Posted in Community :
Organic Vs Inorganic Growth
|
||
|
Source : http://www.ndtvprofit.com
Activity:
1 comments
466 views
last activity : 07 06 2010 20:18:04 +0000
|
||
|
|
Inorganic growth strategies have played a significant role in the Banking industry over recent years. While acquisitions and licensing look set to continue to drive growth in the future, increasing competition for the best deal and best partner will require companies to review a broader set of potential targets and search for earlier stage licensing opportunities.
Large scale "mega-mergers" can be in future help to shape the competitive landscape in this field, but analysis suggests that they may not have delivered the expected returns. But this interview with Yogesh Agarwal, CMD, IDBI, gives some positive signs for Inorganic growth. The Industrial Development Bank of India (IDBI) is in a major revamp mode looking to grow through an inorganic route. The bank is comfortably placed with capital adequacy ratio of 14 per cent, as said by Yogesh but he can go for it since there is enough headroom for that.
As yogesh puts this, It has been a very exciting fiscal for IDBI and we were able to register substantially good business growth. Simultaneously, along with the business platform we have restructured our business focus to around six verticals. Now each vertical is focused on a particular customer segment with three on the corporate side and three on the retail side. I feel that the pain we’ve gone through in the last year should start paying off in terms of profitability and business growth in the current year.
Quite clearly the finance minister has been saying that he would prefer mergers to take place within the public sector banking. But the movement has not taken place because finance minister favours voluntary mergers. The government has been nudging the public sector banks to go in for merger but the nudging has been gentle so it needs to be more overt for mergers to take place.
At the moment IDBI is very comfortably placed in terms of capital requirement with a capital adequacy ratio (CAR) of nearly 14 per cent but it doesn’t make good business sense. In the years to come definitely they need large amount of capital and are already in talks with government of India whereby they are discussing various options. The government has clearly demonstrated that it will not come in the way of capital requirement of the bank.
I f we go by the current scenario then we can say that the bank is doing well, But as their is an increase volatility in the market. Predictions may go wrong but yes Inorganic growth is always the best shortcut to grow.
Large scale "mega-mergers" can be in future help to shape the competitive landscape in this field, but analysis suggests that they may not have delivered the expected returns. But this interview with Yogesh Agarwal, CMD, IDBI, gives some positive signs for Inorganic growth. The Industrial Development Bank of India (IDBI) is in a major revamp mode looking to grow through an inorganic route. The bank is comfortably placed with capital adequacy ratio of 14 per cent, as said by Yogesh but he can go for it since there is enough headroom for that.
As yogesh puts this, It has been a very exciting fiscal for IDBI and we were able to register substantially good business growth. Simultaneously, along with the business platform we have restructured our business focus to around six verticals. Now each vertical is focused on a particular customer segment with three on the corporate side and three on the retail side. I feel that the pain we’ve gone through in the last year should start paying off in terms of profitability and business growth in the current year.
Quite clearly the finance minister has been saying that he would prefer mergers to take place within the public sector banking. But the movement has not taken place because finance minister favours voluntary mergers. The government has been nudging the public sector banks to go in for merger but the nudging has been gentle so it needs to be more overt for mergers to take place.
At the moment IDBI is very comfortably placed in terms of capital requirement with a capital adequacy ratio (CAR) of nearly 14 per cent but it doesn’t make good business sense. In the years to come definitely they need large amount of capital and are already in talks with government of India whereby they are discussing various options. The government has clearly demonstrated that it will not come in the way of capital requirement of the bank.
I f we go by the current scenario then we can say that the bank is doing well, But as their is an increase volatility in the market. Predictions may go wrong but yes Inorganic growth is always the best shortcut to grow.
TrackBack URL:
1 comments on "IDBI in revamp mode; looking at inorganic growth"
Sort by:
Most Recent
Top Rated
Commented by
varsha ., Technical manger(QMS)
| 11 21 2008 15:24:37 +0000
Report Abuse
Not Rated
Found the article
"IDBI in revamp mode; looking at inorganic growth"
interesting ?
Share with your connections and communities
Leading Recruitment firm
- Create a confidential Career Profile and Resume/C.V. online
- Get advice for planning their career and for marketing of experience and skills
- Maximize awareness of and access to the best career opportunities
Viewers also viewed
|
|
|
227 referals
12 votes,
421 views
|
|
|
In a recent study, it said that attractive women faced discrimination when they applied for jobs... |
|
|
646 referals
71 arguments,
2163 views
|
|
|
Rebranding of Airtel |
|
|
17 referals
3 arguments,
155 views
|
|
|
|
|
|
|
Recent Knowledge (92)
|
|
Accounting of revenues costs in Entertainment Ind. 13 May 2010 2,927 views No Comment A common... |
|
|
0 referals
1 comments,
286 views
|
|
|
Excerpt from the Book “Unposted Letter” by T. T. Rangarajan ’10 minutes early’ means I can live... |
|
|
2078 referals
27 comments,
377 views
|
|
|
Cadbury India Ltd. Brand “Cadbury Dairymilk” has already been taken strong position in Indian... |
|
|
0 referals
0 comments,
0 views
|
|
|
|
|
|
|
Sponsored Jobs
More From Author
Hi.....guys i have been seeing many debates and Idea contests in the Automobile sector regarding only cars...and as a bike lover i would like to pose a question to you all... The thing is Bajaj Auto is saying the Future lies ahead in 100cc bikes,... |
This topic will have mixed answers as some will say it as a gift and some will say it as a curb, because scientific implementation and technology has given results and its a proven fact, but at the same time too much of it is causing more problems... |
I feel HR PRO is also a good option. It is a comprehensive Human Resource Management System Software that brings greater organization and effectiveness to the full range of Human Resource functions and responsibilities. HR PRO also provides for easy,... |