Federal Bank’s Srinivasan is BS Banker of the Year

Five-member jury chooses him for consistency of performance

Shyam Srinivasan, managing director and chief executive officer (CEO) of Federal Bank, is the Business Standard Banker of the Year for 2019-20 for his bank’s consistent healthy performance at a time when most of its peers witnessed large stress on asset quality, registered losses, or even invited regulatory actions.

The unanimous decision was taken by a high-profile jury of five, chaired by former Reserve Bank of India deputy governor S S Mundra. Other members were Keki Mistry, vice-chairman and CEO of Housing Development Finance Corporation; Rashesh Shah, chairman and CEO of Edelweiss Group; Pratip Chaudhuri, former State Bank of India chairman; and Anil Singhvi, chairman of Ican Investment Advisors. The jury met via videoconferencing to finalise the winner, a departure from the usual practice because of the pandemic restrictions.

Srinivasan, who has been heading the bank since 2010, and last year got an extension for another year, has been “low profile and did his job quietly”,

SHYAM SRINIVASAN has been heading the bank since 2010. Last year, he got an extension for another year

observed one of the jury members. From the initial rounds of vetting, the bank’s nomination was common in all the jury members' personal picks.

“The consistency of performance is something which made the jury vote in favour of Federal Bank. There had been a couple of other contenders with equally strong data set and decent performance, but the jury noted and recognised that these turnarounds in performances have been of relatively recent origin and of shorter duration, and probably it would be important for the jury to wait and watch the performance for a relatively longer period to establish the consistency," said Mundra, chair of the jury.

The jury judged Srinivasan as the best choice for an impressive, all-round performance of the bank.

The bank had strong ratios, adequate provisioning, and low non-performing assets (NPA) ratio. Although more regioncentric than other banks, Srinivasan has made the bank’s brand recognisable over the years, but did not want to grow aggressively compromising on asset quality or provisioning.

The filters used for the jury table were banks with the asset size of ~50,000 crore and above as of March 2020, and that there should have been growth in profit prior to provision in the past three years. Only 11 banks qualified, which was further filtered down to five.

The jury discussed threadbare the financials of these five banks, and narrowed down to three purely on qualitative aspects. Issues such as leadership, regulatory actions, etc., and style of leadership were discussed.

The jury appreciated Federal Bank’s overall performance year after year, without any undue surprise. The bank’s net NPA was 1.31 per cent as on March 31, 2020. Importantly, it has fallen in the past three years in consideration, whereas many have witnessed fluctuations. The bank is also one of the few which reported net profit in the last three years under review.

Net profit of the bank stood at ~1,543 crore for the year ended March 31, 2020, registering 24 per cent growth year-on-year.