaults have made banks morerisk-averse. A gradual shift from"Managing Crisis" to "Managing

Recovery" is now the focus ofregulatory strategy.

Despite the financial turbulence,the economic growth of Indiaremained reasonably unscathed.

As ever, each category of banks -public, old private, new private andforeign banks face its own uniquechallenges ranging from creditdefaults and restructuring of loans,liquidity, reputation and dwindlingnet interest margins to technologyand manpower.

Considering these aspects, Ernst& Young has ranked the players with-

in the Indian banking sector - 27 pub-lic sector banks, 13 old private sectorbanks, 6 new private sector banksand 12 foreign banks based on theirnatural genres.

Five major criteria were selectedto compare performance of theIndian banks. These criteria are -Strength and Soundness, CreditQuality, Growth, Profitability andEfficiency. Considering the currentscenario of Indian banking, compli-mented with moderate economicgrowth, we believe every Indianbank would be evaluating itself and

Looking to strengthen &consolidate, maintain credit

quality & profitability

Illustration: ROHNIT PHORE

making peer comparison based onthe major criteria selected as above.

Trust of the depositors on a bankand trust of the bank on its borrow-ers continue to form the foundationof the banking business. The meas-ure of this trust is the Strength andSoundness of a bank. The ability ofa bank to absorb shocks is dependenton its strength and soundness.Accordingly, Strength and Soundnesshas been selected the first criterionto measure Indian banks with high-est weight of 0.25.

As a result of greater emphasis onhigher exposure to sensitive sectors,consumption loans, and restructur-ing of debt, Credit Quality is onceagain a key factor on which Indianbank’s performance would revolveand is therefore selected as the sec-ond criterion. With the global melt-down and defaults in credit repay-ment due to liquidity and confidenceconcerns, admittedly, Credit Qualityhas re-emerged as a concern. Hence,the weight for Credit Quality hasbeen assigned a weight of 0.20.

The slow economic growth experi-enced in FY09 was mirrored in thegrowth of Indian banks. Intensecompetitive forces played a veryimportant role in determining

banks’ strategies for market domi-nance. Therefore, banking assets andearnings grew along with the entireeconomy, but the leaders of the packwere required to stand out.Accordingly, Growth is the thirdmajor criterion selected with anassigned weight of 0.20.

With India experiencing a recov-ery in many areas of the economy inthe year gone by, it is only expectedthat there is a consequential impacton the financiers of the economy. Inthese times, it is imperative that thebanks should have a minimumthreshold in terms of size and ade-quacy of capital to reflect soundnessand maintain an improved creditquality. However, all these must beachieved whilst maintaining prof-itability. Therefore, Profitability isselected as the fourth major criterionand assigned a weight of 0.20 match-ing the imperative for banks toachieve growth combined with quali-ty assets.

In the environment of upwardpressure on interest rates, demand-ing customers, and greater need forfinancial inclusion, it is absolutely

essential that banks operate and‘sweat’ their resources efficiently.Hence, it is important to evaluate abank’s performance based on effi-ciency with which it has used itshuman, technological and financialresources. Therefore, Efficiency hasbeen selected as the last major crite-rion with a weight of 0.15.

Further, six sub-criteria have alsobeen selected within each major cri-teria to cover the entire spectrumwithin each of the major criterion.

Size, in terms of Capital,Networth and Total Assets, are indi-cators of the fundamental strength ofa bank around the world, whereas,Adequacy of Capital, portion ofBorrowings as compared to Depositsand Liquidity represent soundnessand stability of a bank. Liquidity hasbeen calculated based on the maturi-ty pattern-upto one year of advancesand investments less deposits andborrowings. Accordingly, these sub-criteria were selected to measurebanks based on their Strength andSoundness. Banks are often com-pared using Total Assets as a bench-mark. In the current economic con-text where efficiency in use of capi-tal and effectiveness of deploymentof deposits are more respected, aweight of 0.20 is assigned to TotalAssets. Networth comprises bothtotal capital and accumulated profitsand accordingly, is assigned theweight of 0.20, followed by Liquidityand extent of reliance on shorterduration funds as compared todeposits (Borrowing/Deposits Ratio)with both being assigned weights of0.20 and 0.15 respectively. CapitalAdequacy Ratio and Core Capital arepowerful indicators of a bank’sinherent strengths. However, veryhigh Capital Adequacy Ratio andCore Capital could also mean ineffi-cient use of capital. Therefore, alower weight of 0.15 is assigned toCapital Adequacy Ratio and 0.10 toCore Capital.

Increase in Gross NPA,Restructured Loans, NetNPA/Networth, Gross NPA/GrossAdvances, Increase in GrossNPA/Increase in Gross Advancesand Increase in Net NPA/Increase inNet Advances are the sub-criteria



Viren H Mehta (left) and Husain Diwan of Ernst & Young

selected to compare banks on CreditQuality. The rate of increase in grossnon-performing advances comparedwith the rate of increase in grossadvances, and the rate of increase innet non-performing advances com-pared with the rate of increase in netadvances are considered to be ofrelatively higher importance to abank’s management. Accordingly,these sub-criteria are assigned thehighest weights of 0.25 to assessCredit Quality. The increase of GrossNPA has been assigned the next levelweight of 0.20. One of the policymeasures to assist businesses to tideover the economic slowdown was toencourage banks to restructure loansto customers without affecting theirclassification. Through this specialregulatory accounting treatment,although these continue to be classi-fied as performing, they evidenceinherent credit weakness.Therefore, the quantum of restruc-tured loans, introduced this year,and networth rendered non-perform-ing are the next important aspects ofCredit Quality and are assigned theweights of 0.10. Additionally, the por-tion of a bank’s gross advances com-prising gross non-performingadvances is assigned a lower weightof 0.10.

Growth in Total Assets, Advances,Deposits, Net Profits, Net InterestIncome (‘NII’) and Increase in NetWorth are selected as parameters forassessing Growth. The need forincreasing market share in depositsto fuel its funding requirements ofbanks on an effective basis haveresulted in assigning higher weightto growth in Deposits of 0.30, fol-lowed by equal weights of 0.20 forgrowth in Advances and Net Profits.Growth in Total Assets would notnecessarily result from growth inbanking operations as banks coulduse the safe-habour of governmentinvestment, instead of lending.Hence it is assigned a weight of0.10. Further, with the current stress on net interest margins due tocurrent pressure on interest rates,focus on improving these has alsosharpened. With implementation of standardised Basel II norms,banks are also focussed on mainte-

nance of their networth. Hence, thissub-criteria is assigned a weight of0.10 that are a notch lower in comparison with other aforesaid sub-criteria.

Return on Assets, Yield onAdvances, Return on Networth, Costof Deposits, Cost-Income Ratio andReturn on Investments are the sub-criteria selected to measure banksbased on Profitability. The stakehold-ers would closely focus on Return onAssets and Return on Shareholders’Funds i.e., Networth. Thus, thesesub-criteria are also assigned higherweights of 0.20. Currently, differentconstituents of banks would focus atCost of Deposits and managing costs.

Accordingly, both these sub-criterionare equally important and are alsoassigned equal weights of 0.20.Whereas Yield on Advances andReturn on Investments are impor-tant, in the current interest rate sce-nario, these sub-criteria are assignedweights of 0.10, a notch lower in com-parison.

Banks that are able to adapt quick-ly to the evolving economic environ-ment, are the ones that create mostvalue. The increased competition forhuman and financial capital,increased expectation on perform-

ance, improved technology platformsdemand that the human, technologi-cal and financial resources be moreefficiently deployed and leveraged.Therefore, Spread/Total Assets,Operating Expenses/Total Assets,Business Per Employee, Profit PerEmployee, Non-InterestIncome/Total Assets, Profit PerBranch are selected as sub-criteria tomeasure Efficiency amongst banksin India.

Spread/Total Assets andOperating Expenses/Total Assetsmeasure Efficiency in use ofresources and these are assignedweights of 0.25 and 0.15 respectively.Business Per Employee and ProfitPer Employee measure utilisation ofhuman capital and are assignedweights of 0.15 and 0.20 respectively.With the objective of garneringdeposits and penetrating underbanked areas and population, Indianbanks are increasing their branchnetwork and accordingly profit per

branch has been considered as oneof the sub-criteria to measure

efficiency. NII reflects the abili-ty of the bank to charge its

customers for its servicesand augment the bottom line

of the bank without requiring alloca-tion of capital and hence reflects useof set organisation skills and net-work. Therefore, the last two sub-cri-teria are assigned weights of 0.15and 0.10 respectively.

The results of the ranking arebased on financial performance ofbanks during FY 2009. While somemay not concur with the aforesaiddissertations, we believe that in thecurrent Indian environment, theabove ranking methodology is mostappropriate - so much so that whenstress tests were performed, theresultant top ranking banks weresignificantly the same.

Going forward, the success for thebanking industry as well as individ-ual institutions will be predicated onhow banks will shape their strategiesto support the Indian economyemerging from a slowdown, encom-pass the vastly under and un-bankedregions and population and providethe much needed financing forIndian structure. ◆



Success will bepredicated on how banksshape their strategies tosupport the Indianeconomy emerging froma slowdown



1. Banks were categorised into public sector banks(‘PSB’), old private sector banks (‘OPSB’), new privatesector banks (‘NPSB’) and foreign banks (‘FB’). With theobjective of making the comparison more meaningful,banks with total assets less than Rs 5,000 crore as onMarch 31, 2009 and banks that ceased to exist in Indiaduring 2008-2009; were not considered for the rankings.

2. Financial information for the year ending March31, 2009 relating to each of the banks falling into theaforesaid categories was collected from the data avail-able from the Reserve Bank of India. To ensure consis-tency, only the published information was used.

3. Five different major criteria were identifiedagainst which the Indian banks were to be ranked.These criteria are: (i) Efficiency, (ii) Profitability, (iii)Growth, (iv) Credit Quality, and (v) Strength andSoundness. Considering the current banking, industri-al and over-all economic scenario, pertinent weightswere assigned to each of the major criterion. Therationale for selecting each of the criteria and assign-ment of their respective weights is discussed in theabove-mentioned article.

4. Six sub-criterion were selected within each of theaforesaid major criteria, which would cover the vari-ous aspects within the aforesaid criteria. Consideringthe current banking, industrial and over-all economicscenario, pertinent weights were assigned to each ofthe sub-criterion. These sub-criteria and their respec-tive weights (in brackets) are:

(i) Efficiency (0.15)(a) Non-Interest Income/Total Assets (0.10)(b) Business per Employee (0.15)(c) Profit per Branch (0.15)(d) Operating Expenses/Total Assets (0.15)(e) Profit per Employee (0.20)(f) Spread/Total Assets (0.25)

(ii) Profitability (0.20)(a) Yield on Advances (0.10)(b) Return on Investments (0.10)(c) Return on Assets (0.20)(d) Cost of Deposits (0.20)(e) Return on Networth (0.20)(f) Cost/Income Ratio (0.20)

(iii) Growth (0.20) (a) Total Assets Growth (0.10)(b) Net Interest Income (‘NII’) Growth (0.10)(c) Increase in Networth (0.10) (d) Advances Growth (0.20)

(e) Net Profits Growth (0.20)(f) Deposits Growth (0.30)

(iv) Credit Quality (0.20)(a) Restructured Loans (0.10) — Introduced this year(b) NNPA/Networth (0.10)(c) GNPA/Gross Advances (0.10)(d) Increase in Gross Non-Performing

Assets (‘GNPA’) (0.20)(e) Increase in GNPA/Increase in

Gross Advances (0.25)(f) Increase in NNPA/Increase in Net

Advances (0.25) (v) Strength and Soundness (0.25)

(a) Core Capital (0.10) (b) Capital Adequacy (0.15) (c) Borrowings/Deposit Ratio (0.15) (d) Liquidity (0.20) (e) Total Assets (0.20)(f) Networth (0.20)

The rationale for selecting each of the sub-criteriaand assignment of their respective weights is dis-cussed in above-mentioned article.

5. Banks were ranked, category-wise, within each ofthe aforesaid sub-criteria. These sub-criteria rankswere multiplied with sub-criteria weights and theweighted sub-criteria ranks were carried over to eachof the major criteria. The sub-criteria ranks were thenmultiplied by the major-criteria weights. The resultantweighted major-criteria ranks were aggregated todetermine the best bank in each of the four categoriesand each of the five criteria.

6. As discussed in the abovementioned article, sinceall the banks, irrespective of their ownership (catego-ry), compete in the same market place, vie for the samecustomers and are faced with the same situation, itwas deemed appropriate to determine a best bankwithin each of the major-criteria selected by us. Herethe same aforesaid process was followed, but the bankswere not spilt into their respective categories.

7. While ranking banks of the aforesaid 30 parame-ters, it is found that banks with total assets of lessthan Rs 5,000 crore compare favourably against largerbanks. These are primarily foreign banks that operatein India in a very limited manner. Including thesebanks often distort the results and thereby, render theranking less meaningful. Accordingly, banks with totalassets less than Rs 5,000 crore have been excluded.

8. Also excluded are banks that merged their opera-tions with other banks during 2008-09, e.g., pursuant tothe merger of State Bank of Saurashtra with State Bankof India, the parameters of the merged entity are takenfor 2009, whereas the parameters of erstwhile State Bankof Saurashtra have been disregarded for 2009.

Team Ernst &Young: Viren H Mehta, Husain Diwan,Tanvi Vedak, Surendrakumar Mundra, Karan Shahand Vikas Kabra

ApproachFramework

� FE-EY India’s Best Banks Survey

PUNJAB NATIONAL BANK � NATIONALISED BANK � RANK: 1


Punjab National Bank (PNB) is fastemerging as a global financialpowerhouse. KR Kamath, CMD, PNBshares his views with SitanshuSwain and Kumud Das of theFinancial Express about the bank’smulti-pronged strategies to achieverapid growth. Excerpts:

The bank has really turnedaround and climbed upwards inthe last two years in itsperformance. How has the bankachieved this feat?

