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Shyam Srinivasan | Photo: Sidheekul Akber
Shyam Srinivasan's position in the banking sector is more or less akin to that of Rahul Dravid in cricket. In a mature and consistent style, his deliveries for the past 12 years in the Federal Bank as its captain have no parallels. While joining the bank in 2010, leaving the 'glamorous' job at global banking major Standard Chartered, the total business of Federal Bank was Rs 63000 crore. As he batted for 12 successive years standing as a great wall, the total business, which includes the deposits and advances altogether, now touched a record Rs.3.70 lakh crore.
For the last several quarters, Federal Bank, is achieving record profits. What is the secret behind this achievement?
Yes, we are pleased with the outcomes of Q3 on every count. At the end of December 2022, the profit was Rs 804 Cr. The big thing is that the achievement was not confined to one or two areas, but the overall efforts of the bank across the quarters and years have helped us to reach this kind of outcome. We have been registering a growth of 16-18 per cent across all portfolios, such as Retail Loans, Agri loans, corporate loans, Business Banking loans etc. In the areas like credit card and microfinance, where we are a new entrant, the growth is above 40-50 per cent.
What are your focus areas?
Federal Bank is offering all products that are available in a leading Bank now. In addition to traditional products, we could successfully venture into credit cards, personal loans, vehicle loans, commercial vehicle loans and microfinance businesses. We have been disbursing loans of Rs 150 crore per month through micro-financing. Another focus area is wealth management. We are currently managing investments of approximately Rs 3525 Cr under this category.
There is a persisting threat of recession globally. Will it affect credit growth?
Despite the global economic challenges, it is projected that India will improve its growth rate. Even if the economic growth is restricted to 6 per cent, the bank can have a credit growth of 15-18 per cent. According to a report of the last five years, Federal Bank has the best-sustained business growth after the HDFC Bank and IndusInd Bank. The average growth during this period was 15.1 per cent despite demonetisation, GST, two flood seasons and the pandemic.
Federal Bank's growth was on its own during the past years. Is there any possibility of a merger or acquisition?
If you ask whether there is a possibility for a merger, I would say Yes. But we don't have anything before us at present. Each bank has its own culture, technology and regional influence. We can seriously contemplate mergers only if all these factors come together. Likewise, the cost of merger and acquisition is also significant.
The technology-supported neo-banking platforms are growing fast. Is this a challenge?
In the Indian context, banks and neo-banks are here to coexist. Banks need neo-banks to sell their products. Likewise, Neo-banks need the infrastructure of the banks. Neo-banks such as Epifi and Jupiter have already tied up with Federal Bank for savings account services. When we add 10 Lakh customers through our branches in a year, it is 25 lakh customers joining us through neo-banking platforms. Most of these are youngsters who have just started earning. The volume and ticket size of transactions will go up as they grow in their career.
Will you continue opening new branches?
We have planned to open 75 branches this fiscal. Out of which, 55 have already opened. The remaining 20 will be opened shortly. For the next two years, we will continue to add 75-100 branches each year, eventually crossing 1500 branches.
International Financial Corporation (IFC), a member of the World Bank Group has provided capital investment for the Federal Bank. Are you sourcing more such capital funds?
We are planning to source more capital funds this year. We have the necessary approvals from the Director Board. But can’t disclose who is going to invest and how much at this juncture. We are expecting funds of Rs 2500 Cr to Rs 4000 Cr.
Besides banking, what are your personal likings?
I love cricket a lot. I played on the college team. Rahul Dravid is my favourite cricketer and obviously, I am a fan of his consistency in performance.
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