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Asiamoney best bank awards 2019: India

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Award winners

Best domestic bank: Kotak Mahindra Bank

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 Dipak Gupta
What makes Kotak Mahindra Bank so good? Is it that it never seems to have a bad year? That its long-term strategic decisions tend to be good ones – in stark contrast to some of its peers?

Or perhaps it is the quality of senior management figures like joint managing director Dipak Gupta; head of corporate, institutional and investment banking KVS Manian; and group executive vice-chairman Uday Kotak.

It is rarely a first-mover, but always seems to wind up becoming an expert. It isn’t as big as some private-sector banks but then size, as determined by market value, isn’t everything.

Its shares outperformed those of its main rivals over the course of the review period, while net profit for the first nine months of 2018 rose 16.9% year on year – faster than any other first-tier lender.

Kotak Mahindra Bank is one of a trio of institutions that dominates wealth management, and was quick to spot the huge and enduring possibilities in distressed debt. The full-service lender is strong in offshore funds, one of the largest domestic custodians and an important provider of financial services to SMEs.

It has long been a pioneer in digital, being one of the first to launch banking services on WhatsApp and attracting over one million subscribers in the three months after its launch.

Then there’s investment banking. Providing world-class advisory to India’s largest companies, as well as to multinationals operating in Asia’s third-largest economy, has been integral to the Kotak brand from day one. In 2018, its team topped the IPO rankings, completing eight stock sales worth $153 million, and it was involved in many of the year’s biggest rights issues, block trades and qualified institutional placements.

A highly impressive financial institution that is at the peak of its powers, and getting better all the time.


Best corporate and investment bank: Citi

This is always a tough award to judge, in large part because being a dab hand in the capital markets does not automatically make a
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Pramit Jhaveri
bank a great corporate lender.

Even the big universal lenders aren’t great at both aspects of the financial arts everywhere they go. But Citi in India is one of the rare exceptions.

It serves more than 900 multinationals and 200 or so big local firms, supporting customer assets in excess of $32 billion, including credit disbursed domestically by offshore branches. Each year its book grows, as does its roster of big-ticket clients. Citi is the leading custodian bank in India, with more than $260 billion in assets under custody. It’s a top-three trade finance bank, a leading provider of FX services, and the number-one foreign bank in export flows, with a market share of 8.7%.

In investment banking, Citi remains as strong as ever. It was the leading bookrunner on equity and equity-linked issuances over the review period, the number two in onshore G3 debt sales, and the number three in completed M&A. In all, it helped clients raise $27.1 billion across equity, debt and loan markets, enabling the bank to post internal revenues of $1.74 billion in the calendar year 2018 – a record high. What impresses most about the lender, run by Pramit Jhaveri, chief executive of Citi India, and Ravi Kapoor, head of global banking, is its transaction consistency. When there is big deal to be done, whether a sovereign print or a market-moving IPO or a complex private placement, Citi is usually involved.Standout deals over the past year include a $485 million private placement by IndInfravit Trust, completed in May 2018, and the sale by Tata Sons in March 2018 of a 1.5% stake in TCS, which raised $1.4 billion, making it the largest onshore block trade in the TMT sector since 2015. Citi was a joint bookrunner on both.


Best international bank: Citi

India has been a tricky market for international banks to gauge in the years since the global financial crisis. Some have quit the market entirely while others have drastically streamlined their product range.

Citi has gone the other way, doubling down in south Asia’s dominant economy. It is big, pretty much omnipresent across corporate and investment banking, and profitable, reporting post-tax earnings of $522 million in the 12 months to the end of March 2018.

It is the largest foreign bank in wealth management, with assets under management of $4.9 billion, and the number-one issuer of credit cards among non-Indian lenders, with an 8.52% market share of card spend.

It is also the leading bookrunner on equity and equity-linked issuances, and ranks third, also in volume terms, on completed M&A transactions.

Citi stands apart yet again as the leading foreign player when it comes to electronic cash management and export flows, and is the number-one name in custody, with more than $260 billion in assets.

It boasts the lowest level of gross non-performing loans of all of its big foreign peers, and the biggest balance sheet.

In corporate banking, it is a true powerhouse, serving more than 200 big local firms and over 900 multinationals. In investment banking, it closed the book on another exceptional year. Citi helped clients to raise $27.1 billion across equity, debt and loan markets, and led many of the standout deals of the year.

