Sunday, March 17, 2013

P. K. Anand

Executive Director,Punjab & Sind Bank in conversation with B&E’s Avneesh Singh

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.

B&E: Banking was one of the key industries to face the slowdown blues. How much did it affect you?
P K Anand (PKA): 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.

B&E: You are planning to go public soon. How much funds are you expecting to raise?
PKA: 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.

B&E: How are you preparing yourself for the public issue?
PKA: 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.

B&E: 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?
PKA: 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.

B&E: 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?
PKA: 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.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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