Government ownership and goodgovernance practices of Indian PSBshave proved to be pillars of strengthin times of economic downturn.Every crisis brings with itopportunities. Punjab National Bankwas in the forefront to identify suchopportunities arising out of theglobal slowdown and converted it intobusiness while supporting customersto handle the situation withconfidence.

In addition, the bank’scountrywide presence even deep intoremote/rural areas gives it an edgeover its peers in the form ofavailability of low cost resources. Theexcellent IT capabilities set up by thebank facilitate handling of largervolumes in an efficient way. Thesound fundamentals of the bank alsolent support to the upward movementof the bank.

Our conservative approach androbust risk management practiceshelped us to keep our profitabilityintact. The bank’s corporategovernance framework helped inmeeting aspirations of variousstakeholders in a transparentmanner. All these facilitated thebank’s superior performance.

Do you think the fact thatprivate sector banks and foreign

banks were lying low during theeconomic slowdown gave anadvantage to public sector bankslike you to move upward in thebusiness?

As I have already said, the crisisbrought opportunities as well andPNB cashed in on those opportunitiesto convert them into business,whether in the form of additionalloans or even restructuring of someexisting portfolios. The bank was atthe centre stage of operations whenothers moved away during times ofcrisis and downturn. While we didgrow, it had nothing to do with thebusiness of the private sector andforeign banks, since our areas ofoperation are vastly different.

The fact that the bank is asecond largest PSB gives you extraresponsibility in the consolidationspace. What are your plans on this,as the government is keen to takethe consolidation agenda forward?

There is no denying the fact thatthe banks in India need to consolidateto become bigger and stronger for avariety of reasons.

The banks in India are very smallas compared to the global banks andhence to become a global player,consolidation is the only way ahead. Itwould be worth mentioning that thelist of 1000 World banks compiled by“The Banker, London” in 2009, carriesthe names of only 32 Indian banks.The biggest Indian bank (SBI) isplaced at the 76th position in terms ofassets, with $256 billion, wherein thefirst rank has been bagged by RoyalBank of Scotland with an asset size of$3,500 billion. Thus, to be able to facecompetition from foreign players,banks would need to consolidate,though such moves need not bepredatory alone. Rather, they could becollaborative as well.

The country is going to witness adramatic increase in infrastructurespending as per the plannedexpenditure outlined in the 11th FiveYear Plan. This would require banksto enhance their capital andstrengthen their balance sheets to beable to finance such projects and takea larger share.

Globalisation of Indian corporateshas also put pressure on Indian banksto globalise and have a greaterpresence abroad. To offer world classservice to world class corporates andsatisfy their demands forsophisticated products, the bankswould need to strengthen themselvesthrough consolidation.

A large chunk of our populationstill continues to be out of the ambitof financial services and financialinclusion is one of the mostimportant steps towards inclusivegrowth.

Having said that, let me also addthat we are not in a hurry. For the lastcouple of years there is a healthydebate going on, which is ironing outthe differences between variousstakeholders on this issue. However,whenever the opportune time comes,we will not hesitate to make the rightmoves.

What is your future vision forthe bank?

The bank has envisionedambitious growth targets for theperiod ending 2013. The bank plans togrow its business to Rs 10 lakh croreby 2013 and increase its customer baseto 15 crore.

PNB aspires to become a globalbank and plans to implement the bestglobal practices to effectively competein the market by providing a completerange of financial services. The bankwould also make efforts to sustain itsleadership position amongstnationalised banks in all domesticoperations, in financial inclusion, inadopting best risk managementpractices, in implementing globalbest practice in corporate governanceand corporate social responsibilityand in HR policies. The bank alsoaspires to become a universal bank,providing a complete range offinancial services under one roof. ◆

THE FINANCIAL EXPRESS � MARCH 2010 � 19

‘We aspires to become a global bank’

K R KAMATH, MD&CEO, Punjab National Bank

BANK OF BARODA � NATIONALISED BANK � RANK: 2

MD Mallya, CMD, Bank of Barodaspeaks to FE’s Sitanshu Swain &Kumud Das about the turn aroundstrategies of the bank. Excerpts:

How did the bank unlock itspotential?

The bank has great potential. Ishould put it on record that it is thegood work done by my predecessorsthat has brought the bank to this level.Two-three very significant changeshave been made at the bank over aperiod of three to four years, whichhave also contributed to a make-overof the bank.

One is on the technology side.Second is the brand building exercise.The change in the entire brand hashelped us to develop strong visibilityand unlock the value of the bank.Having a brand ambassador was itselfa concept, which was something newto public sector banks.

What are the new initiatives youhave taken after you joined?

Among many things, we have takentwo important initiatives. Last year,we took up a project of businessprocess reengineering (BPR). Havingput the technology in place, it is thenext step to ensure that you harnessthe technology pattern for businessgrowth through improving customercare services, which need to besimplified. The project is known asProject Navnirman.

The second project is known asBaroda Next, which is being headedby an officer in the rank of a generalmanager. Basically, it is a BPR project.This initiative was taken up by usduring the last year itself. Thereforewe started searching for a consultantwho could help us in realising thisgoal.

We appointed McKinsy and theproject has already begun.

We want to change the entireconcept of work-flow at the branch.We would like to make all our branchoutlets as marketing offices and pushall the time consuming routine workto a centralised back office.

The idea is to ensure that people atthe bank should be able to affordcustomer services in a much betterway. People at the branch will be in aposition to do marketing of productsand services. The idea is to makebusiness development faster which isturn will boost productivity andfinally, improve customer service.

Hence, we have now laid downnorms on how banking should bedone at a branch.

We have identified three branchesin Mumbai, namely Bandra, CrawfordMarket and Colaba and haveimplemented the project in thosebranches on a pilot basis. These threebranches are now working on the newconcept of customer service.

We have seen our ATM hits go up.We have a seen substantial number ofInternet-based transactionshappening in banking. So, thesepositive developments have alreadytaken place. We are trying to learnfrom our experience at the pilot whenwe roll it out across our entirenetwork.

What are your other agenda?Our balance sheet size till March,

’09 was at Rs 3,37,000 crore and it islikely to go up to Rs 4,05,000 crore byMarch, ’10. We see it to be at Rs 5,00,000crore by March, 2011. Fifteen lakhcustomers will be added to our fold byMarch, 2011. Our whole focus is on theliability side. Still, I am notcompromising on the quality ofassets.We are also expanding ouroverseas business. This year, we aregoing to recruit 3,500 people including2,000 officers. ◆


‘The whole idea ofbanking is changing’

MD Mallya, CMD, Bank of Baroda

Steered by Aditya Puri, managingdirector, HDFC Bank has grown at asteady 30%. He speaks with ShobhanaSubramanian and Saikat Das of theFinancial Express about interest rates,inflation and increasing deposit rates.Excerpts:

How do you see the base ratetaking shape?

The base rate is not going to changethe fundamentals of banking. Thebanks have been taking into accountthe tenure of the loan, the risk profile ofclients and the liquidity available whilelending. The RBI is saying it wantsgreater transparency than what theBPLR provided, possibly because a lotof lending has been done to the AAAcorporate at below the BPLR. Now, thisis a function of excess liquidity in themarket and also competition. So whathappens is that the person borrowing ahigher amount for a shorter tenure willget a cheaper rate. The base rate hasbeen defined as the bank’s base cost butthat’s not the base cost of the totaldeposits or of a deposit of any tenure.So a bank is free to take the base cost ofa 90-day deposit.

Will there be a big differencebetween the base rates of banks?

Normally, loans are priced eitherover marginal cost or over average cost.Both are safe. But for a new loan, banksuse the marginal rate so banks may optfor the marginal cost. I don’t thinkthere will be too much of a differencewhen the new system sets in, becausethe basic business hasn’t changed. Soit’s possible SBI may set it at 8%, PNBmay set it at 7%. The rate will movetowards the lower side rather than thehigher side. I don’t see interest ratesmoving up systemically. There mighthave been a systemic shift had RBI saidthat banks would have to use theaverage cost of deposits to calculate the

deposit cost. As for the marginal cost,banks may use the 90-day term depositor the 180-day term deposit rate.

Where do you see interest ratesheaded in the next few months?

Ten-year yield go up. Whetherinterest rates go up, depends onsentiment and how much they are ableto control inflation. The governmenthas clearly announced a lowerborrowing programme and so one canexpect a yield of between 8-8.5% if theymeet their commitment and dependingon inflation being higher than thattowards the end of the year. Quite a bitof the inflation is priced in the 8% andthe general expectation is that it may goto 8.5% by June-July. Unless somethinguntoward happens, yields should notgo up beyond this. In fact, short- andmedium-term rates, even up to one ortwo years, may not go up, sinceliquidity is still in excess of Rs 70,000crore in reverse repo, despite the hikein the cash reserve ratio. Some amountis there with the mutual funds as well.

Banks been raising deposit rates?What is your view?

We haven’t raised rates acrosstenures but for some shorter and somelonger tenure deposits, reflecting theincrease in rates in the system at thelong end. Even if we raise rates now,the actual momentum comes in onlyafter about three months with a lag andso by then we would have raised ratesby between 0.25 and 0.5%, which is thekind of increase we are expecting inoverall yields, not particularly short-term yields.

Would this increase hurt thedemand for loans?

No. The rates that you are seeingtoday for autos or homes are a functionof a slowing economy and excessliquidity. Car loans were at 9-9.5%, so ifthey move up back there, it’s not theend of the world. It’s hard to see a yearahead in today’s environment but wedon’t see any big move in interest rates.We need to see what happens onliquidity, inflation, private demand and


HDFC BANK � NEW PRIVATE SECTOR BANK � RANK: 1 � STRENGTH � RANK: 1 � GROWTH � RANK: 1

‘We are a delta on theIndian economy’

Aditya Puri, MD&CEO, HDFC Bank

23THE FINANCIAL EXPRESS � MARCH 2010 �

the GDP. We are seeing some pick-up incorporate borrowing but not a runawaypick up. This pick up is for workingcapital. Drawdowns on investmenthave not happened. Companies saythey are moving ahead on capex but wehave to see greater evidence of it. Retaildemand for the system as a wholehasn’t been great but we areexperiencing good demand. Ifproduction of cars increases by 30%,demand for car loans will alsoincrease. Actually, the demand forhome loans never faltered. IfGDP grows by 8%, credit de-mand can grow by about20% next year. HDFC Banknormally grows fasterthan the system.

What is the bank’simmediate termstrategy for growth?

We have just doubled ourcapacity and right now don’tneed to look further. We justdoubled our distribution

network from 725 to1,720 branches. Ourbusiness model is different, it’s basedon branches and that’s why we arecomfortable with retail loans and ourcost of funds. Not only is our CASAhigh, around 60% of our personal loansare sold through branches, and 70% ofour cards are sold to our customersthrough branches as well. They are anintegral part of our strategy.

HDFC Bank has anenviable CASA

ratio of 52%. Is this sustainable?No, it’s not sustainable. The reason

we have 52% CASA is because depositshave been growing slowly, so there’s thedenominator effect and once growthpicks up we will need to borrow morefixed deposits. I would say our normalrange for CASA is between 45 and 48%.Our asset growth is a function of GDPgrowth, so if GDP grows at 8%, themarket will grow at 22-23% and we’llgrow by 2-3 % more than that.

Is the bank looking for aninternational presence?

Our international business is basedon our strengths in India. We havecorrespondent arrangements withpeople all over the Middle East andother parts of the world and are majorplayers in NRI remittances. Essentially,we are a delta on the Indian economy. ◆


AXIS BANK � NEW PRIVATE SECTOR BANK � RANK: 2

It’s about a year since ShikhaSharma took over the reins at AxisBank. In conversation with ShobhanaSubramanian, the MD and CEOobserves that while new bankinglicences will help grow the market andbenefit customers, much would alsodepend on the kind of players whocome in. Excerpts:

What are your thoughts on thebase rate?

What the Reserve Bank is trying todo is to bring in more transparencyand one of their concerns is thatpolicy rates are not being transmittedto all lenders. So that’s the attempt.

I think as opposed to the PLR, whenthere were huge differences, whichgot narrowed out through discounts

below the PLR now, because youcannot lend below the base rate, I

suspect there will be a

narrowing. So definitely base rateswill be in a more narrow range butthere will be differences based onbanks’ strategies. I think anassessment of where the base ratescan settle will have to be decidedcloser to the date of implementationin July.

Do you think banks will choose themarginal cost or a weightedaverage cost to fix the base rate?

It might be difficult for a bank to fixthe base rate based on the basis ofweighted average cost because it mayalready have assets, which are lockedin based on the historical cost offunds. So the marginal cost has tohave higher weightage while settingthe base rate. Especially if the bankhas relatively well-matched assets andliabilities, then the future isdetermined more by the marginalcost. If there are some mismatchesbetween the assets and liabilities,then perhaps the strategy may besomewhat mixed.

The government plans to give newlicences. Do you think that’s a goodidea?

Competition is always good for thecustomer but it also depends on thekind of competition. The regulatorshould ensure that there is a level-playing field between the old and thenew in terms of regulatorycommitments. It depends on whatkind of players come into the market;if we have players who have a trackrecord and the desire to build a long-term high quality banking business, itwill be good for the market because itwill inevitably grow the market. Thegood thing about being in India is thatwe are in a high growth phase, soanything that taps that opportunityand expands the market is good. But,as I said, nothing is absolute. It all

depends on the kind of players whocome in.

How does Axis Bank plan to tap theprosperity in the rural markets?

Compared to our peers, Axis Bankhas more of a presence in the tier IIand tier III towns. So we do have somelearnings, which we can use goinginto rural areas, but we don’t reallyhave a full-fledged model to take to therural markets just now. Withregulatory changes that havehappened and mobile technologybecoming more mature, I think it istoday possible to come up with anappropriate model for the ruralmarket.

There are of course policyinitiatives being taken to have morefinancial inclusion but, if you look atthe economy, a lot of real industry isfinding that their growth is comingfrom rural markets. So the ruralmarkets are definitely the markets ofthe future. So it’s something that weare focussed on and we willexperiment with a couple of models.

How do you see the role of banks ininfrastructure financing?