All that is before we get to its consumer-banking platform, which is underpinned by its impressive array of digital services. Fingerprint and facial ID, seamless online bill payments, paperless investment services, a QR-based solution for credit card payments – they are all available via the bank’s mobile app.

Can any foreign lender realistically compete with Citi onshore? Not on current form.



Best for private banking: Edelweiss Private Wealth Management

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 Anshu Kapoor
Wealth management in India is intensely competitive – and for good reason. The number of high net-worth families is set to double by 2025, to 500,000, with a total cumulative net worth of $5 trillion. At least half of that additional wealth will be created by first-generation entrepreneurs, led by the country’s digital barons. Meanwhile, India is reckoned to have between 40 and 45 family offices, with average assets under management of $318 million. All those facts and figures are provided directly by Edelweiss Financial Services, the winner of this year’s award for India’s best provider of private wealth management.

Anshu Kapoor, head of private wealth management at Edelweiss, says three customer groups dominate its product offering: new- and next-generation entrepreneurs; C-suite executives who amass stock options; and family offices.

What impresses most is not so much the speed with which Edelweiss became one of the country’s big-three private wealth managers, but its steely-eyed determination to press home its advantage. Total assets under management rose 44% to $12.4 billion in the full year 2018, and are on track to hit $14.1 billion in 2019.

Edelweiss has offices in 10 domestic cities, and is looking to open more as wealth rises in second- and third-tier cities. Under the leadership of Kapoor and Rashesh Shah, the group chairman and chief executive, Edelweiss has grown into the country’s best provider of quality wealth-management products, ranging from succession planning and philanthropy to real estate and structured credit.

It was the first financial group to offer distressed assets and infrastructure yield funds, plus it organizes hundreds of annual town halls and workshops and has joined up with customer retention software company Salesforce to provide an enhanced digital experience for high net-worth customers.



Best digital bank: HDFC Bank

A good way to identify the best digital provider in any market is to ask the market. When Asiamoney sat down in early 2019 with the
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Aditya Puri
chief executives of India’s banks and asked them to identify the best provider of digital banking services, the answer came back crisp and clear: HDFC.

India’s largest private-sector lender by assets is a much-garlanded institution, but until recently its digital division was overlooked. However, over the last two years, under the leadership of long-standing managing director Aditya Puri, HDFC has become a genuine digital force. This is in large part because it chose to take a step back, take a hard look at what services customers wanted, and start working toward those goals.

At one end, this meant providing better simple services such as missed-call banking. At the other, it meant bringing financial services into the home, thanks to the rollout of encrypted banking via WhatsApp, and tie-ups with Internet of Things devices such as Amazon Echo and Google Home. Its Digital Vision plan, which takes the bank through to the end of 2020, also focuses on artificial intelligence, blockchain and augmented and virtual reality.

A big investment in robotic process automation will, HDFC reckons, lead to “a sea-change in account-opening and cross-selling”, boosting profits and improving customer engagement.

It is also engaging with digital on digital’s terms, by encouraging chaos now with the aim of harnessing it later. Thus, an annual hackathon’ encourages individuals and startups to compete to solve emerging digital-use cases, while its user-experience lab acts as a digital laboratory, harnessing and honing ideas to ensure that HDFC is delivering best-in-class services to its customers.

It is all overseen by a digital command centre that brings real-time intelligence to the group, helping HDFC to make informed commercial and strategic decisions.



Best bank for SMEs: Yes Bank

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 Ravneet Singh Gill
Founded in 2004, Yes Bank embraced new thinking from the outset. It saw early on that it would benefit by honing its marketing message and making its brand and branches look consistent and attractive. But it is in serving the country’s army of small and medium-sized enterprises that it really stands out.

Yes Bank rightly secures this award for the second year in a row. Its roster of SME clients reached 139,000 at the end of 2018, up 41% from the previous year, with outstanding loans to smaller firms up 62% over the same period, to Rs375 billion ($5.3 billion).

A long-time supporter of financial inclusion, Yes Bank has lent Rs5.5 billion to support SMEs and micro-sized firms under the rules of a state-backed scheme. It plays a pivotal role in supporting small firms that are owned and run by women or based in low-income states, and it recently teamed up with Wells Fargo and OPIC, the US government’s development finance institution, to channel $150 million in new funding to smaller companies.

