Innholdsfortegnelse for 22-Mar-20 i Business Today

Banking is not for the faint-hearted. Big bucks chase big dreams calling for big decisions. Undoubtedly, it leads to big successes and, often, big failures as well. But the great fall is triggered by the minutest of errors of judgement. Or corruption, as several high-profile bank CEOs, who fell prey to the temptations, have proved in the past three years. Business Today’s annual study of Best Banks is always an opportunity to reflect on the sector that powers the economy’s growth engines. This year’s package led by Executive Editor Anand Adhikari has concluded that Indian banking is coming of age and is finally the Big Boys’ Club. Especially, with the Centre working on the merger of 10 state-run banks into four with assets size of ₹10 lakh crore-plus and mid-sized…

↘ The number of active mobile subscribers (those who use services at least once a month) increased by 3.5 million in December 2019 after a decline of 2.1 million in November ↘ Reliance Jio added 3 million subscribers, Bharti 1.4 million, whereas Vodafone Idea lost 1.1 million ↘ However, there has been a decline of 3.2 million in total wireless subscriber base to 1,151 million in December 2019 ↘ The main reason for the fall is the increase in interconnect usage charges by 25-30% Source: Motilal Oswal Financial Services…

The worst seems to be over for the ₹166 lakh crore banking industry. The merger of 10 public sector banks into four large banks is expected to bring scale. De-risking by new leaders at large private banks, especially ICI-CI Bank and Axis Bank, is showing results. Asset quality deterioration has halted after almost seven years. Balance sheet clean-up is almost complete with banks focusing on strengthening CASA (current account savings account) base, NPA provisioning coverage and return on equity. Last, but not the least, Indian banking returned to profitability in the first half of FY20. This will gather steam as loan recoveries under the insolvency and bankruptcy code (IBC) pick up further. The BT-KPMG Best Banks and Fintech study took a deep dive into financials of banks for FY19 when…

A decade ago, the market share of State Bank of India (SBI) in deposits and advances was around 18 per cent. Today, it is 23 per cent. The merger with five associate banks helped but, to its credit, India’s largest bank with assets of ₹36 lakh crore hasn’t lost market share in the last few years despite stiff competition from market-savvy private banks, which have doubled their market share from 15 per cent to around 30 per cent in the last one decade. SBI has also been way ahead of other public sector banks (PSBs) in creating a universal banking model, expanding retail assets, technology adoption and nurturing a high-quality human resource pool. Eighteen months ago, the government selected half-a-dozen managing directors (MDs) and Deputy MDs from SBI to fill…

In the five years since Bandhan turned into a full-fledged bank in August 2015, Chandra Shekhar Ghosh, who founded the microfinance organisation in 2001, has kept up its growth momentum. Bandhan Bank, which has been selected as the Best Small Bank, is a story of business growth. When Ghosh began in 2001, the microfinance institution (MFI) would dish out small loans of ₹1,000-3,000 to economically weaker sections in Kolkata’s suburban Konnagar town and the nearby Bagnan area. In less than a decade, by 2010, Bandhan had emerged as the largest MFI in the country. As a bank, too, the pace continued. In the 2019 December quarter, it added 0.73 million customers, taking its total customer base to 19 million (with micro banking share at 14.56 million). In the same quarter,…

With continuous tech innovation and focus on business expansion, JP Morgan has widened its client-base across multinational companies, large Indian corporates and financial institutions in India. It has now set its eyes on emerging businesses, for which the company started its mid-sized local corporate business, says Kalpana Morparia, JP Morgan’s Chairman for South and Southeast Asia. With 28.75 per cent growth in operating profits in FY19 and 53.17 per cent jump in deposits, and superior show on some other parameters, JP Morgan was adjudged the best foreign bank in BT-KPMG Best Bank Study even as other foreign banks such as Citibank, Standard Chartered Bank, HSBC and Deutsche Bank had larger balance sheets. Picking Up Speed In July 2019, JP Morgan announced that it would expand its commercial banking operations by…