We are a significant player in thisspace. Nobody has any doubt thatIndia will see strong growth ininfrastructure, and if we are bankssitting in India, we have to growwhere growth is going to come from.So if infrastructure is going to growfaster than GDP, then we have to beopen to lending to the sector, I thinkthere is no a choice.

Axis Bank has strengths in thisarea, so if it’s a high opportunity areaand we have strengths, we are not atall embarrassed about going there.The question is how do you manageboth, concentration risk and interestrate risk? One thing we do is to lend tomultiple projects across geographiesand sectors.

Also, much of the lending is done ata floating rate. So while they are of along tenure, we don’t have a pricingmismatch issue, the loans get re-priced. The valid question is that itcould get translated into a credit riskbecause of the floating rate. That’ssomething we take of when we do theappraisal. ◆


‘Competition is alwaysgood for the customer’

Shikha Sharma, MD&CEO, Axis Bank


FEDERAL BANK � OLD PRIVATE SECTOR BANK � RANK: 1

South India basedFederalBank has had a consistenttrack record of growth

and profitability. Being afocussed bank, it has stuck to

its strengths. The bank now wants to expand its operational scope greogrpahically and alsothrough product development.M Venugopalan, chairman, FederalBank speaks with Saikat Das andAkash Joshi of the Financial Expressabout financial inclusion, the banks efforts towards reaching out and imparting financial education.Excerpts:

In line with increased governmentfocus on financial inclusion, whatefforts are you moving on thatfront?

Our bank has currently 676branches across the nation. In Keralaitself, it has 391 branches, of which,40% are in rural areas. All branchesare connected under the core bankingsystem. The bank has currently 724ATMs and has issued 2,910 generalcredit cards, with a balance of Rs577.59 lakh till December 31, 2009.

We have been trying for theintegrated development of villages. Inthe last calendar year, we developed 10villages. In the current year, we havetaken up 15 villages till March. Theadoption of villages has been doneunder the Samrudhi scheme. We helpthem plan activities beneficial to theholistic development of villages. InKerala, every family is covered by abank account.

Could you tell us about theSamrudhi scheme?

‘Samrudhi’ is a unique

programme aimed at fulfilling theentire banking needs of the residentsof a Grama Panchayat by makingavailable the entire range of bankingproducts or services offered by thebank. This is so that these villagescan be developed into model GramaPanchayats through the businessfacilitator model in association withKudumbashree (Kerala State PovertyEradication Mission) CommunityDevelopment Societies and reputedNGOs.

The scope of Samrudhi wasenhanced recently through theSamrudhi Financial ManagementProgram (SFMP). It aims to helpimprove the financial self-relianceand well being of villages,individuals, families andcommunities. The social schemeprovides disadvantaged villages,individuals, families andcommunities who are financiallyvulnerable or at risk of becomingfinancially vulnerable, with the toolsand resources to manage a financialcrisis and overcome hardship.

How do you propose to use IT infinancial inclusion?

Our credit card products are ITenabled. Kisan Credit Card (KCC)accounts are ATM enabled with the‘Federal Haritha Card’. The GeneralCredit Card (GCC) is also ATMenabled. The bank is in the process ofintroducing the ICT-based bankingcorrespondent model in the AlleppeyDistrict of Kerala. We are planning tointroduce certain new products onmobile banking as well in the nearterm.

What are the initiatives you have

undertaken towards impartingfinancial education?

We have launched a trustchristened "Federal Ashwas" for theestablishment and running of"Federal Ashwas Financial Literacyand Credit Counselling Centres"(FAFLCC) and three FAFLCC centreshave already started functioning inthe Alleppey District.

We are in the process ofestablishing the ‘Federal Bank -YMCA Training and GuidanceCentre’ in the Wynad district, Kerala,in association with the YMCA. Thisfacility will be used by the bank toprovide training to micro and smallentrepreneurs.

What credit growth are youcurrently registering?

In the last 10 months during thecurrent fiscal, Federal Bank attaineda credit growth of 21% (including thesegments of SME, retail andcorporate) surpassing Reserve Bank’stargeted credit growth of 16%. Ourbank expects to attain a credit growthof 23% by March 31.

What business expansion plans doyou have?

As per the proposed branchexpansion policy, we aim to openaround 60 more branches all overIndia in FY 2010-11.

The bank, which has only arepresentative office in Abu Dhabi,has plans to go global. It might beseeking regulatory permissions in themiddle term for the same. However,we are yet to take any concretedecision on this. Further, we are opento any potential acquisition at areasonable price. It is high time theIndian banking industry go in forconsolidation.

What are your future goals?We have a set of three-pronged

objectives. Firstly, we want to beidentified for niche products like SMEbanking.

Secondly, we want to be Kerala’sNumber 1 bank, surpassing the StateBank of Travancore, and finally, wewant to emerge as a prominent lenderin the industry for the commonpeople. ◆


‘We want to emerge asa prominent lender tothe common man’

M VENUGOPALAN, Chairman, Federal Bank

TAMILNAD MERCANTILE BANK � OLD PRIVATE SECTOR BANK � RANK: 2


G Nagamal Reddy, MD & CEO,Tamilnad Mercantile Bank speakswith Sajan Kumar of the FinancialExpress about being a small bank withmore regional flavour, where TMBstands in the changing atmosphere, thecontroversy over the ownership issue ofthe bank and other things. Excerpts:

Being a small bank with a moreregional flavour, what kind ofbusiness focus do you have interms of retail and corporate?

Small-sized banks contributesignificantly to the total market shareof scheduled commercial banks. Ourregional presence and sense ofbelonging have given us a primeposition.

TMB is concentrating on buildingsafer and more remunerative assets.Our strategy is to focus on corporateand retail business, which would fetcha mix of quality and high yieldingassets. Our incremental CD ratio overMarch 2009 works out to 136%, whichshows our aggressive growth inadvances. Plans are on to openspecialised branches at metros to takefocussed care of the creditrequirements of corporateestablishments. The bank already hasa lending portfolio of 37% tocorporate credit. The bank hasalready built a retail asset portfolio of63%. The bank has 24 retail schemesin the market and four or fiveschemes, including home, education,car and SME credit.

In the retail segment, the bankfinds huge opportunities and thedelinquency rate is considerably lessdue to its cautious approach. Webelieve that through identifyingcredit-worthy retail proposals, thebank can expand its retail creditwithout being aggressive. The bankidentified retail as one of the strategic

areas for growth. The speed indelivering corporate and retail creditis another areas the bank has plannedto concentrate on. The bank has alsoentered into a MoU with CRISIL forrating SME borrowers.

How are you planning to improveyour net interest margins?

The bank witnessed a net interestmargin of 3.55% as on February 28,2010, which is due to the increasedfocus on building low cost liabilitiesand high yielding assets in SME andretail sectors.

CASA has improved by 19% whencompared to the previous year endedMarch 31, 2009. The credit to the retailsector has also grown by 24%. The netprofit of the bank has improved by16% up to February 2010. The fullresults of various initiatives areexpected to reflect in the bank’scurrent year balance sheet.

How difficult is for you to raise lowcost deposits since you don’t havemuch of a branch network?

As the spread started thinningfrom 3.53% in the year 2008 to 3.37% inthe year 2009, the bank decided toimprove the CASA component, whichwill help in bringing down the cost ofdeposits. The necessity of enhancingthe CASA deposits to improve thebottom line of the bank percolateddown to the people in the branch leveland permeated the organisation.CASA has become the mantra of thebank. As the bank has 216 branchesacross the country, the mantra ofCASA was echoed in 12 states and inthe hearts of 2,250 TMBians. As aresult, the bank was able to mobiliseRs 402 crore of CASA deposits, anincrease of 19% growth over March2009, which works out to 24% of thetotal deposits with the existing

branch network.During the next fiscal we would

also provide special focus for CASA bygiving specific targets to rural andsemi urban branches to canvass SBdeposits aggressively, whereas metroand urban branches would be urged toconcentrate on current accounts.Corporates would be approached forcanvassing salaried accounts with abouquet of services leveraging thefullest use of technology: anywherebanking, RTGS, NEFT, debit card, netbanking, e-payment etc.

How is the year shaping up? A thorough understanding of the

prevailing market and customers’changing requirements, expectationsand the efforts taken by employees atall levels to meet the expectations ofcustomers, as well as the preparationto expand the revenue streams forsustainable growth, would work wellfor building a new brand image andhealth for the bank.

The various initiatives taken by thebank to improve the fee-based incomewill boost the bottom line of the bankin the current year. Due to the focus onbuilding a higher level of efficiencyand strengthening the margin bycutting the proportion of high costdeposits and the size of low yieldingassets, the bank added 1,86,000 newcustomers. The bank is harnessing itsstrength of technology. Customersexpect a major change in our bankboth in terms of capital structure andservices,

Has the controversy over theownership issue been settled?

Since the new board is in place andthe pending AGMs for the years 2008-2009 have also been held, I feel that theownership issue is resolved by thecompetent court. With enhancementin the level of corporate governanceafter holding the AGMs and stabilityin its operations and consistency inearnings, the bank will be able toprovide better value addition to itsstake holders.

Efforts will be made to make thebank more dynamic, in the sense thatit will be adjudged not only as the bestbank but also the fastest growingbank under each parameter. ◆


‘Small-sized banks playa significant role’

G Nagamal Reddy, MD&CEO, Tamilnad Mercantile Bank


JP MORGAN CHASE � FOREIGN BANK � RANK: 1 � EFFICIENCY � RANK: 1

In India, JP Morgan runs variousbusinesses like providing companieswith cash management services, tradefinance and custody services,investment banking, helpingcompanies raise debt and equity.Speaking with MahalakshmiHariharan from The FinancialExpress, Kalpana Morparia, CEO,JP Morgan says the bank intends tostay within its niche segment ratherthan try to compete with its larger peerswho are retail-focussed. Excerpts:

Which are the businesses that youwould like to focus on in India?

In India, we run the investmentbanking division, asset managementand wealth management business andtreasury securities and services.Within the treasury securities andservices, it is normally transactionbanking and custody, giving aplatform to corporates and investorsfor cash management, trade financeand custody business. Investmentbanking comprises of the marketsbusiness, constituting fixed incomeand commodities. This includesproprietary trading, client flows,forex flows and forex derivatives,followed by the equity institutionalbroking business. These are a part ofour markets related businesses. Then,we have a small principle investmentbusiness where we commit JPMorgan’s capital to take positions inequity, hybrid and high yield debt for

Indian companies. We also have alarge corporate finance and

coverage business, whichcovers equity capital

markets (ECM),derivatives

collateral

management (DCM) and mergers andacquisitions (M&A). We have theglobal corporate bank, which is a jointventure between investment bankingand transaction banking.

What does your client base looklike? Which are the products andservices that you cater to?

On the corporate side there aremulti-national corporations (MNCs)operating in India. The smallcorporate businesses have affiliatesand subsidiaries in India, who needcoverage for cash management toremittances, sometimes even to crediton the back of their parent support. Ifyou think about several largecompanies that have theirsubsidiaries here, we would be thetypical banker that would cover them.The second part is Indian companiesthat are increasingly globalising. Thisis because they are in constant need ofacquisition financing, funding fortheir overseas businesses, managingcash across geographies and acrosstrade finance and currencies. So, onthe transaction banking side, there iscash management and trade financeacross the board.

The third set of clients are what Icall ‘local local’. There may not be abig cross border angle to it but thereason why we would cover them andwould give them transaction bankingand credit is because we see we canadd a lot of value to them on a purelycorporate finance side. When theywant to raise capital or do an M&Atransaction, we would help them out.On the investor side, we deal a lot withall the major funds. We have arelationship with a lot of fund housesthat are investing across the globe. We

cover them through ourcustodian business

and the

institutional broking business. So, wehave a dedicated sales force, which notonly covers Indian funds that arededicated to investing in India oremerging markets that are investingin India but also global funds who caninvest in India but don’t necessarilyhave a dedicated vehicle to accessnotes or eventually a registrationwith the Securities and ExchangeBoard of India (Sebi).

Are you looking at entering theretail space?

We believe that retail banking issomething that you can cover out ofmass banking. We believe that Indianbanks have a very unique propositionto deal with the customers inmanaging deposits, mortgages, autocredit and also understanding thecustomer. The kind of distributionthat they have and their ability tobuild a great recovery mechanism isalso something very unique. Thus, wefeel that they will always be superiorto foreign banks. The only thing wethink that we can really capture in theretail space is remittances comingfrom the US into India and to thatextent we may look at having a retaildeposit taking franchise if my branchlicense approval allows me to do so.We will be a niche player in thissegment. Retail credit is notsomething we are looking at.

What are your hiring plans?We have two sets of employees in

the bank-one is the business, which isless than 500 people and I don’t seethat growing beyond a little over thatnumber. The other is off-shoring,where we will continue hiring.

What is your share in the market?We track our market share across

all our businesses. In some of thetransaction banking business andDCM businesses that we do, we look atthe market share in context withforeign players.

Last year, we were the number oneplayer across the ECM business. Inthe institutional broking business, wewere in the top four. In the M&A space,not too many deals happened last year,but we believe we would have been inthe top two or three. ◆


‘We will cater with a suite of services’

KALPANA MORPARIA, CEO, JP Morgan

In the recent past, Citibank Indiahas managed to tide over the globalfinancial crisis and build a strongbusiness in India and has alsoparticipated in several landmarkdeals. Speaking with ShobhanaSubramanian and MahalakshmiHariharan of the Financial Express,Mark T Robinson, CEO, Citi revealshis plans for the future. Excerpts:

How has the year 2009 been for thebank? What will Citi focus on in2010?

I would characterise 2009 as a yearwhere we repositioned our businessesto capture the opportunitiespresented by the growing Indianeconomy in the years ahead. We drewup a strategic plan with an emphasison the sectors where we saw ournatural strengths. Our businesses arefit to be executed with our expansionplans. Much of this is consistent withwhatever is happening in Citi globally.We will be growing our securities andbanking business and transactionbanking business in the InstitutionalClients Group.

We consider the local commercialbank catering to the middle marketsegment as a key to our future growth,as also the retail consumer bank,where we are focussing on a well-calibrated growth strategy, includingliabilities and asset products.

