Consistency is the name of the game

HDFC Bank has put in place a robust strategy and performed well in difficult economic circumstances, irrespective of the growth rate of the Indian economy

It is often said banks are a reflection of the economy. This is more true for a country in which 70 per cent of business is controlled by government-run banks and their performance fluctuates widely with the economy's growth rate. However, there is one bank which has bucked the trend, not once or twice, but year after year.

So, it was not a surprise that a five-member jury headed by Subir Gokarn, former deputy governor of the Reserve Bank of India, selected Aditya Puri, managing director of HDFC Bank, the second largest private sector bank in the country, as the BS Banker of the Year 2013. This was the second occasion in four years that Puri has been chosen as the BS Banker of the year.
 
The other jury members were Bharat Doshi, chairman, Mahindra &Mahindra Financial Services; M D Mallya, former chairman and managing director of Bank of Baroda (who also won the award twice); S Naganath, president and chief investment officer, DSP Blackrock Investment Managers; and Anil Singhvi, a former ace deal-maker and chairman, Ican Advisors.

The parameters adopted by the jury to gauge performance were total assets, net profit, return on assets, net interest margin, gross non-performing assets and market capitalisation. The mean ranks of the 13 banks were obtained (based on the parameters) and a couple of bankers from the private sector emerged as finalists after deliberations which lasted for close to two hours. Two parameters were applied for the initial screening - 10 per cent compounded average annual growth rate for the last three years and minimum asset size of Rs 50,000 crore in 2012-13.

"Firstly we evaluated the contenders on key financial parameters in terms of growth, profitability, efficiency and asset quality. On these parameters, the jury members unanimously choose HDFC Bank as number 1. We also evaluated the market performance and HDFC Bank's returns over a number of years. This showed that the bank has put in a robust strategy and performed well in difficult economic circumstances. Puri is the face of the bank," Gokarn said while announcing the winner.

Apart from asset quality, HDFC Bank scored high on all the parameters, reflecting consistency of performance. In an uncertain economic environment where economic growth fell to a decadal-low of five per cent, a 21 per cent net profit CAGR, coupled with one per cent net NPA, impressed the Jury members. The bank was also in the top bracket in other efficiency parameters and net interest margin parameters.