Opening current account via digital app in a few hours All business-banking transactions done digitally and on-the-go Instant overdraft facility up to ₹15 lakh Instant overdraft facility based on GST details up to ₹2 crore Instant tax payments Digital platform for export-import transactions Platform for quick and convenient credit of inward remittances Point-of-Sale (PoS) multi-modal mobile app Overdraft facilities open to non-customers of the bank, too Integrated payments solution using tie-up with popular ERP solution providers Mobile banking app for rural customers in 11 Indian languages and English…

Natural Language Processing: NLP is being used to gauge a student’s comprehension abilities, analyse sentiment during live classes Face recognition: Used to analyse student engagement, teacher effectiveness, learning outcomes Match-making tools: Often based on AI; help students identify the best colleges and courses Bandwidth optimisation technology: Is aiding live tutoring, even in low network areas Augmented reality (AR)/Virtual Reality (VR): These are helping students with immersive and experiential learning…

The ever-growing bucket list - that’s the story of everyone’s life. Vikaas Sachdeva, CEO, Emkay Investment Managers, found a way out. “I dedicate each quarter to accomplish a thing. It could be learning skills such as playing guitar, lawn tennis, table tennis or tasks such as getting investments and taxes right or finishing books on my shelf,” he says. For two quarters in a row, he resolved to complete as many National Institute of Securities Markets courses as possible. “I wrote at least 10 exams and was the oldest person in the exam hall.” Now Sachdeva is running marathons. “Three days a week are for running, another three for weight-lifting and one day for yoga,” he says. His bucket list has one permanent fixture. Sachdeva loves watching sports live. “I…

All CEOs try to stick to a strict diet regime. Some succeed while most fail to maintain it in the longer term. Then, there is Jack Dorsey, CEO, Twitter, and CEO and Chairman of Square, a payment processing product. The 43-year-old has adopted an intermittent fasting schedule — he eats during a window of six to eight hours and fasts for the rest of the day. Dorsey eats only dinner. His meal is reported to have fish, chicken or steak and a lot of greens. That’s followed by mixed berries for dessert. Dorsey claims the strict regime helps him "stay sharper". As if maintaining that diet regime was not enough, Dorsey walks the five miles to work three times a week. On the other two days, he works out of…

OWNER’S PRIDE FPI holdings in BSE 200 firms were $451 billion in December 2019 compared with $419 billion at the end of September 2019. This translated into a seven-quarter high ownership of 24.3 per cent BULLISH BETS Banks and insurance have seen steady FPI buying since the Dec 2018 quarter OVERALL SHOW After pulling out $3.17 billion in the second quarter of FY20, FPIs bought equities worth $6.07 billion in Dec 2019 NEGATIVE VIEW IT services, auto & components and consumer staples companies have seen the steepest decline in FPI stakes over the past five quarters FPIs' MOST FAVOURED STOCKS Among the BSE 200 index companies, the highest increase in last two quarters was in Zee Entertainment, Bandhan Bank and RBL Bank OUT OF FAVOUR They sold large stakes in…

As the search for a new managing director intensifies at India’s largest private bank, Aditya Puri, MD and CEO, HDFC Bank, has been shuttling from one destination to the other meeting customers, bank employees and government officials. A few weeks back, Puri was in Madikeri, a hill town in Karnataka. Over the past few months, the 69-year-old banker travelled to Uttaranchal, Himachal Pradesh and Sikkim to study customer needs and understand what the employees can do to build the bank further. While he will retire in October 2020, he doesn’t want to sit and think back about how he built the bank over the last 25 years, and which now has assets of ₹12 lakh crore, but work towards its future. HDFC Bank, which started operations in 1994 with Puri…