We continue to provide a strongercustomer-centric value proposition toour retail wealth management andcredit cards businesses, includinginvesting in world-class technologyplatforms.

What will your strategy be in thecorporate and retail lendingspaces?

We allocate capital based on acareful evaluation of overall returnson a risk and to this end we review the

returns from our asset products andthe cross-sell it generates at a firmlevel. Our retail and corporate lendingstrategies are driven by this approach.Even during the peak of the globalcredit crisis we were open forbusiness and continued to grow assetsjudiciously in our target segments.

We will continue to meet the needsof our corporate clients through acombination of balance sheet itemsand innovative structures.

On the retail banking front, wefollow the principles of prudentlending and providing value addedand innovative cards and assetproducts to our customers. Our statedobjective is to be the industry-leadingpremium, high quality, efficientbanking franchise.

By how much are you looking togrow your balance sheet?

We are committed to growing ourcorporate relationships andsupporting their fundingrequirements on balance sheetlending as well as other forms ofcapital raising. We remain focussedon our key target consumer marketswith products and services that bringvalue to our retail customers. Wecontinue to go slow on unsecuredretail credit, including credit cards innon-target segments.

Will capital be a constraint forgrowth? What would be the shareof CASA in your deposits and thecost of funds?

Capital has never been a constraintto our growth in India. Over the lastfew years we have consistentlyretained our earnings and infusedclose to $1.8 billion of capital in thefranchise between the bank and otherlegal vehicles. In addition to thecapital that we deploy in our bankingbusiness, we are committed to

substantial capital for proprietaryinvestments. We are amongst the bestcapitalised banks in the industry asindeed are our non-bank financecompanies.

With respect to the cost of funds, wehave rigorous parameters forstructural liquidity and lay a lot ofemphasis on CASA and other non-interest bearing sources. These cometo us through our transaction bankingbusiness and the consumer businessand we deploy this liquidity with ajudicious modelling of cost criteria tomanage our balance sheet risk.

Which are the areas that you areactively lending to? What’s yourshare in the secured andunsecured segments?

It is very difficult to provide youwith an accurate assessment ofmarket share in the secured andunsecured segment. However, we areseeing a steady shift to securedlending in our consumer portfolio,whereas in the corporate portfolio,lending is based on a carefulevaluation of collateral, cash flows,obligor quality and other criteria.

Your views on growth and interestrates and the base rate system? Doyou anticipate rate hikes in thenear future?

I feel that the recent budget hasprovided a very balanced approach togrowth while providing for a steadywithdrawal of the stimulus packages.The Reserve Bank of India is facedwith a situation where growth isaccelerating, as is inflation. I thinkRBI will continue to display thebalance it always has in adjustingthese monetary instruments tomaintain the right balance. I do expectthat in the short term there could bemodest hikes in the reference ratesbut the flow of credit to the economywill be satisfactory.

The base rate is an interestingdevelopment and should contribute totransparency of lending rates tovarious customer segments of anindividual bank in line with theircredit and other characteristics, whilemarket forces work towards aconvergence of base rates acrossbanks. ◆


CITI � FOREIGN BANK � RANK: 2 � PROFITABILITY � RANK: 1

‘We wish to be anefficient franchise’

MARK T ROBINSON, CEO, Citi

INDUSIND BANK � CREDIT QUALITY � RANK: 1


Romesh Sobti, MD & CEO, Indus-Ind Bank, speaks with Saikat Das ofthe Financial Express regarding thebank’s growth, its risk managementpractices and its hiring plans, amongother things. Excerpts:

What kind of growth have youwitnessed in your business?

We have a total balance sheet ofRs 33,000 crore, wherein advances areRs 19,000 crore. We will probably endup with a 27-28% loan growth byMarch, 2010. We are expecting a creditgrowth of 25-30% in FY2011. Ourcredit growth will be evenlydistributed across corporate andconsumer lending, including vehiclefinancing. While 60% of our loan bookis corporate, 40% is retail. Under theretail part, we finance 40,000 vehiclesevery month, including two/threewheelers, commercial vehicles andoff-the-road construction vehicles.

We have a wide distributionnetwork and inherited this structurefrom the merger of Ashok LeylandFinance. We are small in the home andcommercial vehicle segments.

How focussed is the bank on riskmanagement practices?

All areas of risks, including creditrisk, operational risk and market riskmust be well-managed. The growthunder IndusInd comes under the riskmanagement umbrella.

You must have the infrastructure tomanage risks and to support yourgrowth.

I have seen many financialTsunamis like this in my 35-yearcareer. The lessons from this boilsdown to the fact that if you arerunning a growth organisation, firstput up the risk management pillars:market risk and operational risk. Riskmanagement has to be harsh.

Are you expanding your branch

network? We have plans to open 120-150 more

branches by March, 2011 adding to ourexisting 210 branches across India.For half of these new branches wedon’t need RBI’s approval. The latestregulations have given banks thefreedom to open branches in the tierIII and tier IV centres with populationbelow 50,000 without seekingpermission from the Central Bank.We are focussed on the north, westand south. We have a presence in theNorth East as well.

Are operations in remote placesprofitable?

It can be profitable. If you treatfinancial inclusion as an obligation tobe met at the end of the year, then it isa loss making proposition. But if youwork on it through out the year as abusiness plan, it can be profitable.

Financial inclusion, unless it isembedded in business, is a loss-making proposition. We are strong inthe area of micro financing. We give alot of three wheeler loans in ruralareas. We provide loans to villagewomen through micro-financingschemes. We have zero delinquencies.

What are the bank’s hiring plans? We have always remained robust in

hiring. In 2008-09, we hired 1,500people. In 2009-2010, we hired 900people. By the end of the next fiscal,we plan to hire 700 people for branchbanking and 900 in the area ofconsumer banking (sales operationsand risk management).

Most of our hiring is done through"Indus Parichay" (our ownrecruitment scheme), employeereference programme and throughhead hunters, which constituted 12%of total recruitment the last time.

For our consumer banking we willhire more. We call it ‘feet on street’,under which we recruit sales people.◆


‘Financial inclusionplans are profitable’

Romesh Sobti, MD&CEO, IndusInd Bank

Punjab National Bank Bank of Baroda Indian Bank Corporation BankBank of India Union Bank of IndiaState Bank of Travancore Oriental Bank of CommerceState Bank of IndiaCanara Bank Punjab & Sind BankAndhra BankIndian Overseas Bank Syndicate BankState Bank of HyderabadIDBI Bank Allahabad Bank Dena BankState Bank of Bikaner & Jaipur State Bank of PatialaCentral Bank of IndiaUCO Bank State Bank of IndoreBank of MaharashtraState Bank of MysoreUnited Bank of IndiaVijaya Bank

HDFC Bank Axis Bank YES Bank ICICI Bank Indusind Bank Kotak Mahindra Bank

Federal Bank Tamilnad Mercantile Bank Karur Vysya Bank City Union Bank Jammu & Kashmir Bank Dhanalakshmi BankSouth Indian Bank Karnataka Bank Lakshmi Vilas Bank ING Vysya Bank Bank of Rajasthan Catholic Syrian Bank Development Credit Bank

JP Morgan Chase BankCiti Bank of AmericaBarclays BankStandard Chartered BankDBS BankCaylon BankBNP Paribas HSBCBank of Nova ScotiaDeutsche BankABN Amro Bank

Best Nationalised Banks1524

109

1211

36.5221614171825

8211520

6.5262423271319

146253

15693824

1211

71013

82.5

6157

129

2.511

410

52

1310

43

17.58197

17.5201514

624.5

1223162611

24.519212227

123645

3584917

1026

121113

75

11132

104689

12

183

6.5245

2113141210

6.518152717

9112226251620192423

213465

4.5231

4.5976

1312

81110

123

1157468

109

12

9362147

1014111315

82012

51819211626241725222723

431265

15432876

139

101211

2419

11837

1065

12

1.5456

2022

31.52624

89

271019131721181411

71615122523

432615

612593

11847

101213

29476538

121

1110

123456789

101112131415161718192021222324252627

123456

12

3.53.5

56789

10111213

123456789

101112

Strength &Soundness Growth Profitability Efficiency

CreditQuality

Final Rank2009Name

� THE FINANCIAL EXPRESS | MARCH 201038

Best New Private Sector Banks

Best Old Private Sector Banks

Best Foreign Banks

SEGMENT-WISE LEADERS�

HDFC Bank Punjab National Bank Barclays BankIndian Bank Corporation BankICICI Bank Federal Bank State Bank of IndiaState Bank of Travancore United Bank of IndiaHSBCCiti Bank of Baroda Canara Bank Kotak Mahindra Bank Central Bank of IndiaAllahabad Bank Bank of India Tamilnad Mercantile Bank Union Bank of IndiaJammu & Kashmir Bank Deutsche BankSouth Indian Bank Axis Bank Oriental Bank of CommerceKarur Vysya Bank Karnataka Bank Standard Chartered BankDhanalakshmi BankIndian Overseas Bank State Bank of Bikaner & Jaipur Syndicate BankJP Morgan Chase BankAndhra BankState Bank of HyderabadDBS BankVijaya BankBank of AmericaCity Union Bank YES Bank State Bank of PatialaPunjab & Sind BankDena BankState Bank of MysoreUCO Bank Bank of MaharashtraIndusind Bank State Bank of IndoreCatholic Syrian Bank Bank of Rajasthan IDBI Bank Development Credit Bank Lakshmi Vilas Bank Bank of Nova ScotiaBNP Paribas Caylon BankING Vysya Bank ABN Amro Bank

123456789

10111213141516171819202122232425262728293031323334

35.535.5

3738

39.539.5

41424344454647

48.548.5

505152535455565758


HDFC Bank Barclays BankAxis Bank Dhanalakshmi BankState Bank of IndiaBank of Baroda Union Bank of IndiaIDBI Bank Bank of India Punjab National Bank Lakshmi Vilas Bank YES Bank Oriental Bank of CommercePunjab & Sind BankCanara Bank Corporation BankUCO Bank Dena BankFederal Bank City Union Bank Indian Bank DBS BankState Bank of HyderabadIndusind Bank State Bank of PatialaTamilnad Mercantile Bank Syndicate BankState Bank of Travancore Andhra BankING Vysya Bank Bank of MaharashtraSouth Indian Bank Indian Overseas Bank BNP Paribas State Bank of MysoreCiti JP Morgan Chase BankStandard Chartered BankState Bank of Bikaner & Jaipur United Bank of IndiaState Bank of IndoreAllahabad Bank HSBCKarur Vysya Bank Central Bank of IndiaBank of Nova ScotiaJammu & Kashmir Bank Caylon BankVijaya BankKarnataka Bank Deutsche BankCatholic Syrian Bank Bank of AmericaBank of Rajasthan Kotak Mahindra Bank ICICI Bank ABN Amro BankDevelopment Credit Bank

123456789

10.510.5

121314151617181920212223242526

27.527.5

2930.530.5

323334353637

38.538.5

404142

43.543.5

4546474849505152535455565758

Citi Standard Chartered BankHSBCJP Morgan Chase BankBank of India Caylon BankPunjab National Bank DBS BankIndian Bank Bank of AmericaDeutsche BankBNP Paribas Axis Bank Union Bank of IndiaState Bank of Travancore YES Bank HDFC Bank Corporation BankBank of Nova ScotiaCity Union Bank Indian Overseas Bank Tamilnad Mercantile Bank Federal Bank Dena BankBank of Baroda Jammu & Kashmir Bank Karur Vysya Bank Andhra BankState Bank of Bikaner & Jaipur Punjab & Sind BankState Bank of IndiaState Bank of HyderabadCanara Bank State Bank of IndoreKarnataka Bank Syndicate BankABN Amro BankAllahabad Bank South Indian Bank Dhanalakshmi BankBank of MaharashtraState Bank of MysoreBarclays BankOriental Bank of CommerceICICI Bank Kotak Mahindra Bank State Bank of PatialaING Vysya Bank Bank of Rajasthan Vijaya BankUnited Bank of IndiaLakshmi Vilas Bank UCO Bank Catholic Syrian Bank Central Bank of IndiaIndusind Bank Development Credit Bank IDBI Bank

Strength and SoundnessRank

Name 2009

GrowthRank

Name 2009

ProfitabilityName

TOPPERS OF THE FIVE KEY PARAMETERS �


123457779

101112131415161718192021222324

25.525.5

272829303132333435363738394041

42.542.5

444546474849505152535455565758

JP Morgan Chase BankBank of AmericaCaylon BankDBS BankBank of Nova ScotiaCiti Deutsche BankBNP Paribas HSBCStandard Chartered BankFederal Bank Axis Bank Bank of India YES Bank Corporation BankBarclays BankICICI Bank IDBI Indian Bank Tamilnad Mercantile Bank Bank of Baroda Karur Vysya Bank Union Bank of IndiaPunjab National Bank State Bank of Travancore Jammu & Kashmir Bank City Union Bank Indian Overseas Bank ABN Amro BankHDFC Bank Oriental Bank of CommerceCanara Bank Punjab & Sind BankState Bank of HyderabadAndhra BankKotak Mahindra Bank State Bank of IndiaKarnataka Bank State Bank of IndoreState Bank of PatialaSouth Indian Bank Allahabad Bank Dena BankIndusind Bank Syndicate BankState Bank of Bikaner & Jaipur Dhanalakshmi BankState Bank of MysoreVijaya BankUCO Bank ING Vysya Bank Development Credit Bank Bank of MaharashtraCatholic Syrian Bank Central Bank of IndiaBank of Rajasthan Lakshmi Vilas Bank United Bank of India

