When HS Upendra Kamath took over the reins at Tamilnad Mercantile Bank (TMB) as MD and CEO in July last, his medium-term vision for the bank was 700 branches and top-line of about ₹70,000 crore at the end of his three-year tenure. After 14 months at the helm, Kamath perceives that he is slightly behind the envisioned target. “It would not be that difficult to bridge the gap, although much would depend on the economy too,” he told BusinessLine . Excerpts from an interview:
What has been your achievement so far?
At the end of the first year, we could achieve 430 branches, an addition of 60 during 2014-15 and an increase in business mix of about ₹5,000 crore. I effectively had about eight months in the last fiscal (I joined the bank in July 2014). Normally, it takes a month or two for a person to settle down. This year, we have plans to add another 55-60 branches and take the network to around 500; we are targeting a business mix of ₹55,000 crore (₹30,600 crore in deposits and ₹24,400 crore in advances), which means ₹9,500 crore in absolute growth (₹5,000-crore deposits and ₹4,500-crore advances).
As of today, our growth over March 2015 is roughly around ₹1,400 crore. We should achieve an overall growth of ₹4,000 crore by September to reach a growth trajectory of 40 per cent in the first half and 60 per cent in the second half. I am behind the September estimates by around ₹2,400 crore. If all goes well, I think I should be able to achieve around ₹3,000 crore of growth. But this kind of growth was not seen in the bank in the last few years.
How aggressive are you to catch up with the target?
We are very careful about growth on the advances front. Last fiscal has been a year of careful growth. We managed to bring down the cost of deposits by reducing interest rates, albeit gradually. On the advances front, our focus continues to be priority sector, MSME and retail lending. We have started entering into, in a calibrated manner, the corporate funding space with small-ticket advances. As a matter of policy, we have taken a stance not to take exposure in any company (exceeding ₹50 crore in a best-case scenario). Our average ticket size is about ₹30-40 crore and we do not want to get over-exposed in any space.
What has been your strategy to get into the corporate lending space?
We have set up four large corporate cells in centres, such as Coimbatore, Chennai, Hyderabad and Mumbai.
This is the first step. We will look to convert the cells into full-fledged corporate branches at the appropriate time, because the organisation is in the initial stage of the learning curve as far as credit skills for handling corporate accounts are concerned. We did not want to plunge into this activity by opening full-fledged branches, so we set up corporate cells, manned adequately by chartered and cost accountants, trained officers, etc. Simultaneously, credit skills are being built up.
We have tied up with an external organisation, selected people based on criteria, such as educational qualifications, age, experience, aptitude to learn, communication skills, etc, and subjected them to a two-and-a-half-month training programme, over four phases.
How many have been trained so far?
The first batch of training is over and the second is due to start on September 28. We plan to have five batches (30 per batch) trained, which means about 150 additional well-trained credit cadre. Trained cadres cannot be built overnight. It will take three to four years.
Once three batches of this training are over, we will start training in foreign exchange. The intention is to develop in-house cadre, both in credit and forex. We need talent in treasury and IT too, but have not designed any programme as of now.