Uday Kotak-led Kotak Mahindra Bank joined the league of large banks in FY19. It made a smashing entry at the third slot after HDFC Bank and Axis Bank in overall ranking in the BT-KPMG Study. In fact, it emerged as the fastest growing bank in the large bank category. It scored high in deposit, advances and operating profit growth. At a time when large banks, especially private sector banks, have been facing issues of leadership, asset quality and capital, the new generation bank took a lead in many performance parameters. The bank’s three-year CAGR in deposits and advances was 17-21 per cent. Similarly, three-year CAGR in operating profits was the highest among the large banks. The bank is ready to take the lead as it has a stable senior management…

Chandra Shekhar Ghosh founded Bandhan in 2001 as a not-for-profit micro-lending institution, giving loans of as low as ₹1,000 to the economically weaker sections in Kolkata’s suburban Konnagar town and the nearby Bagnan area By 2010, Bandhan had emerged as the largest microfinance institution in the country As a bank, it added 0.73 million customers in the December quarter of FY20, taking its customer base to 19 million It has a majority of micro banking customers – 14.56 million. The share of non-micro banking is 4.17 million…

Foreign banks in India have restricted space as most operate as a branch of the parent. Given the constraints, Bank of America has shown encouraging results. In fact, it is ahead of some of the marquee foreign bank names in the industry. Be it Citi, StanChart or HSBC, the ₹54,070 crore balance sheet size Bank of America has better ratios in areas like cost to income, return on assets and return on capital employed. The capital adequacy at 24.68 per cent is the highest in the category. Its four branches serve top corporate clients in areas like forex solutions, trading and hedging, rupee and forex working capital loans, structured finance and global transaction services. Over the years, the bank has taken exposure to sectors like infrastructure, engineering, chemicals, beverages and…

Nearly two decades ago, enterprise solutions such as ERP (enterprise resource planning) stormed the corporate world, offering broad and complex solutions. They created an impression that no space will be left for smaller business solutions providers. “But fintech firms cannot be swept aside given their ability to plug in where ERP solutions are weak, and provide niche offerings,” says Ajay Adiseshann, Founder and CEO, PayMate, a B2B payments solution provider, and the winner of BT-KPMG Best Banks award in the fintech-payments category. “ERPs’ IT legacy is all about millions of dollars in deployment and then management. Any change costs a lot. So, for them to change their model overnight is going to be impossible. Ours is transactional,” claims Adiseshann, whose fintech firm PayMate is making an annualised transaction volume of…

What is the current focus at Novartis? Right now, the focus is about 80 per cent innovative medicines and 20 per cent generics. It is a good mix of long-term and short-term. We have 15 launches coming up in innovative medicines. That, I think, is the highest in the industry. We got six new drug approvals last year. We have 165 projects in drug development, which will hopefully be the next wave of innovation at Novartis. It’s the right balance. Some of this technology will take longer to evolve. Some of them are near-term RNA interference, and to some extent cell therapy and gene therapy. But in the longer term, we will need these technologies to mature. So this will be a 5-10-year journey. We try to balance as we…

Uncertainty over the new CEO continues as Aditya Puri is set to retire in October 2020 Gross NPAs are rising — 1.05% in March 2017, 1.3% in March 2018, 1.36% in March 2019 and 1.42% in September 2019 Massive capacity addition in bank’s internet banking and application services Has launched a large non-banking subsidiary — HDB Financial Services Well-balanced loan mix of retail and wholesale Expanding foothold in rural India with retail assets Wholesale banking recorded a healthy 31.9% growth in FY19 Business in semi-urban and rural India is growing at twice the rate of urban India…

A decade ago, when Romesh Sobti joined the Hindujas-owned IndusInd Bank from ABN AMRO, the mid-sized private sector bank, with assets of ₹25,000 crore, was languishing. Return on assets (ROA) was a rock-bottom 0.34 per cent. Net interest margins (NIMs), the interest earned over interest paid, were 1.52 per cent. Return on equity (RoE), tracked closely by investors, was 6.76 per cent. Today, as Sobti gets ready to hand over the baton to Sumant Kapthalia after turning 70, the bank is at the top of the heap. In the past decade, assets have grown 13 times to ₹3.07 lakh crore, RoA has pole-vaulted to 1.82 per cent, NIMs have widened to 4.15 per cent, one of the best in the industry, and RoE has jumped to 15.62 per cent, which…