123456789

101112131415161718

19.519.5

21222324252627

28.528.5

3031323334353637383940414243444546474849505152535455565758

Indusind Bank Bank of Nova ScotiaPunjab National Bank Oriental Bank of CommerceBank of Baroda State Bank of Travancore Indian Bank Corporation BankTamilnad Mercantile Bank JP Morgan Chase BankAndhra BankUCO Bank Syndicate BankPunjab & Sind BankCaylon BankCentral Bank of IndiaBank of AmericaDhanalakshmi BankState Bank of MysoreIDBI Bank Karur Vysya Bank Lakshmi Vilas Bank YES Bank State Bank of PatialaBank of MaharashtraAllahabad Bank DBS BankCity Union Bank Axis Bank ING Vysya Bank State Bank of IndoreState Bank of Bikaner & Jaipur Federal Bank Bank of India State Bank of HyderabadDena BankUnion Bank of IndiaHDFC Bank Karnataka Bank Bank of Rajasthan Vijaya BankSouth Indian Bank BNP Paribas Jammu & Kashmir Bank Canara Bank Standard Chartered BankCatholic Syrian Bank United Bank of IndiaKotak Mahindra Bank State Bank of IndiaDeutsche BankHSBCIndian Overseas Bank Barclays BankCiti Development Credit Bank ABN Amro BankICICI Bank

123456789

10111213141516171819202122232425262728293031323334353637383940414243444546474849505152535455565758

Rank2009

EfficiencyRank

Name 2009

Credit & QualityRank

Name 2009

Punjab National Bank Indian Bank State Bank of IndiaCorporation BankBank of Baroda Canara Bank Central Bank of IndiaAllahabad Bank Union Bank of IndiaBank of India Oriental Bank of CommerceState Bank of Travancore United Bank of IndiaIndian Overseas Bank State Bank of Bikaner & Jaipur Andhra BankSyndicate BankState Bank of HyderabadVijaya BankState Bank of PatialaDena BankPunjab & Sind BankBank of MaharashtraState Bank of IndoreIDBI Bank UCO Bank State Bank of Mysore

HDFC Bank ICICI Bank Kotak Mahindra Bank Axis Bank Indusind Bank YES Bank

Federal Bank South Indian Bank Jammu & Kashmir Bank Karnataka Bank Tamilnad Mercantile Bank Karur Vysya Bank Bank of Rajasthan Dhanalakshmi BankCity Union Bank Catholic Syrian Bank ING Vysya Bank Lakshmi Vilas Bank Development Credit Bank

Barclays BankCiti HSBCDeutsche BankStandard Chartered BankBank of AmericaDBS BankJP Morgan Chase BankBNP Paribas ABN Amro BankBank of Nova ScotiaCaylon Bank

14.03 13.98 14.25 13.61 14.05 14.10 13.12 13.11 13.27 13.01 12.98 14.03 13.28 13.20 14.52 13.22 12.68 11.53 13.15 12.60 12.07 14.35 12.05 13.46 11.57 11.93 13.38

15.6915.5320.0113.6912.3316.60

20.22 14.76 14.48 13.48 16.10 14.92 11.50 15.38 12.69 12.29 11.65 10.29 13.30

17.07 13.23 15.31 15.25 11.55 12.73 15.70 15.90 12.37 12.66 13.38 13.20



Best Foreign Banks


CapitalAdequacy

%

6.583954

1718131920

6.51215

1142127162223

22410262511

341562

1 5 6 7 2 4

12 3 9

10 11 13

8

1745

12932

1110

68

Ranks

8.98 11.88

9.38 8.90 8.49 8.01 6.97 8.01 8.19 8.91 9.10 8.59 7.56 7.88 8.46 8.67 7.85 7.14 7.74 6.94 6.76 8.44 6.11 7.91 6.81 6.48 7.37

10.58 11.84 16.13

9.26 7.52 9.50

18.42 13.22 13.80 10.60 15.38 14.40

6.19 13.75 11.48

8.81 6.89 8.81

11.50

16.62 12.42 14.12 14.62

7.99 11.23 10.27 15.38

8.38 7.43

10.42 9.80

Core Capital

%

41269

14221312

538

191610

71721182325112715242620

321564

164923

1358

10.512

10.57

1543

11682

1012

79

Ranks

(1,125,013)(727,821)

(8,667,250)(95,199)

(4,069,497)(1,795,288)

(656,504)(447,020)

(1,147,456)(2,417,920)(3,351,816)

589,507 393,839

(1,544,687)(778,361)

(1,479,751)(2,919,323)

(158,981)(2,363,560)(1,032,900)

(512,190)(851,198)(914,269)(446,100)

(4,472,410)(2,434,730)

(326,585)

3,084,372 (6,928,887)

(109,579)(2,724,561)

279,151 (685,138)

(675,537)59,195

(213,932)(207,506)(131,748)(293,838)

105,955 (113,251)(152,497)

39,729 (347,057)

(78,067)(122,583)

391,562 (281,650)

(1,071,858)(169,607)(174,146)

179,800 1,708

(175,827)105,970

(811,801)70,612 24,983

LiquidityRs Lakhs

151027

32519

97

162124

12

18111723

42014

81213

62622

5

163524

132

1097

111583

1246

11012

782693

1145

Ranks

Best Nationalised Banks

NameRank2009

12345

6.56.5

89

101112131415161718192021222324252627

123456

123456789

10111213

12.52.5

456789

101112

CATEGORY � STRENGTH & SOUNDNESS

2.09 0.73 7.24 2.80 2.93 3.78 0.61 1.10 2.80 5.00 0.73 1.92 0.84 6.54 2.00 2.21 1.89 3.79 1.14 1.51 0.12 7.82 0.36 3.19

39.52 2.06 8.39

1.88 30.83 37.74

8.68 8.40

13.54

2.33 1.42 3.02 0.02 0.34 0.15 0.01

- - -

8.65 0.44 7.44

18.67 35.93 16.55 25.45 15.84 51.86 41.46 96.10 84.82 59.16

102.31 523.98

BorrowingDeposit

%


123456.56.589101112131415161718192021222324252627

123456

12345678910111213

12.52.5456789101112

Punjab National Bank Indian Bank

State Bank of IndiaCorporation Bank

Bank of Baroda Canara Bank

Central Bank of IndiaAllahabad Bank

Union Bank of IndiaBank of India

Oriental Bank of CommerceState Bank of Travancore

United Bank of IndiaIndian Overseas Bank

State Bank of Bikaner & Jaipur Andhra Bank

Syndicate BankState Bank of Hyderabad

Vijaya BankState Bank of Patiala

Dena BankPunjab & Sind Bank

Bank of MaharashtraState Bank of Indore

IDBI Bank UCO Bank

State Bank of Mysore

HDFC Bank ICICI Bank

Kotak Mahindra Bank Axis Bank

Indusind Bank YES Bank

Federal Bank South Indian Bank

Jammu & Kashmir Bank Karnataka Bank

Tamilnad Mercantile Bank Karur Vysya Bank

Bank of Rajasthan Dhanalakshmi Bank

City Union Bank Catholic Syrian Bank

ING Vysya Bank Lakshmi Vilas Bank

Development Credit Bank

Barclays BankCiti

HSBCDeutsche Bank

Standard Chartered BankBank of America

DBS BankJP Morgan Chase Bank

BNP Paribas ABN Amro Bank

Bank of Nova ScotiaCaylon Bank

Ranks2009Name

144.524

16.51820

37

16.522

4.511

62312151021

891

252

19271326

156324

109

115764222

138

12

3524176

1098

1112

Ranks

24,691,862 8,412,175

96,443,208 8,690,581

22,740,673 21,964,580 14,765,522

9,764,801 16,097,551 22,550,177 11,258,259

4,946,051 6,204,071

12,107,340 4,637,020 6,846,921

13,025,567 7,672,189 6,238,260 6,966,544 4,846,051 4,136,379 5,903,035 3,307,589

17,240,232 11,166,417

4,048,579

18,327,077 37,930,096

2,871,187 14,772,205

2,761,468 2,290,079

3,885,086 2,038,352 3,769,326 2,285,781 1,094,329 1,706,074 1,722,440

564,282 925,101 704,008

3,185,699 831,725 594,302

2,068,863 10,526,359

9,462,039 2,495,487 9,749,216

984,535 1,256,459 1,053,123

982,799 3,208,255

699,570 661,556

Total Assets

Rs Lakh

215

114

358

1374

112220102418

916191723252127

61226

214356

1524876

139

113

1012

61352978

104

1112

Ranks

1,465,362 713,592

5,794,771 489,651

1,283,554 1,220,777

641,206 585,195 874,036

1,349,493 740,345 224,990 307,776 715,097 204,647 364,699 501,002 320,832 314,930 313,370 217,050 214,034 251,719 156,448 942,386 395,704 227,104

1,465,181 4,988,302

390,552 1,021,481

166,439 162,422

432,586 130,401 262,287 156,702

99,185 135,016 104,558

42,449 66,092 38,831

170,288 45,371 59,833

500,134 1,151,798 1,121,432

476,028 1,027,681

274,808 140,053 251,164 165,646 238,579

86,094 90,977

NetworthRs Lakhs

210

114

45

1112

738

2320

926161317181924252127

61522

214356

1624857

129

133

1110

412536

10798

1211

Ranks

State Bank of IndiaBank of Baroda Union Bank of IndiaBank of India Punjab National Bank IDBI Bank Punjab & Sind BankOriental Bank of CommerceCanara Bank Corporation BankUCO Bank Dena BankIndian Bank State Bank of HyderabadSyndicate BankState Bank of PatialaAndhra BankState Bank of Travancore Bank of MaharashtraIndian Overseas Bank State Bank of MysoreUnited Bank of IndiaState Bank of Bikaner & Jaipur Allahabad Bank State Bank of IndoreCentral Bank of IndiaVijaya Bank

HDFC Bank Axis Bank YES Bank Indusind Bank Kotak Mahindra Bank ICICI Bank

Dhanalakshmi BankLakshmi Vilas Bank Federal Bank City Union Bank Tamilnad Mercantile Bank ING Vysya Bank South Indian Bank Karur Vysya Bank Jammu & Kashmir Bank Karnataka Bank Catholic Syrian Bank Bank of Rajasthan Development Credit Bank

Barclays BankDBS BankStandard Chartered BankBNP Paribas Citi HSBCJP Morgan Chase BankBank of Nova ScotiaDeutsche BankCaylon BankBank of AmericaABN Amro Bank

33.67 26.62 29.83 26.10 24.07 31.91 33.65 24.12 21.67 30.49 24.35 25.41 19.31 24.51 21.58 17.96 20.99 12.68 22.59 18.89 22.43 14.23 12.67 17.73 12.98 19.12 11.03

37.61 34.81 34.85 18.71

1.41 (5.13)

39.92 27.55 19.52 25.88 23.45 24.73 19.27 16.99 15.07 18.19 18.12

9.00 (21.62)

60.03 38.28 32.74 29.54 25.54 24.63 30.00

(0.76)0.98

45.10 21.23

(12.38)



Best Foreign Banks


Total AssetsGrowth

%

1657

1232

1115

410

818

916211725132014232622241927

132456

1263547

1011

89

1213

1346785

1110

29

12

Ranks

38.08 26.55 33.55 26.46 26.01 53.98 39.64 26.35 21.30 33.49 25.42 26.83 18.90 24.63 21.77 23.54 20.13 18.92 25.14 18.73 19.86 16.11 15.00 18.65 14.71 18.99 13.73

41.72 33.95 21.82 16.14

(4.74)(10.67)

37.70 31.01 24.25 27.73 24.72 21.67 19.37 20.33 15.43 19.49 19.09

9.66 (23.51)

80.90 18.20 12.97

3.62 12.04 17.25

8.25 (20.75)

2.85 (27.89)

(0.57)(15.61)

DepositGrowth

%

3748

10129

165

116

211315141720122218242523261927

123456

12534697

118

101213

1247536

118

129

10

Ranks

30.17 34.94 29.98 25.94 29.46 25.81 34.19 25.54 28.89 23.80 24.91 25.43 29.18 21.84 27.29 19.87 28.92 16.26 17.09 23.98 21.82 27.05 19.04 18.26 18.59 17.10 11.92

55.90 36.70 31.52 23.25

6.90 (3.24)

52.05 35.94 18.45 24.43 23.27 14.34 13.38 10.49 10.84

8.93 11.17

4.67 (19.53)

38.18 15.17 12.49

(1.64)4.02

(7.87)(33.68)

0.66 (1.81)(2.73)(2.80)

(18.26)

Advances Growth

%

314

115

122

138

171514

618

920

726251619102123222427

123456

1253467

109

118

1213

12364

1012

5789

11

Ranks


NameRank2009

1234567891011121314151617.517.5192021222324.524.52627

123456

12345678910111213

123456789101112

CATEGORY � GROWTH

22.63 30.97 33.64 30.02 27.04 96.00 28.77 19.48 33.35 17.16 10.55 23.95 27.00 31.80 25.54 26.63 21.45 33.98 11.33 17.13

9.96 28.40 17.48 29.08 28.31

5.52 35.50

41.95 42.58 54.64 52.60 23.88 14.55

22.86 23.70 51.55 21.42 27.28 30.34 39.01 20.34 23.42

3.23 1.01

22.72 13.41

252.18 30.76 14.98 77.10 20.78 23.71 15.05 80.50 42.32 29.59 29.81

6.59

NII Growth

%


1234567891011121314151617.517.5192021222324.524.52627

123456

12345678910111213

123456789101112

State Bank of IndiaBank of Baroda

Union Bank of IndiaBank of India

Punjab National Bank IDBI Bank

Punjab & Sind BankOriental Bank of Commerce

Canara Bank Corporation Bank

UCO Bank Dena Bank

Indian Bank State Bank of Hyderabad

Syndicate BankState Bank of Patiala

Andhra BankState Bank of Travancore

Bank of MaharashtraIndian Overseas Bank State Bank of MysoreUnited Bank of India

State Bank of Bikaner & Jaipur Allahabad Bank

State Bank of IndoreCentral Bank of India

Vijaya Bank

HDFC Bank Axis Bank YES Bank

Indusind Bank Kotak Mahindra Bank

ICICI Bank

Dhanalakshmi BankLakshmi Vilas Bank

Federal Bank City Union Bank

Tamilnad Mercantile Bank ING Vysya Bank

South Indian Bank Karur Vysya Bank

Jammu & Kashmir Bank Karnataka Bank

Catholic Syrian Bank Bank of Rajasthan

Development Credit Bank

Barclays BankDBS Bank

Standard Chartered BankBNP Paribas

Citi HSBC

JP Morgan Chase BankBank of Nova Scotia

Deutsche BankCaylon Bank

Bank of AmericaABN Amro Bank

Ranks2009Name

18748

131

1020

522251714

6161519

32423261121

91227

2

354621

7519432

106

1213

811

15

11398

102476

12

Ranks

35.55 55.15 24.48 49.66 50.86 17.69 14.34

156.33 32.42 21.47 35.31 17.48 23.45 10.56

7.64 28.48 13.45 57.42 14.25 10.27

5.67 (42.08)