As one of India’s most innovative lenders, Yes Bank creates new products tailored to the needs of small companies. These include smart overdrafts, which disburse up to Rs15 million in capital to SMEs struggling to generate a full financial statement.

Its digital Click-to-Credit platform, launched in 2018, helps SMEs to see how much they can borrow. But perhaps Yes Bank’s greatest feat has been its success in getting clients ready for the onset of GST. 

India’s single goods and services tax was introduced in July 2017, but firms of all sizes still grapple with the rules and the move to digital that it demands. Yes Bank has more than 100 GST-ready SME branches around the country, and it hosts more than 10,000 annual seminars at 20 locations to help the owners of small companies keep abreast of developments. SMEs flourished under Yes Bank’s outgoing chief executive Rana Kapoor, and will continue to do so under his successor, Ravneet Singh Gill. 



Best bank for CSR: Punjab National Bank

It hasn’t been the best of times for Punjab National Bank. A colossal fraud spotted in February 2018 came at a bad time for both the
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Sunil Mehta
bank and for a government keen to sort out its troubled state banks.

But amid all the chaos, the New Delhi lender, or more specifically its corporate social responsibility team, deserves great credit for keeping its eye on the ball.

For make no bones about it, Punjab National Bank’s CSR platform is impressive. Its primary aim of giving back to society is far from your standard bland corporate slogan.

Under the leadership of managing director and chief executive Sunil Mehta, the bank provides free medical camps, helps to build schools and hospitals, and promotes financial inclusion. The lender has placed itself at the heart of Pradhan Mantri Mudra Yojana, a government programme that aims to improve financial inclusion among the rural and the under-banked, and Standup India, a plan to boost entrepreneurship among the historically disadvantaged.

PNB is also using its vast network – it has 7,000 branches across India – wisely. Around 8,000 business correspondent agents are sent on the road with the aim of bringing the rural and unbanked into the formal financial system.

It also opened 12 dedicated farmers’ training centres, which teach members of the farming community to, among other things, manage their books, conserve rainwater and solar energy, and understand animal health and treatment. 

It has also opened 103 financial literacy and credit counselling centres, which provide no-frills face-to-face financial advice to all-comers, explaining in layman’s terms how to open a bank account, secure access to capital and manage a corporate or a household budget.

In recent years, Punjab National Bank hasn’t always been good at helping itself – it’s on track to post a loss in the financial year to the end of March 2019, before returning to profit – but to give credit where it is due, it is consistently good at helping others. 



Best for Microfinance: RBL Bank

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Vishwavir Ahuja
When Vishwavir Ahuja took over as managing director and chief executive of Ratnaker Bank in 2010, the lender was a small operator based in the Maharashtrian city of Kolhapur. Along with a group of veteran dealmakers and operators who cut their teeth at Citi or alongside him at BAML, Ahuja transformed RBL (as the lender was re-branded) into a national operator, investing heavily in its public image and in digital banking.

But, as Ahuja is quick to point out, the bank also focuses on supporting lower-earning individuals and small companies. At the end of 2018, 41% of the bank’s book comprised loans to retail, including microfinance, up from zero three years ago.

Its microfinance team has undergone its own transformation. In June 2018, the bank raised its stake in Mumbai-based micro-credit provider Swadhaar Finserve, to 100% from 60.48%, renaming its expanded microfinance division RBL FinServe.

The aim, says Harjeet Toor, head of retail, inclusion and rural business, was to transform RBL FinServe into the “market leader in the space of inclusive finance, catering to underserved households and small businesses”, and providing financial literacy training to people across the country.

And it is working. At the end of 2018, RBL FinServe had 940,000 customers, with the division boasting combined assets under management of Rs25 billion ($350 million).

Its microfinance business is expanding fast wherever you look. At the end of 2018, RBL Bank had 804 dedicated micro-banking branches, many of them in poorer states such as Bihar and Odisha, while it continues to expand its network of business correspondents, connecting itself to the remotest of villages.

New products are designed with the owners of small businesses in mind. Take the example of Hospicash, which extends financial support to any customer who becomes hospitalised. So far, 1.5 million have signed up to the service.