Ashok Vaswani's brief: Igniting animal spirits at Kotak Mahindra Bank
Kotak Mahindra Bank, may have proved his mettle on the global stage building retail businesses, but when it comes to his new role, market watchers will closely scrutinise his strategy for sustaining profitability margins while accelerating growth.
Vaswani's challenges as the CEO of the country's fourth largest bank with a market value of ₹3.51 lakh crore would include ensuring management stability, building scale in commercial banking, maintaining margins while growing the balance sheet, and preserving a culture built on conservatism rather than aggressive growth, industry watchers said.
Kotak Mahindra Bank's existing margins are the highest in the sector at 5.2%.
«The market would like to see the new CEO further accelerate growth, increase market share, grow balance sheet and maintain profitability,» said Suresh Ganapathy, head of financial services research at Macquarie.
«The market would want a little bit more acceleration on the retail deposit. Over the last 12 months, incrementally 50% of the CASA and term deposits have come above ₹5 crore.
This number is much lower for others. He (Vaswani) would want more retail deposits to flow through, compared to what it has been in the past,» Ganapathy said.
One of the key challenges lies in maintaining management stability.
The initial market expectations about the new CEO's performance were centred around an internal contender for the role, but with an outsider chosen for the top job, he will have to ensure a seamless transition and consistency in the bank's execution to avoid any gaps, analysts said.
Apart from growing the book, the new CEO also faces the challenge of retaining talent.