28.08 (21.15)

19.20 3.83

(27.35)

41.18 69.49 51.91 97.67

(6.06)(9.61)

102.07 99.05 35.99 20.07 18.53 20.31 28.45 13.22 13.83 10.32

1.81 2.16

(329.89)

388.01 298.37

11.75 30.06 20.44

8.30 78.20 50.93 11.38 22.78 10.42

(93.10)

Net Profit Growth

%

63

1154

1517

18

137

16122022

919

2182123271025142426

423156

123675498

10121113

12857

113496

1012

Ranks

891,505 179,161 139,265 290,554 233,528

60,189 4,702

162,754 170,727

66,799 103,072

36,984 197,542

51,418 71,857 42,507 39,770 53,179 73,568

228,491 89,323 41,649 33,327 63,090 24,820 46,930 69,025

315,459 144,412

30,530 31,468 31,182

306,281

25,225 3,604

40,017 9,406

13,356 16,723 14,303 16,017 34,204 18,742

8,315 10,696

(3,781)

13,680 25,905

190,677 44,285

216,659 275,558

44,385 15,287 46,848

6,054 33,698

1,938

Increase in Networth Rs Lakhs

16923

1727

87

151024

5191321231812

411222516262014

136452

312

110

857624

119

13

1083621594

117

12

Ranks

Punjab National Bank Bank of India Indian Bank Union Bank of IndiaState Bank of Travancore Corporation BankIndian Overseas Bank Bank of Baroda Dena BankAndhra BankState Bank of Bikaner & Jaipur Punjab & Sind BankState Bank of IndiaCanara Bank State Bank of HyderabadState Bank of IndoreAllahabad Bank Syndicate BankState Bank of MysoreBank of MaharashtraOriental Bank of CommerceState Bank of PatialaVijaya BankUnited Bank of IndiaUCO Bank Central Bank of IndiaIDBI Bank

Axis Bank HDFC Bank YES Bank ICICI Bank Kotak Mahindra Bank Indusind Bank

City Union Bank Tamilnad Mercantile Bank Karur Vysya Bank Jammu & Kashmir Bank Federal Bank Karnataka Bank South Indian Bank Bank of Rajasthan Dhanalakshmi BankDevelopment Credit Bank Catholic Syrian Bank ING Vysya Bank Lakshmi Vilas Bank

JP Morgan Chase BankCiti Bank of AmericaCaylon BankStandard Chartered BankBNP Paribas DBS BankHSBCDeutsche BankBank of Nova ScotiaBarclays BankABN Amro Bank

1.39 1.49 1.62 1.27 1.30 1.24 1.17 1.09 1.02 1.09 0.92 1.26 1.04 1.06 0.91 0.88 0.90 0.81 0.91 0.72 0.88 0.83 0.59 0.34 0.59 0.45 0.62

1.44 1.28 1.60 0.98 1.03 0.58

1.50 1.51 1.49 1.09 1.48 1.25 1.09 0.74 1.21

(1.25)0.57 0.70 0.71

4.21 2.12 3.42 4.10 2.87 2.13 2.72 1.51 1.72 2.04 0.16 0.06



Best Foreign Banks


Return On Assets

%

3215478

9.513

9.514

61211

15.518.5

1721

15.522

18.520

24.527

24.52623

231546

213

7.545

7.596

13121110

1732465

1098

1112

Ranks

10.68 9.78

11.14 10.41 10.43 10.00 10.78

8.93 9.89

10.76 10.89 11.57

9.68 10.44 10.57 10.57 10.13 10.13 10.84 10.28 10.60 11.25 11.41

9.50 10.00

9.78 9.97

10.57 14.96 13.63 10.06 15.50 12.56

12.87 12.47 11.50 11.53 12.42 12.28 11.40 12.06 11.03 13.47 11.76 11.13 11.38

8.36 12.61 11.28 10.10 12.30 10.11

9.39 13.63 13.31

8.52 17.29 12.47

Yield On Advances

%

923.5

41514

19.57

2722

851

2513

11.511.517.517.5

61610

32

2619.523.5

21

523614

239845

106

1317

1211

1247968

1023

1115

Ranks

6.15 5.76 6.08 6.09 6.45 6.31 6.46 5.33 5.86 6.41 6.72 7.03 5.93 6.72 6.95 6.56 6.24 6.26 6.95 5.92 7.41 7.95 7.42 5.86 6.58 6.55 7.14

6.06 6.58 8.34 6.82 6.84 7.66

7.60 7.40 7.34 6.22 6.45 7.53 6.84 6.67 6.52 7.49 6.54 6.18 7.42

3.45 3.91 2.25 3.10 4.98 3.94 4.03 4.94 1.66 7.50 9.24 4.59

Cost Of Deposits

%

9278

141215

13.513

19.523

619.521.5

171011

21.55

252726

3.5181624

126345

41110

67

13918325

12

4523

106791

1112

8

Ranks


NameRank2009

12345

6.56.5

89

101112131415161718192021222324252627

123456

123

4.54.5

6789

10111213

123456789

101112

CATEGORY � PROFITABILITY

21.09 22.28 17.45 19.75 27.02 18.23 18.54 17.35 19.47 17.91 19.71 20.43 15.74 16.98 19.19 17.83 13.13 18.22 14.84 14.90 12.23 16.96

8.33 6.00

14.09 8.91 9.11

17.77 15.32 18.71

7.53 7.07 8.91

18.48 15.15 17.47 15.63 11.57 17.02 14.94 11.26 13.54

(14.72)9.58

11.09 11.09

17.67 18.87 12.26 17.10 18.55 10.26 18.49 11.51

9.03 17.76

0.60 0.81

Return On Networth

%


123456.56.589101112131415161718192021222324252627

123456

1234.54.5678910111213

123456789101112

Punjab National Bank Bank of India

Indian Bank Union Bank of India

State Bank of Travancore Corporation Bank

Indian Overseas Bank Bank of Baroda

Dena BankAndhra Bank

State Bank of Bikaner & Jaipur Punjab & Sind BankState Bank of India

Canara Bank State Bank of Hyderabad

State Bank of IndoreAllahabad Bank Syndicate Bank

State Bank of MysoreBank of Maharashtra

Oriental Bank of CommerceState Bank of Patiala

Vijaya BankUnited Bank of India

UCO Bank Central Bank of India

IDBI Bank

Axis Bank HDFC Bank

YES Bank ICICI Bank

Kotak Mahindra Bank Indusind Bank

City Union Bank Tamilnad Mercantile Bank

Karur Vysya Bank Jammu & Kashmir Bank

Federal Bank Karnataka Bank

South Indian Bank Bank of Rajasthan

Dhanalakshmi BankDevelopment Credit Bank

Catholic Syrian Bank ING Vysya Bank

Lakshmi Vilas Bank

JP Morgan Chase BankCiti

Bank of AmericaCaylon Bank

Standard Chartered BankBNP Paribas

DBS BankHSBC

Deutsche BankBank of Nova Scotia

Barclays BankABN Amro Bank

Ranks2009Name

32

1451

109

157

1264

1816

8132211201923172627212524

231564

152483697

1312

10.510.5

51762938

104

1211

Ranks

74.18 71.87 71.66 76.95 77.51 74.96 77.54 75.88 81.27 79.02 79.65 80.09 76.58 79.60 79.89 79.63 77.65 83.27 82.47 83.44 83.03 85.00 84.86 85.90 86.86 87.53 89.42

72.88 73.61 78.36 76.94 80.13 86.68

75.57 76.16 75.57 76.05 67.12 78.85 80.62 87.15 81.98 90.15 87.99 84.76 85.76

29.87 48.13 32.70 45.43 57.04 52.92 59.30 53.79 60.08 59.95 71.25 67.54

Cost / Income

%

32178495

17111416

61215131020182119232224252627

124356

2.55

2.54167

118

1312

910

14237586

109

1211

Ranks

7.51 7.14 7.55 7.37 6.98 7.13 7.23 6.87 7.28 6.91 7.29 6.52 6.69 7.62 7.43 7.17 6.97 7.11 7.13 6.46 8.17 7.45 7.74 7.02 6.55 6.88 5.03

7.63 7.41 8.18 6.90 6.12 6.57

6.92 7.78 6.71 6.79 6.32 6.72 6.74 6.48 5.98 6.71 6.37 5.60 7.09

6.63 7.57 6.10 5.94 8.77 8.14 6.54 8.83 6.99 7.84 8.18 6.12

Return On Investments

%

513

48

1814.5

11221020

92523

37

121916

14.526

162

17242127

231465

31

7.54

11659

127.51013

2

86

1112

2491753

10

Ranks

Bank of India Corporation BankBank of Baroda Union Bank of IndiaIDBI Bank Indian Bank State Bank of Travancore Indian Overseas Bank Punjab National Bank Oriental Bank of CommerceCanara Bank State Bank of HyderabadPunjab & Sind BankState Bank of IndiaAndhra BankState Bank of PatialaState Bank of IndoreAllahabad Bank Dena BankSyndicate BankState Bank of Bikaner & Jaipur State Bank of MysoreVijaya BankUCO Bank Bank of MaharashtraCentral Bank of IndiaUnited Bank of India

YES Bank ICICI Bank Axis Bank HDFC Bank Kotak Mahindra Bank Indusind Bank

Federal Bank Jammu & Kashmir Bank City Union Bank Karur Vysya Bank Tamilnad Mercantile Bank Karnataka Bank South Indian Bank Dhanalakshmi BankING Vysya Bank Bank of Rajasthan Development Credit Bank Catholic Syrian Bank Lakshmi Vilas Bank

Bank of AmericaJP Morgan Chase BankCaylon BankCiti Deutsche BankBank of Nova ScotiaBNP Paribas DBS BankBarclays BankHSBCStandard Chartered BankABN Amro Bank

833.00 1,049.00

914.00 694.00

2,030.33 617.00 657.75 689.50 654.92

1,142.43 780.17 839.82 655.58 556.00 728.29 910.24 701.53 706.00 714.00 750.65 555.39 602.00 756.00 732.00 635.61 560.28 585.00

988.36 1,154.00 1,060.00

446.00 347.00 836.00

750.00 500.00 565.18 638.00 679.25 649.00 645.14 585.88 606.39 532.93 379.00 374.00 510.00

2,430.57 1,825.28 2,105.00 1,880.10 1,434.10 3,890.97 2,035.00 1,662.32 1,110.13

961.81 971.77

1,029.41



Best Foreign Banks


Business Per Employee Rs Lakhs

7 3 4

16 1

22 18 17 20

2 8 6

19 26 12

5 15 14 13 10 27 23

9 11 21 25 24

3 1 2 5 6 4

4 2 3 8

10 6 7 1 9 5

12 13 11

2 6 3 5 8 1 4 7 9

12 11 10

Ranks

7.49 7.64 6.05 6.28 8.42 6.23 5.36 5.20 5.64 6.18 4.97 4.87 5.03 4.74 4.58 4.68 4.44 3.75 4.28 3.64 3.55 3.48 2.34 2.40 2.76 1.71 1.22

11.38 11.00 10.02

4.18 3.00 3.49

6.90 5.00 4.98 5.98 6.43 5.00 4.31 4.10 3.03 2.89

(4.00)1.39 2.07

110.85 253.63 130.00

45.12 26.90 78.39 49.00 72.16

1.96 16.06 23.82

0.62

Profit Per Employee Rs Lakhs

3 2 7 4 1 5 9

10 8 6

12 13 11 14 16 15 17 19 18 20 21 22 25 24 23 26 27

1 2 3 4 6 5

1 4.5

6 3 2

4.5 7 8 9

10 13 12 11

3 1 2 7 8 4 6 5

11 10

9 12

Ranks

2.72 2.20 2.52 2.68 0.87 3.37 2.75 2.57 3.15 1.96 2.36 2.12 2.80 2.48 2.60 1.75 2.35 2.39 2.44 2.19 2.52 2.28 1.90 1.63 2.34 1.64 2.00

2.56 2.15 2.87 4.69 5.33 1.80

3.69 2.84 2.92 2.59 3.37 2.24 2.79 2.51 2.26 2.33 2.92 2.55 2.07

5.07 3.06 3.09 4.67 5.21 2.48 4.18 2.91 6.29 4.30 3.70 4.90

Spread / Total Assets

%

5 18 10

6 27

1 4 8 2

22 14 20

3 11

7 24 15 13 12 19 10 17 23 26 16 25 21

4 5 3 2 1 6

1 5

3.5 7 2

12 6 9

11 10

3.5 8

13

3 10

9 5 2

12 7

11 1 6 8 4

Ranks


NameRank2009

123456789

101112131415161718192021222324252627

123456

123456789

10111213

123456789

101112

CATEGORY � EFFICIENCY

1.51 1.44 1.36 1.04 0.92 1.34 1.23 1.43 1.31 1.05 1.16 1.11 1.13 1.51 1.22 0.98 1.12 1.26 0.99 0.72 1.32 1.31 1.18 1.01 0.93 0.79 0.84

