Connect with Arindam chaudhuri
Follow
Arindam Chaudhuri @
 |
 |
 |
 |
|---|
CONTACT US
Have a question or enquiry?
Email us @
360@powerbrandsindia.com
expert opinion
 |
|
 |
Hidehiko Tanaka |
 |
J. Patrick Doyle, Global President & CEO, Domino’s Pizza |
 |
Anisha Motwani, Director and CMO,MNYL Insurance,speaks about company’s segmentation |
 |
GAURAV MAURYA President, Franchise India, talks about his journey.. |
 |
George Alexander Muthoot, Managing Director, Muthoot Finance Ltd |
 |
K R Kim, Vice Chairman & CEO, Videocon Industries |
 |
L K Gupta, Chief Marketing Officer of LG Electronics India |
 |
Mohit Khattar, MD, Godrej Nature’s Basket, talks about the peculiarities.. |
 |
Rajat Bal, GM (EMEA), i.Tech Dynamic reveals his company’s India plans |
 |
Rana Kapoor, MD and CEO, Yes Bank, speaks about how the bank has grown commendably |
Corporate Edition
 |
 |
 |
|
showcase
4ps B&M ranking
India's best B-school
100 brands that rocked india
india's best marketed brands
Experts Interview
P. K. Anand
Executive Director,Punjab & Sind Bank in conversation
It is the smallest of all the PSU banks. But, outperforming the average growth rate of the sector in just five years, Punjab & Sind Bank has climbed the ladder from Rs.250 billion to Rs.890 billion, and now it stands on the same orbit as the likes of Dena Bank and Vijaya Bank. Set to go public in near future, P. K. Anand tells B&E how the bank is planning to attain sustained growth in the long run.
Q:Banking was one of the key industries to face the slowdown blues. How much did it affect you?
P. K. Anand: Our growth in the last five years has been very satisfactory. In fact, we have grown above the banking average. Our deposits and advances have grown at a CAGR of 24% and 36.25% respectively. Our overall business too has grown at 31.1% during the period and now we offer an EPS (earning per share) of 26.98%. At the same time, our gross non performing assets are at a low of 0.63%, which happens to be the lowest in the banking domain.
Q: You are planning to go public soon. How much funds are you expecting to raise?
P. K. Anand: The issue will be of 40 million shares with a face value of Rs.10. Through this issue, the government is planning to bring down its stake to 82% from the existing 100%. But what’s worth noticing is the fact that after the issue, the book value of our share will move upward to Rs.138 for the fact that the entire proceeds will come back to the bank.
Q: How are you preparing yourself for the public issue?
P. K. Anand: We have just completed our QIP road shows in Mumbai, Hong Kong, Singapore and London. The response so far has been very encouraging because the Indian growth story is strong and the appetite for public sector banks is there.
Q: You have a very strong branch network of 928 branches but a poor ATM network (only 63 ATMs). Going by the cost factor, an ATM is more economical than a branch. Can you justify such an odd strategy?
P. K. Anand: One of the main reasons behind the same is our tie-up with the National Financial Switch, which allows our customers to use the ATM network of other banks associated with the NFS scheme. Meanwhile, we are also trying to increase our own ATM network. Like on Dhanteras, we installed 10 ATMs and plan to repeat the exercise soon. In fact, we are considering the continuous addition to our existing network in blocks of 10-20 ATMs. We are targeting to add another 100 ATMs in this year itself. Apart from that, we have plans to increase our delivery channels as well. At present we have around 920 channels, and planning to increase it to 1,100 by next year.
Q: You are associated with an image that depicts you more as a regional player. Post the IPO, do you plan to increase your footsteps to the other parts of the country?
P. K. Anand: At present, we are largely concentrated in the North. And the region still holds a lot of scope. There are many places in the region which are relatively unexplored. So, we plan to explore such untapped places first. Having said that, there is no denying that we have plans to spread out to the other parts of the country. In fact, out of the 90 new branches we are planning to open soon, 55 to 60 will be outside the Northern region.
Q: Your average net interest margin (NIM) at present is at a low of 2.50%. Is it because you have problems in raising low cost deposits?
P. K. Anand: There were a couple of reasons for which our NIM went low some time ago. Traditionally, our NIM was over 3%. But we had to make a few sacrifices to achieve the kind of growth we have exhibited in the last few years. We had to resort to a little low NIM to fund our growth and credit needs. However, we have now reached that critical mass where we can moderate our growth. So, we are now planning to strike a balance between growth and better ratios. Nevertheless, our NIM has already improved from 2.45% to 2.79%; but we are not satisfied with this figure as we want it to be above 3%. We have plans to resort to CASA deposits, which will help us to improve our NIM. In fact, the branches we are opening in the rural areas will also help us a lot in this direction as every branch that we are opening in these areas is getting us CASA of Rs.50 to Rs.100 million. In addition to this, we will also be running a CASA scheme to increase our deposits. Last year, we ran a scheme and managed to mop up deposits worth Rs.15 billion in just 3 months time. We are planning to run similar schemes this time also... and very soon.
Q: Are you looking at other areas like fee-based income to boost your income in the near future?
P. K. Anand: We get additional income from things like letter of credits, bill guarantees, upfront fees, processing fees et al, which are part of normal banking activities. Besides, we are into selling third party products, like life insurance products for Aviva Life Insurance, and non-life products for Bajaj Allianz. Of late, we have started taking this quite seriously. Thus, we are recruiting more people and getting them trained to boost revenue from these sources. Apart from these, we also sell products like gold coins on different occasions. Like on Dhanteras, we launched our gold coin scheme and sold roughly 70 to 80 kgs of gold in one day. In terms of additional revenue sources, recently, we are also eying micro insurance sector and are getting into loan syndication in a small way. But then, at present, it’s the fee income and bank assurance where we are betting big on.
Q:Considering the entry of more number of foreign banks and new licensing, Indian banking sector is set for some serious competition in the days to come. Being a small bank, do you think that your existence may come under threat then?
P. K. Anand: I think we will remain light on our feet because of the small size; ourturn around time and decision making will remain very fast. For example: I have 400 branches and 12 zonal offices in Punjab. So, all the proposals that come to these 400 branch heads can be quickly sent forward to the zonal heads and decisions can be taken super fast. As a result, it will not be necessary for the customer to go to third or fourth level managers, and his problems can be sorted out quickly making him happy and loyal.
Home | About Planman Media | About Planman Marcom | Offices | Privacy Policy | Disclaimer
Copyright © 2010 POWERBRANDS. All rights reserved.