RBL Bank, which saw a massive transformation in the last decade from the erstwhile Ratnakar Bank, has emerged as a growth winner in the BT-KPMG Best Banks Study. The private sector bank has been growing its deposits and advances at a compounded rate of over 30 per cent for the past three years. Its operating profits have grown at a much higher compounded rate of 50 per cent in the last three years. There is similar growth in fee income. The credit goes to Vishwavir Ahuja, MD and CEO of the bank, who has been initiating changes since 2010. The bank, which has a strong presence in semi-urban and rural areas and has 32 per cent of its portfolio in retail assets, has been leveraging technology and digitisation tools to…

With a focus on small entrepreneurs, ICICI Bank has extended its instant banking platform InstaBiz to micro, small and medium enterprises (MSMEs), marrying digital innovation with data-led processes. The aim is to solve some of the problems that MSMEs face – mainly absence of adequate and timely banking finance and limited capital. InstaBiz allows MSMEs and entrepreneurs to under-take business-banking transactions digitally, doing away with the need for branch visits. The platform provides access to instant overdraft facility even to non-customers of the bank; instant tax payments; and inward remittances. In all, it offers about 115 services, under five broad categories – general transactions, GST compliance, credit for working capital and business expansion, export-import (Exim) compliance and cross-border solutions. ICICI Bank is named the winner in the Best Innovation category…

Cloud-based platform for transaction automation in SMEs and supply chain financing Single-window communication between buyers and suppliers Pivoted successfully from B2C to B2B Has received over $40 million in investments Plans to go global by expanding in CEMEA (Central and Eastern Europe, Middle East and Africa) region, partnering with Visa 50,000+ businesses use the platform in India Has clocked over $5 billion in annualised transaction volumes Provided $325 million in working capital, via commercial cards…

Public sector banks (PSBs) in India have been playing an important role in the banking system and the economy since 1970. They have earned the trust and goodwill across customer segments and have also been driving the social and financial inclusion agenda through their rural presence, sponsorship of Regional Rural Banks (RRBs), support to MSMEs and fostering microfinance. The Indian banking landscape has changed dramatically over the past decade with PSBs steadily losing market share to private sector banks. As per the RBI Report on Trends and Progress of Banking 2018/19, from a high of 74 per cent in 2010, PSBs’ share of banking assets has steadily declined to 61 per cent in 2019. There have been several reasons for, primary being the NPA crisis, which has plagued PSBs since…

People often face tough choices while buying investment and insurance products. This is because few have the time or the expertise to do their own research. BT-MT Financial Awards are an attempt to identify the best mutual funds, pension funds and insurance products and their providers. This year too, we shortlisted the nominees after a rigorous quantitative analysis. The final winners were selected after extensive deliberations by a jury led by former LIC Chairman V.K. Sharma. Out of the 14 awards, seven were for mutual funds, one for pension funds and six for insurance. Here are the winners and what made them stand out. MUTUAL FUNDS BEST FUND HOUSE (OVERALL) — KOTAK MUTUAL FUND Kotak MF’s seven funds have four- and five-star rankings in debt and equity categories. Apart from…

Basketball has always been a stress buster for Gerd Hoefner, Director and President, Siemens Healthcare. Hoefner served as a coach-manager for his basketball team and played at the semi-professional level for 25 years as a player coach. While he had to cut short his basketball journey due to a knee injury, he now nurtures his love for the game by playing with his daughters. Hoefner started playing in 1972 during his schooling days at Lohr, Germany. "Our local sports club Turnund Sportverein von (TSV), which was active in soccer and other sports, formed a basketball team. We soon began competing at different leagues in Bavaria and gained fame by winning championships," he says. Hoefner opted for business but continued to serve as coach-manager at his basketball club. Hoefner believes everyone…