2.18 1.95 2.25 2.08 1.26 1.79

1.45 0.70 1.49 1.68 1.37 1.67 0.88 1.64 1.91 0.75 1.78 1.53 1.44

4.38 7.71 4.56 3.79 4.11 2.44 2.79 2.79 3.51 3.17 3.62 3.57

Non-Interest Income / Total

Assets %


123456789101112131415161718192021222324252627

123456

12345678910111213

123456789101112

Bank of India Corporation Bank

Bank of Baroda Union Bank of India

IDBI Bank Indian Bank

State Bank of Travancore Indian Overseas Bank Punjab National Bank

Oriental Bank of CommerceCanara Bank

State Bank of HyderabadPunjab & Sind BankState Bank of India

Andhra BankState Bank of PatialaState Bank of Indore

Allahabad Bank Dena Bank

Syndicate BankState Bank of Bikaner & Jaipur

State Bank of MysoreVijaya Bank

UCO Bank Bank of MaharashtraCentral Bank of IndiaUnited Bank of India

YES Bank ICICI Bank Axis Bank

HDFC Bank Kotak Mahindra Bank

Indusind Bank

Federal Bank Jammu & Kashmir Bank

City Union Bank Karur Vysya Bank

Tamilnad Mercantile Bank Karnataka Bank

South Indian Bank Dhanalakshmi Bank

ING Vysya Bank Bank of Rajasthan

Development Credit Bank Catholic Syrian Bank

Lakshmi Vilas Bank

Bank of AmericaJP Morgan Chase Bank

Caylon BankCiti

Deutsche BankBank of Nova Scotia

BNP Paribas DBS Bank

Barclays BankHSBC

Standard Chartered BankABN Amro Bank

Ranks2009Name

1.5 3 5

19 24

6 11

4 8.5 18 14 17 15

1.5 12 22 16 10 21 27

7 8.5 13 20 23 26 25

2 4 1 3 6 5

8 13

7 3

10 4

11 5 1

12 2 6 9

3 1 25 4

12 11 11

8 9 6 7

Ranks

102.50 86.85 76.38 67.21

168.34 77.30 83.27 68.80 71.50 63.67 75.64 60.25 50.95 79.68 45.83 62.68 59.47 34.67 38.67 40.64 47.08 50.74 23.84 27.10 26.66 16.20 12.78

257.51 266.91 230.96 160.35 125.50

81.51

81.91 83.47 58.44 79.68 70.20 59.00 37.53 31.75 42.52 25.70

(108.73)10.33 20.36

6,740.00 44,387.00

2,592.17 5,300.17 3,308.08 3,057.20 1,888.89 2,590.20

602.20 2,747.43 2,118.61

64.57

Profit Per Branch

Rs Lakhs

2 3 7

11 1 6 4

10 9

12 8

14 16

5 19 13 15 22 21 20 18 17 25 23 24 26 27

2 1 4 3 5 6

2 1 6 3 4 5 8 9 7

10 13 12 11

2 1 7 3 4 5

10 8

11 6 9

12

Ranks

1.37 1.15 1.57 1.38 0.78 1.68 1.62 1.60 1.70 1.23 1.40 1.22 1.67 1.62 1.61 1.14 1.39 1.43 1.59 1.32 1.70 1.64 1.48 1.31 1.63 1.26 1.57

1.83 1.86 1.93 3.02 4.17 1.98

1.47 1.25 1.51 1.51 1.87 1.52 1.61 2.00 2.42 1.83 4.07 2.65 1.82

1.78 1.31 1.51 2.46 4.63 0.84 1.97 1.31 4.31 2.32 2.56 4.67

Operating Expenses/Total

Assets %

9 3

15.5 10

1 25

20.5 18

26.5 5

12 4

24 20.5

19 2

11 13 17

8 26.5

23 14

7 22

6 15.5

123564

21

3.53.5

956

1011

81312

7

5248

11163

1079

12

Ranks

Oriental Bank of CommercePunjab National Bank State Bank of Travancore Bank of Baroda Indian Bank Corporation BankUCO Bank Punjab & Sind BankAndhra BankSyndicate BankCentral Bank of IndiaState Bank of MysoreIDBI Bank State Bank of PatialaBank of MaharashtraState Bank of IndoreAllahabad Bank State Bank of Bikaner & Jaipur State Bank of HyderabadBank of India Dena BankUnion Bank of IndiaVijaya BankCanara Bank United Bank of IndiaState Bank of IndiaIndian Overseas Bank

Indusind Bank YES Bank Axis Bank HDFC Bank Kotak Mahindra Bank ICICI Bank

Tamilnad Mercantile Bank Karur Vysya Bank Dhanalakshmi BankLakshmi Vilas Bank City Union Bank Federal Bank ING Vysya Bank Karnataka Bank Jammu & Kashmir Bank Bank of Rajasthan South Indian Bank Catholic Syrian Bank Development Credit Bank

Bank of Nova ScotiaJP Morgan Chase BankCaylon BankBank of AmericaDBS BankStandard Chartered BankBarclays BankBNP Paribas Citi ABN Amro BankDeutsche BankHSBC

(22,198)(55,183)

(2,643)(13,846)

(2,769)(2,520)

(11,244)2,551 (429)

(17,411)(3,400)

861 5,908 5,296 3,214 3,589 6,774 5,302

17,410 53,996

4,817 26,675 18,732 89,535 25,900

275,126 92,646

(13,729)7,436

40,316 108,110

27,763 206,977

(178)1,160

122 607

1,915 12,095

9,315 6,363 7,404 3,473 7,208 4,039

24,213

(0.31)(5,951.82)

(132.00)(0.22)

2,922.00 33,437.00 99,482.10

4,137.00 101,410.00

54,999.00 18,771.02 84,291.49



Best Foreign Banks


CATEGORY � CREDIT QUALITY

Increase In GNPA

Rs Lakhs

2184795

1210

36

11181613141917202415232125222726

124536

14235

1211

810

697

13

312458

117

1296

10

Ranks

262,877 407,468

57,232 280,156 263,121 104,346 245,207

53,289 159,317 338,169 180,284

96,568 262,667 212,415 110,246

43,228 322,974

66,337 147,343 530,125 127,796 295,934

97,433 206,598 173,649

1,303,526 506,049

4,282.00 3,211.22

99,617.00 12,041.00

7,091.00 111,479.00

11,091.00 29,339.00

3,421.00 17,133.00 31,331.00 63,098.00 16,030.04 48,491.00 60,716.00 30,301.00 24,222.73 13,326.00

8,897.00

- 3,213.41

- 3,250.00

- 43,479.11 30,290.22

- 52,570.00 19,092.00 41,500.42 12,468.87

Restructured Loans

Rs Lakhs

1824

32019

716

2112313

51715

81

224

1026

921

614122725

215436

116

1384193257

1012

2.55

2.56

2.511

92.512

810

7

Ranks

5.98 1.80 8.37 3.51 1.31 2.82

20.54 3.65 2.17

12.61 16.58

5.68 10.07

8.41 10.80 12.32

7.21 12.36

5.17 4.66

14.44 3.73 9.28

12.35 17.06 16.48 13.97

10.76 2.53 3.20 4.28

10.16 9.13

2.23 1.91 6.65

14.29 9.25 1.57

12.09 7.41

10.97 5.45

10.30 22.65 21.23

- 0.36

- -

1.07 5.00 9.69 1.93 9.12

15.36 1.62 3.49

NNPA / Networth

%

112

13514

2763

212510161417181220

98

237

1519262422

612354

325

1171

106948

1312

242259

117

1012

68

Ranks


NameRank2009

1.51.5

3456789

101112131415161718192021222324252627

123456

123456789

10111213

123456789

101112

1.53 1.77 1.67 1.27 0.89 1.14 2.21 0.65 0.83 1.93 2.67 1.42 1.38 1.31 2.29 1.39 1.81 1.63 1.11 1.71 2.13 1.96 1.95 1.56 2.85 2.98 2.54

1.61 0.68 1.08 1.98 4.31 4.32

1.81 1.95 1.99 2.71 1.80 2.57 1.25 3.66 2.64 2.04 2.18 4.56 8.78

0.04 8.14 0.05 0.02 1.26 2.78

10.93 2.00 5.10 4.93 2.71 5.36

GNPA/Gross Advances

%


1.51.53456789101112131415161718192021222324252627

123456

12345678910111213

123456789101112

Oriental Bank of CommercePunjab National Bank

State Bank of Travancore Bank of Baroda

Indian Bank Corporation Bank

UCO Bank Punjab & Sind Bank

Andhra BankSyndicate Bank

Central Bank of IndiaState Bank of Mysore

IDBI Bank State Bank of PatialaBank of MaharashtraState Bank of Indore

Allahabad Bank State Bank of Bikaner & Jaipur

State Bank of HyderabadBank of India

Dena BankUnion Bank of India

Vijaya BankCanara Bank

United Bank of IndiaState Bank of India

Indian Overseas Bank

Indusind Bank YES Bank

Axis Bank HDFC Bank

Kotak Mahindra Bank ICICI Bank

Tamilnad Mercantile Bank Karur Vysya Bank

Dhanalakshmi BankLakshmi Vilas Bank

City Union Bank Federal Bank

ING Vysya Bank Karnataka Bank

Jammu & Kashmir Bank Bank of Rajasthan South Indian Bank

Catholic Syrian Bank Development Credit Bank

Bank of Nova ScotiaJP Morgan Chase Bank

Caylon BankBank of America

DBS BankStandard Chartered Bank

Barclays BankBNP Paribas

Citi ABN Amro Bank a

Deutsche BankGHSBC

Ranks2009Name

111614

635

2212

182510

87

239

1713

41521201912262724

312456

345

10281

11967

1213

211

3147

125986

10

Ranks

(1.62)(1.57)(0.58)(0.37)(0.24)(0.27)(0.80)

0.41 (0.04)(1.01)(0.27)

0.19 0.29 0.73 0.64 1.06 0.74 1.11 2.17 1.80 0.83 1.19 4.86 2.85 3.42 2.16 6.28

(4.65)2.47 1.81 2.99

22.57 (33.01)

(0.14)1.17 0.11 0.44 1.72 3.38 4.45 6.23 3.60 9.77 5.27

10.72 (38.74)

(0.01)14.77

2.58 0.00 7.81 7.72

27.36 (79.68)

49.68 (16.35)

(552.02)(48.74)

Increase In GNPA / Increase In Gross

Advances %

12569

7.54

1310

37.511121514181619232117202624252227

132456

1534672

108

119

1213

1432657

1189

1210

Ranks

(0.69)(1.39)(1.73)(0.11)(0.03)

0.12 (2.04)

0.18 0.26 0.05 0.02 0.86

(0.63)0.64 0.36 1.75 0.25 0.92 1.39 0.12 1.67 0.89 2.93 1.96 2.91 1.69 4.39

(3.76)1.10 0.36 0.93

11.25 (14.56)

0.16 0.86 0.88 0.38 1.50 0.71 4.89 0.99 4.12 7.53 7.18 9.37

(12.59)

- 3.78

- -

3.86 4.05

15.51 (51.73)

37.51 (5.17)

(38.00)(9.18)

Increase In NNPA / Increase In Net

Advances %

43267

10.51

1214

98

175

161523131920

10.521182624252227

142356

145273968

11101213

21

7.57.5

345

1269

1110

Ranks

ForeignNationalisedNationalisedNew PrivateForeignNationalisedNationalisedNationalisedForeignOld PrivateForeignForeignForeignNationalisedOld PrivateNationalisedForeignOld PrivateNationalisedForeignNationalisedForeignOld PrivateOld PrivateOld PrivateNew PrivateForeignNew PrivateNationalisedNationalisedNationalisedNew PrivateOld PrivateOld PrivateForeignOld PrivateOld PrivateNew PrivateOld PrivateNationalisedNationalisedNationalisedOld PrivateForeignNationalisedNationalisedNationalisedNationalisedNationalisedNationalisedNationalisedNationalisedOld PrivateNationalisedNationalisedNationalisedNationalisedNew Private

1,596,025 8,497,179 5,939,003

11,737,411 416,676

19,239,695 18,970,848

5,225,492 297,574

1,518,714 1,248,552

335,314 81,833

18,689,252 633,283

13,127,186 5,167,746

820,662 7,398,391

602,286 4,305,061 1,414,737

464,689 496,880

3,219,819 14,281,158

4,997,028 21,834,783 11,240,101

7,258,183 10,011,589

2,211,026 2,488,993 3,300,411

358,660 2,033,328 1,510,140 1,564,493

736,091 9,836,886 3,467,566

20,976,051 1,809,234 4,180,176 3,922,442 6,244,891

74,207,312 2,833,198 3,291,577 6,000,619 4,204,192

11,588,514 956,604

10,022,156 13,870,284

5,453,590 5,453,542 1,616,943

ABN Amro BankAllahabad Bank Andhra BankAxis Bank Bank of America Bank of Baroda Bank of India Bank of MaharashtraBank of Nova ScotiaBank of Rajasthan Barclays BankBNP ParibasCalyon BankCanara Bank Catholic Syrian Bank Central Bank of IndiaCiti City Union Bank Corporation BankDBS BankDena BankDeutsche BankDevelopment Credit Bank Dhanalakshmi Bank Federal Bank HDFC Bank HSBCICICI Bank IDBI Bank Indian Bank Indian Overseas BankIndusind Bank ING Vysya Bank Jammu & Kashmir Bank JP Morgan Chase Bank Karnataka Bank Karur Vysya Bank Kotak Mahindra Bank Lakshmi Vilas Bank Oriental Bank of CommercePunjab & Sind Bank Punjab National Bank South Indian Bank Standard Chartered BankState Bank of Bikaner & Jaipur State Bank of HyderabadState Bank of India State Bank of IndoreState Bank of MysoreState Bank of PatialaState Bank of Travancore Syndicate BankTamilnad Mercantile Bank UCO Bank Union Bank of IndiaUnited Bank of IndiaVijaya BankYES Bank


