Effective April 1, Vijaya Bank and Dena Bank have merged with Bank of Baroda. The MD and CEO of Bank of Baroda, P.B. Jayakumar , shares the medium-term roadmap of the merged entity in an interview.
What are the medium-term vision and targets for the merged entity?
At a broader level, this amalgamation is giving us both depth and breadth. Breadth from the extended distribution network we got — the 9,500 branches.
The second thing is that we now have a deeper team — the number of general managers and so on… So, it is now possible for us to focus on the segments much better than we have done before. Combination of depth and breadth will give us the revenue growth we want to accomplish. The position remains the same that we set for ourselves in BoB, which is continuous CAGR of 15%, return on equity of 15%, a book value of greater than 2 and very high employee and customer satisfaction levels. We will also have more products for customers. Also, our employees will emerge as better managers.
What issues do you want to address in Vijaya Bank and Dena Bank?
With Vijaya Bank, I do not see any overwhelming issues. It is a well-run bank; has shown strong growth; it has been a profitable and a dividend-declaring bank.
So the whole objective is leverage from Vijaya Bank’s strength in terms of its relationship with, particularly markets in the South. They have depth in many areas; they have more school accounts, hospital accounts, temple accounts. So far as Dena is concerned, the positive thing is the NPA issues are well identified, now it is a question of resolution. And the second thing is because they were in PCA we need to revive their credit growth.
What is the loan growth target for the current financial year?
In the last five quarters we have been growing 15-20% in domestic credit. Our guidance continues to remain pretty much there itself.
Will there be any branch rationalisation?
For the first 6-9 months, we are not looking at any branch rationalisation, as we need to get a certain degree of technology integration completed. In the medium term, we do plan to shift some branches because 10% of the branches are close to each other. We do not see reduction in the number of branches; it will be relocating to new locations — micro markets — where we do not have any presence.
Dena and Vijaya banks are on different versions of Finacle; BoB has Finacle 10? How do you address that?
We have to migrate all of them from Finacle 7 to Finacle 10. We need to have a single core banking system across the organisation.
The other part of the technology plan is the delivery platform — the customer experience. There will be more consistency in customer delivery than earlier.
So on the technology front, we are doing two things; one, to migrate to a single system and two, having consistent delivery by adopting best-in-class processes that exist among the three banks.
Over 12-18 months we will move to core banking system as a one single platform.
