AgTalk | We'll grow faster than the market: ING Vysya Bank's Bhandari

A seasoned banker with 27 years experience behind him, Shailendra Bhandari , MD & CEO, ING Vysya  Bank has an impressive track-record of accomplishments. Prior to this he has served as Head of Private Equity, Tata Capital and as CEO & MD, Centurion Bank of Punjab. He is widely credited for successfully turning around Centurion Bank and achieving significant growth. Bhandari has a Masters degree in Management (MBA) from IIM, Ahmedabad, and also holds a BA (Economics) degree from St. Stephen’s College, Delhi.

Having joined the bank on 6th August 2009 for a period of three years, Reserve Bank of India accorded its approval for his re-appointment as MD & CEO of the bank for a further period of three years effective 5th August 2012.

With a lot happening on the bank front, Adgully recently caught up with Shailendra Bhandari, Managing Director & Chief Executive Officer, IVB to know more about their plans ahead. Following are the excerpts from the conversation:

Adgully (AG): How would you define your journey with IVB?

Shailendra Bhandari (SB): It’s been four years that I have been with ING Vysya Bank and the time & journey have been quite good. We have seen growth too. Personally on the professional front I would say it’s more than 20 years that I have been in the industry which again have been really encouraging. The bank has a potential to do large business though due to certain financial parameters may it be economy, technology etc the bank lacked and missed on certain things.

AG: You have been in the industry for more than 20 years, how have you seen the banking sector evolve and grow? Also what percentage share does IVB has of the banking pie?

SB: Well, I would say with time the entire sector has grown quite literally. Though the economic condition has varied ‘n’ number of times and the banking sector too has seen ups and downs. Coming to ING Vysya, I would say that we have witnessed a lot of ups and downs too. But we took all those as learning challenges and have aggressively moved towards conquering those. Well, when it comes to market share I would say that our market share is too small. Our total deposits are just Rs 14,000 crores but that sounds too much. However when it is compared to India’s total deposits it is just one per cent or may lower than that. But that’s good news for us because what it means is that with such a low market share we can grow even when the market is not growing. We see a lot of opportunities coming our way.

We believe that we would grow faster than the market. As per records, last year, when market grew by 14 per cent we grew by 19 per cent. Before that when the market growth rate was 16 per cent our growth rate was 21 per cent.

AG: The bank has recently announced its June quarter workings? Are you satisfied with the same?

SB: Yes. Our net profit for the first quarter ending June 30, 2013 increased significantly by 34.58 per cent to Rs 175.12 crores, compared with Rs 130.12 crores in the same period the previous year. The bank’s total income was also up 15.6 per cent, at Rs 1,553.08 crores for Q1 as against Rs 1,342.36 crores same period last year. EPS (basic) stood at Rs 11.25 compared with Rs 8.66 in the same period the previous year. The operating profit was higher by 50.3 per cent to Rs 326.9 crores and cost to income ratio improved to 51.2 per cent from 57.7 per cent.

We continue to deliver on our core parameters. Our customer assets grew by 18.2 per cent. There was significant improvement in net interest margins (NIM) at 3.56 per cent and return on assets (ROA) at 1.33 per cent for the quarter (3.29 per cent and 1.11 per cent respectively for the similar previous quarter).

In particular, the bank’s NIM was strong in what is normally a seasonally weak quarter, and we are well on track to more than match the full-year NIM of 3.52 per cent achieved last year. Net interest income (NII) for the quarter increased by 23.9 per cent to Rs 425.4 crores (Rs 343.3 crores). The asset quality continued to be robust, with gross NPAs and net NPAs at 1.75 per cent and 0.19 per cent respectively as on June 30, 2013 (1.97 per cent and 0.19 per cent respectively). Overall the asset quality in our other businesses, including SME and Consumer Finance remained solid.

AG: What kind of strategies you feel would gear up your growth?

SB: On the assets side, our focus is pretty clear that is we would be focusing on SMEs, large corporates and MNCs. On the consumer finance side we have been slow so we have been working on our strategies there. We are really watchful of the steps we take and how we take them depending on the size of the sectors we enter.

AG: What are the bank’s future plans in the next one-to-two years?

SB: We plan to add 30-40 branches to our existing network of about 550 branches. About five years ago, 85-90 per cent of our branches were in the South. However, over the last 3-4 years, most branches that we added were outside the southern region. So, the percentage has come down to about 65 per cent. We will continue to be predominantly South-based but with a significant footprint across the country.

AG: ING Vysya Bank and MasterCard recently announced the launch of ING MasterCard Premium Debit Cards. Kindly elaborate on the same?

SB: The new range of premium cards, offer customers the choice to select their own card background and an industry-first spend-milestone based rewards programme. ING MasterCard Premium Debit Cards will have three new card variants – Titanium, My World and World Exclusive, with all the three variants offering premium features.

Also if we see, Indian customers use their debit cards to shop hence debit spends are increasing by 38 per cent. Surprisingly however, Indian customers redeem only 18 per cent of their reward points. We want to change that by pampering our customers with a great rewards program that makes it easy to earn points and even easier to redeem the points for guaranteed rewards. I am happy to launch the ING Premium Debit range and look forward to further strengthening our decade long relationship with MasterCard.

AG: What was the basic rationale behind launching the new range of debit cards?

SB: Well, the basic idea is to make shopping easier for our consumers and change their mind sets about the debit card. This would also enable the consumers to use more of their debits cards. The current development I would say in this sector is that last year the growth in terms of issuing debit cards had grown by 11 per cent but the growth in terms of using debit cards for shopping grew by 21 per cent. The annual spend increase by debit card was 40 per cent. So this clearly shows that people are not only using debit cards but are spending really big on the same.

AG: How would these cards stand unique in the market?

SB: Well, the designing itself is unique and interesting. The cards promise to be easy and simple. There is no complicated point structure and no complex redemption process. Customers can track their spends, reward points earned and redeem gifts through their internet banking account. Customers can now choose the look and feel of their debit cards from a selection of 50 images covering segments like sports, entertainment, lifestyle etc. All premium cards offer higher ATM withdrawal limit along with several international offers from MasterCard on travel, entertainment and dining.

AG: Where do you see the industry heading in the next three four years?

SB: Well, the industry has registered a good growth in the past years and going forward also we see a lot of promise. We expect the spends to double in the next few years.

AG: What trends do you see coming in?

SB: More spends and usage of debit cards, more online payments which is anyways growing really faster.