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Ratnakar Bank is the Fastest Growing Small Bank

(Disclaimer:I am market marking in Ratnakar Bank)
For 27 long years, a day at Bank of America (BankAm) India began with Vishwavir Ahuja, Vish to many, calling on the who’s who of the India Inc rolodex. So, it came as quite a shock when he quit as BankAm India CEO in July 2009 to move to the Kolhapur-based Ratnakar Bank, catering to the hinterland of Maharashtra, Karnataka and Goa.

“I wanted to do something that would keep me busy beyond retirement age, and help me leave behind a legacy,” says Ahuja. His bet: Ratnakar Bank could move into a higher orbit with the right mix of brains and capital. But the ‘old’ private bank, set up in 1943, had its own concerns, and Reserve Bank of India had appointed two board directors to keep a watch on its affairs. Besides, both Indiabulls and Kotak Mahindra Bank were eyeing Ratnakar Bank.

But in just three years, Ahuja and his team have delivered. From being a relatively unknown entity, it has gone on to become the Fastest Growing Small Bank in the BW | Businessworld Best Banks Survey 2013. Advances increased 54.30 per cent to Rs 6,376.21 crore in end-March 2013; deposits 75.99 per cent to Rs 8,340.52 crore.

After the new team came on board, advances grew at a compound annual growth rate of 76 per cent (it was Rs 1,170 crore in FY10) and deposits at 74 per cent (Rs 1,585 crore). Net profit in end-March 2013 rose by 29 per cent. “This growth in net profit is significant as it is against a backdrop of increasing investments in technology, branches and infrastructure,” points out Ahuja. The ramp-up from FY10 saw employee strength rise to 1,900 (from 700), branches to 130 (from 89), ATMs to 184 (from 13) and clients to 450,000 (from 300,000).

By end-2015, these numbers should read: 3,300 employees, 225 branches, 500 ATMs and 900,000 clients. It’s in such a scenario, where a bank management’s attention is stretched to the limit, that dud loans raise their head. At Ratnakar Bank, gross non-performing assets (NPA) were at 0.8 per cent with the net NPAs at 0.4 per cent.

Ratnakar Bank will float its maiden public issue of shares in mid-2015, to raise Rs 700 crore. As for Ahuja, he will soon be the MD and CEO of the rebranded RBL Bank. The French firm, Penn Schoen Berland, is advising it, and McCann is taking care of the communications.

All of this has led to whispers that Ahuja and his A-team may soon get calls from a few big banks — and those lucky enough to bag a new private bank licence. –from BusinessWorld

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