HDFC Bank Managing Director Aditya Puri is the Business Standard Banker of the Year.
Puri has won the award (on the basis of a poll among the newspaper’s senior editors) for transforming the 14-year old institution into a financial powerhouse. HDFC Bank today has the largest branch network (1,400) among all private sector banks in the country, courtesy the acquisition of Centurion Bank of Punjab.
The smooth integration of the buy tilted the scales in his favour. In many ways, Puri is a pioneer in banking M&As, having acquired Times Bank back in 2000. That was the first merger of two new-generation private banks in the country.
Puri said his bank’s strategy of sticking to prudent lending policies and staying away from the Indian sub-prime market of small-ticket personal loans and avoiding participating in any price war to garner market share have helped (See interview in the Business Standard Banking Annual being distributed today).
HDFC Bank, which has often been criticised by its peers for being too conservative, has managed to put up a healthy show year after year. At a time when most banks are scaling back growth to ensure that loan books look healthy, Puri said it is business as usual for his bank and he is expecting his business to grow by around 25 per cent.
“We got a bank with a huge distribution network, though it was not used to the extent it should have because a lack of products,” the 58-year-old MD said.
The magazine also covers a round table discussion involving the CEOs of eight leading banks on the topic: “Banking in tough times.”
Apart from Puri, the panelists were State Bank of India Chairman OP Bhatt, ICICI Bank Joint MD & CFO Chanda Kochhar, Citi CEO for South Asia Sanjay Nayar, Deutsche Bank India MD & CEO Gunit Chadha, Central Bank of India Chairperson & MD H A Daruwala, Standard Chartered Bank Regional CEO Neeraj Swaroop and Bank of India Chairman & MD T S Narayanasami.
The participants were optimistic about medium- and long-term growth prospects of the Indian economy, but expressed concern over long-term liquidity and deteriorating asset quality.
The bullishness on growth stemmed from the strong domestic demand, the demographic advantage and a strong financial system that has largely escaped the global financial tsunami.
The worries were long-term availability of funds with overseas and equity funding drying up and the prospects of rising bad debt following the downturn in the economy.
Though the demand for funds is expected to come down over the next 24 months or so, bankers like Kochhar said that that many companies are putting projects on hold as they are more focused on meeting their immediate cash requirements.
Size was another issue that came up during the discussions, one of the points being whether 87 banks with a total market capitalisation of $140 billion and a total balance-sheet of less than $1 trillion can meet the demands of a rapidly growing economy.
