Indian Banking 2020Giving wings to corporate

aspirations

Indian Banking 2020Giving wings to corporate

aspirations

2Giving wings to corporate aspirations

1,367

1,587

2,261

1,922

0

500

1,000

1,500

2,000

2,500

20102009

Profit Before Tax (Rs Crore)

Wholesale BankingRetail Banking

Source: IBA, Capitaline, Company ARs, BCG analysis

Segment contribution: Average for leading Indian banks

Corporate banking – a significant contributor to industry profits

3Giving wings to corporate aspirations

Top 3 new expectations from banks in the next decade

Sources: FICCI-BCG Market Survey; N = 100.

Small Medium Large

• Quality of relationship management

• Credit turnaround time

• All products that I need at one place

• Technology to integrate into my internal IT system

• All India presence / network

• Quality of relationship management

• Fund my M&A needs

• Support my international expansion

• Technology to integrate into my internal IT system

4Giving wings to corporate aspirations

Strong growth will continue over the next decade – with a shift in mix

23 23

78

100

20

0

Deposits

Advances

Fee Income

I-Banking

Treasury

2020P

38

24

8

2008-09

46

20

4

%

80

60

40

CAGR (09-20)

6x10x

7x

5x

6x

Corporate banking revenue pools

5Giving wings to corporate aspirations

Mixed views about prospects of disintermediation in corporate banking

Survey Q: Wholesale market in India will get disinter mediated and corporate will by pass banks to raise funds

9

18

36

27

9

0 50 100

7

29

64

0 50 100

No Opinion

Highly Unlikely

Unlikely

Likely

Highly Likely

% respondents % respondents

Public

Private/Foreign

Public Private/Foreign

Note : Sample Size - 14-PSU banks, 7-private banks, 4-Foreign BanksSource: IBA-BCG Market Survey 2010

6Giving wings to corporate aspirations

"Winners" see the crisis as an opportunity

Despite crisis, leading corporate banks generating strong and growing economic profit

Outperformance possible in all segments

'Transaction champion' strategy drives superior results

Superior risk management a major performance differentiator

Data transparency still a major challenge for corporate banks

'Blue Chip Corporate Banks' positioned to significantly outperform in coming years

Despite crisis, leading corporate banks generating strong and growing economic profit

Outperformance possible in all segments

'Transaction champion' strategy drives superior results

Superior risk management a major performance differentiator

Data transparency still a major challenge for corporate banks

'Blue Chip Corporate Banks' positioned to significantly outperform in coming years

Source: BCG Corporate Banking Benchmarking Study 2010

7Giving wings to corporate aspirations

Key success factors to win in Corporate Banking

Key Success Factors to win in Corporate Banking

End-to-endtransparen

cy

End-to-endtransparen

cy

•Transaction banking a major priority

•Solutions driven from clients' pain points

•Sales major focus for value creation

Premium client relationships

Transactionchampion

model

Risk culture

•Targeting high value client clusters

•Client experience driven distribution model

•Embedded risk understanding from front to back office

•Discipline to focus on core client relationships with multiple products

Enablers

Highperforman

ceorganizatio

n

Highperforman

ceorganizatio

n

8Giving wings to corporate aspirations

How will the corporate banking industry meet the "next decade's promise"?

How will the corporate banking industry meet the "next decade's promise"?How can the Indian banking industry best meet the evolving needs of large corporates?

• How important would it be for banks to have - international presence? Scale?

How would the investment banking industry evolve in India over the next 5-10 years?

• What does it mean – for Indian commercial banks? For Indian investment banks?

How can the Indian banking industry best meet the evolving needs of large corporates?

• How important would it be for banks to have - international presence? Scale?

How would the investment banking industry evolve in India over the next 5-10 years?

• What does it mean – for Indian commercial banks? For Indian investment banks?