P Jayendra Nayak, chairman and managing director of the UTI Bank, has been chosen Business Standard's Banker of the Year award for 2004-05. He was selected on the basis of UTI Bank's track record under his stewardship and a poll of senior Business Standard editors.
Nayak has used the cutting edge of technology and his people skills to catapult a small new private bank into the big league. Today it is the biggest player in the loan syndication market and has the third largest ATM network among all banks in India. About 95 per cent of its retail cash transactions are carried through its 1,565 ATMs across the country.
Business Standard's Banking Annual, released with today's edition, takes a close look at the success story of the UTI Bank. Nayak took over as the CMD on January 1, 2000. Over the last five years, the UTI Bank has shown a phenomenal growth in every aspect of business.
For instance, its asset base has grown from Rs 6,669 crore (Rs 66.69 billion) in March 2000 to Rs 46,000 crore (Rs 460 billion) in March 2005. Similarly, its loan book has grown from Rs 3,500 crore (Rs 35 billion) to Rs 15,600 crore (Rs 156 billion) and net profit from Rs 51 crore (Rs 510 million) to Rs 225 crore (Rs 2.25 billion) during the period.
Judging from the qualitative parameters, it is head and shoulders above competition. Its average return on equity over the last five years is 28.54 per cent, much above its peers in the private sector.
Similarly, the five-year compounded average growth rate of UTI Bank's net worth is 58.66 per cent, interest income 44.28 per cent and fee income 49.18 per cent - again, much higher than other banks.
The five-year CAGR of UTI Bank's net profit is 45.72 per cent; assets 41.44 per cent; advances 34.79 per cent; investment 46.46 per cent; total deposits 40.85 per cent and demand deposits 65.44 per cent - spectacular by any yardstick.
The Banking Annual also covers a round table discussion with the chief executives of 10 leading banks on whether there is a retail banking bubble.
The findings of the round table are an eye opener. Even though there is no bubble, most of the bankers admit that there are concerns like asset-liability mismatches and growing non-performing assets in certain segments of retail loans.