COMPATABILITY MODE �

Deposits

944,196 93,704

131,123 1,018,548

216,094 563,609 948,698

19,001 304,460

128 233,083 284,408 428,786 705,661

13 80,425

1,856,630 15

207,240 249,707

5,213 360,093

34,552 -

74,894 268,584 826,845

6,732,369 4,441,704

53,078 654,828 185,646 215,242

99,663 344,655

397 2,304

590,407 3,260

72,196 271,148 437,436

25,701 662,259

78,545 236,447

5,371,368 90,306

276,208 90,378 80,776

219,048 3,268

206,242 388,490

45,677 61,924

218,906

Borrowings

1,081,069 2,965,105 1,691,111 4,633,035

367,030 5,244,588 5,260,718 1,838,214

172,615 680,915 788,312 356,175 403,083

5,777,690 218,397

4,306,072 2,451,935

239,746 2,493,777

781,066 1,247,308

870,486 162,173 156,736

1,211,897 5,881,755 3,115,382

10,305,831 5,004,760 2,280,057 3,121,544

808,341 1,049,554 1,073,633

669,440 896,149 471,598 911,018 186,306

2,848,895 1,262,743 6,338,518

607,520 1,555,156 1,099,879 2,098,166

27,595,396 805,062

1,137,796 1,702,921 1,323,171 3,053,723

320,719 2,938,478 4,299,696 1,792,421 1,738,770

711,702

Investments

1,665,974 5,880,176 4,413,926 8,155,677

335,594 14,398,590 14,290,937

3,429,077 480,528 778,075

1,055,051 370,988 176,299

13,821,940 368,384

8,548,320 3,991,994

564,525 4,851,216

272,285 2,887,796

879,763 327,402 319,606

2,239,188 9,888,305 2,758,869

21,831,085 10,342,834

5,146,528 7,488,527 1,577,064 1,675,093 2,093,041

70,255 1,181,004 1,040,988 1,662,534

524,583 6,850,037 2,461,535

15,470,299 1,185,203 3,751,602 2,985,071 4,367,917

54,250,320 2,161,211 2,561,605 4,363,412 3,271,093 8,153,227

657,169 6,880,386 9,653,423 3,539,355 3,546,811 1,240,309

Advances

238,579 585,195 364,699

1,021,481 274,808

1,283,554 1,349,493

251,719 86,094

104,558 500,134 165,646

90,977 1,220,777

38,831 641,206

1,151,798 66,092

489,651 140,053 217,050 476,028

59,833 42,449

432,586 1,465,181 1,121,432 4,988,302

942,386 713,592 715,097 166,439 170,288 262,287 251,164 156,702 135,016 390,552

45,371 740,345 214,034

1,465,362 130,401

1,027,681 204,647 320,832

5,794,771 156,448 227,104 313,370 224,990 501,002

99,185 395,704 874,036 307,776 314,930 162,422

NetworthSector Name

All figures pertain to March 31, 2009

3,208,255 9,764,801 6,846,921

14,772,205 984,535

22,740,673 22,550,177

5,903,035 699,570

1,722,440 2,068,863

982,799 661,556

21,964,580 704,008

14,765,522 10,526,359

925,101 8,690,581 1,256,459 4,846,051 2,495,487

594,302 564,282

3,885,086 18,327,077

9,462,039 37,930,096 17,240,232

8,412,175 12,107,340

2,761,468 3,185,699 3,769,326 1,053,123 2,285,781 1,706,074 2,871,187

831,725 11,258,259

4,136,379 24,691,862

2,038,352 9,749,216 4,637,020 7,672,189

96,443,208 3,307,589 4,048,579 6,966,544 4,946,051

13,025,567 1,094,329

11,166,417 16,097,551

6,204,071 6,238,260 2,290,079

TotalAssets

311,967 736,473 537,461

1,083,548 60,691

1,509,158 1,634,735

429,155 54,525

138,361 203,654

63,636 34,659

1,711,905 55,662

1,045,519 684,023

80,440 606,735

80,864 344,750 188,145

64,520 40,841

331,538 1,633,227

632,692 3,109,255 1,163,162

683,033 964,141 230,947 223,989 298,812

51,592 191,740 144,610 306,514

65,762 885,648 324,717

1,932,617 168,692 564,942 381,028 570,950

6,378,844 271,308 324,727 580,406 412,315 957,963

97,715 812,137

1,188,938 431,187 523,782 200,332

Interest Income


ABN Amro BankAllahabad Bank

Andhra BankAxis Bank

Bank of America Bank of Baroda

Bank of India Bank of Maharashtra

Bank of Nova ScotiaBank of Rajasthan

Barclays BankBNP ParibasCalyon BankCanara Bank

Catholic Syrian Bank Central Bank of India

Citi City Union Bank

Corporation BankDBS Bank

Dena BankDeutsche Bank

Development Credit Bank Dhanalakshmi Bank

Federal Bank HDFC Bank

HSBCICICI Bank IDBI Bank

Indian Bank Indian Overseas Bank

Indusind Bank ING Vysya Bank

Jammu & Kashmir Bank JP Morgan Chase Bank NA

Karnataka Bank Karur Vysya Bank

Kotak Mahindra Bank Lakshmi Vilas Bank

Oriental Bank of CommercePunjab & Sind Bank

Punjab National Bank South Indian Bank

Standard Chartered BankState Bank of Bikaner & Jaipur

State Bank of HyderabadState Bank of India

State Bank of IndoreState Bank of MysoreState Bank of Patiala

State Bank of Travancore Syndicate Bank

Tamilnad Mercantile Bank UCO Bank

Union Bank of IndiaUnited Bank of India

Vijaya BankYES Bank

Name

143,715 520,605 374,772 714,928

15,189 996,816

1,084,845 303,504

37,103 99,845 97,852 27,202 17,370

1,240,125 39,089

822,672 242,884

56,183 437,637

49,392 238,307

58,794 44,795 28,679

199,992 891,110 266,100

2,272,594 1,030,572

422,182 677,181 185,044 159,027 198,786

23,078 144,383 103,568 154,660

50,407 685,998 223,530

1,229,531 116,404 248,962 270,706 424,271

4,291,530 197,944 240,902 467,632 284,059 697,760

64,343 647,668 807,582 315,035 411,303 149,214

InterestExpence NII

122,510 114,193

76,537 289,687

39,332 275,766 305,186

50,002 17,140 12,361 58,921 24,318 25,493

231,121 9,959

106,997 358,229

12,369 110,721

30,219 43,012

101,967 12,013

7,936 51,577

329,061 269,943 760,371 138,991 103,543 159,582

45,625 54,767 24,506 71,821 35,315 26,520 35,785 10,699

107,133 40,769

291,969 16,427

309,705 57,705 76,931

1,269,080 35,041 48,036 63,164 57,310 86,036 13,584

101,989 148,255

49,086 69,881 43,502

168,252 215,868 162,689 368,620

45,502 512,342 549,890 125,651

17,422 38,516

105,802 36,434 17,289

471,780 16,573

222,847 441,139

24,257 169,098

31,472 106,443 129,351

19,725 12,162

131,546 742,117 366,592 836,661 132,590 260,851 286,960

45,903 64,962

100,026 28,514 47,357 41,042

151,854 15,355

199,650 101,187 703,086

52,288 315,980 110,322 146,679

2,087,314 73,364 83,825

112,774 128,256 260,203

33,372 164,469 381,356 116,152 112,479

51,118

OtherIncome

149,736 139,945 110,426 285,821

17,514 357,605 309,397

96,302 5,857

31,502 89,245 19,343

9,959 306,526

18,650 186,170 258,722

13,952 100,157

16,483 76,821

115,507 24,202 11,306 57,145

553,282 219,466 704,509 133,790 141,514 194,170

54,702 77,247 47,086 13,781 34,652 25,759

119,641 15,169

138,284 69,184

420,620 32,846

249,973 78,743 93,314

1,564,871 46,004 66,508 79,392 79,938

171,596 20,427

146,298 221,411

97,514 92,471 41,853

OperatingExpense

1,937 76,861 65,302

181,534 33,700

222,723 300,733

37,515 15,286 11,769

3,011 17,000 15,553

207,240 3,720

57,124 217,307

12,215 89,278 25,902 42,264 43,005

(8,807)5,747

50,050 224,494 129,129 375,814

85,853 124,529 132,579

14,835 18,878 40,984 44,387 26,669 23,585 27,609

5,030 90,543 43,718

309,088 19,476

190,675 40,346 61,580

912,123 27,892 33,692 53,155 60,784 91,281 15,022 55,770

172,655 18,472 26,246 30,386

36,641 42,211

7,922 32,713

- 45,115 62,821 27,190

- 5,703

48,462 3,193

- 150,725

8,794 106,300 105,070

6,111 13,830

1,493 31,338

7,717 12,701

2,824 6,812

62,762 39,103

455,394 94,896

9,381 99,914 17,913 20,595 28,782

892 11,610

2,582 39,684

6,485 44,243

7,803 26,385 13,431 51,409 25,294 16,579

955,202 19,274 12,907 26,363 18,838 63,177

2,208 81,267 32,594 52,500 29,229

4,116

NetProfit NNPA

Figures in Rs Lakhs

‘Go for financial inclusion’


REGULATOR SPEAK � K C CHAKRABARTY Deputy Governor, RBI

KC Chakrabarty speakswith the Financial Expresson a host of issues. Excerpts:

How do you see the impactof the slowdown on thedomestic banking sector?

I think we have been ableto manage the slowdown tillnow. Thus, growth has pickedup now. Despite the severedrought, the country’seconomy is growing by 7%.

Do you feel the Indianfinancial system came outunscathed?

I won't say is it was therobustness that preventedthe greater damage to theeconomic system. Rather, Iwould say different playersand regulators havemanaged it well. But then,any financial system isrobust, if the availability of credit is ensured for alarge segment of society.Even those who are very poor manage thedifficult situation very well.

What is the broad lesson for RBIfrom the global financial crisis?

The broad lesson is to improvebanking penetration. Secondly, themonetary policy must be concernedwith asset bubbles. Third, wheneverthings are going good, you should beconcerned about the credit growthand the money supply growth. Fourth,whenever any particular sector showsthe signs of more volatility and morerisks, counter-cyclical measuresshould be taken. There should alwaysbe vigilance in the regulatory system.

Can it lead to a situation overregulation impeding the freedomof the markets?

Ideally it should not happen now.But, whenever any crisis or anyaccident takes place, people obviouslyget cautious. That is a common thing.

At the Reserve Bank, we are veryclear. I see the regulators will becautious at the global level as well.Because of that, reforms should notslow down. At RBI, we are committedto reforms. And hence we are workingto ensure the penetration of bankingfacilities, which means takingbanking services to the doors of themasses.

Will you allow sophisticatedderivative products in the market?

We should not be concerned aboutderivative products. Rather, we shouldbe worried about providing basicbanking products to everybody. Letthe market take care of other things.We are not into credit derivativeproducts like CDS. When we thinkthat the market is mature enough forthese kinds of derivative products,then only will we introduce theseproducts.

The problem is that weare not at all concerned ofthe 90% population of thecountry living withouttheir access to credit.Moreover, 50% of thepopulation is does not haveaccess to any kind ofbanking products. I thinkthat we should be moreconcerned about theseissues. We are one of thepoorest countries in theworld. The problem withthe poor in the country isthat they can get money at a50% interest rate frommoneylenders or even a30% interest rate when itcomes to microfinanceinstitutions. Still, they areunable to get credit fromfinancial institutions ateven a 15% rate of interest.That is the tragedy.

What is RBI’s focus?Well, financial inclusion,

financial stability andabove all, financial sector

reforms. You have to improveeverywhere. You have to bring newthings. Our current focus is confinedto three areas, which include betterprotection to customers, bettertreatment to customers and finally,better risk management. There maybe more regulations from RBI on thesubject in the future.

How are you planning to do that?We will do it by way of promoting

financial literacy. Now, we have madesome progress on this topic. Still, Ithink that financial literacy can't bedone by the Reserve Bank alone. Youneed to involve other regulators too.

The recently formed FinancialSector Stability & DevelopmentCouncil is also discussing the financial inclusion issue. If we have to take products and services to thepoor, you need have the help oftechnology as a front-end device. ◆

Weathering the storm andemerging a global force


GUEST COLUMN � K V KAMATH

INDIA has been amongthe first economies torecover from the

impact of the globalfinancial and economiccrisis. While this high-lights the positivefundamentals drivinglong-term growth in thecountry, it also brings intofocus the resilience of ourfinancial sector in theface of a crisis that had itsgenesis in the financialsystems of the West.

It is important to havea perspective on thechallenges that arosefrom the global financialcrisis for our economyand financial sector. Theimpact was mainlythrough the trade andcapital flow channels,with a resultant impacton domestic liquidity andbusiness confidence.These challenges and therapidity of theiremergence created amood of shock anderosion of confidence amongbusinesses, consumers, lenders andinvestors. The corporate sector wasfaced with a new cost-price-demandequation, to which it had to adjustquickly. In this environment, thebanking system had to deal withchallenges on the liquidity front andthe risk of increased corporatedefaults given the sudden decline incorporate profitability. Lowerbusiness confidence and increasedrisk perception adversely impactedbanking system credit growth, both inthe retail and corporate segments.

The fact that we successfullynavigated these challenges is no smallachievement. The basis of thisachievement was the inherent

soundness of the Indian bankingsystem. The banking system enteredthe global financial crisis in muchbetter shape than the previouseconomic down cycle of the 1990s. TheIndian banking system wascharacterised by healthy capitalratios, conservative leverage, stablefunding based largely on deposits anda healthy asset quality profile. It is alsoimportant to remember that the globalfinancial crisis did not have anyadverse impact on our domesticfundamentals and its impact thereforewas largely transitory.

As such, the regulatory response tothese developments was to ensurestability of the overall system whiledealing with the large and sudden

shock from the globalmarkets. As part of itsconfidence buildingmeasures, the ReserveBank of India significant-ly reduced interest ratesin the economy andprovided adequateliquidity support to allsectors.

Simultaneously, thegovernment announcedkey fiscal measuresaimed at both, supportingsectors facing difficultiesas well as maintaining anoverall demand impetusin the economy. Thesemeasures had astabilising impact on theeconomy and the bankingsector.

The development ofthe banking sector willmirror the country’seconomic growthmomentum. With theeconomy expected togrow at sustained highrates over the nextdecade, the opportunities

for the banking system will besignificant. Favourable demographicsand increasing incomes will continueto drive growth in retail banking,while increased investments,particularly in the infrastructuresector, will create opportunities incorporate banking.

As such, the domestic momentumitself has the potential to elevate theIndian banking system to globalprominence. Continuedliberalisation, focus on enhancingfinancial deepening and increasingsystemic efficiency would be the keyto realising this potential.

The author is chairman,ICICI Bank

banking on nmacs

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