Beanstalk SCMHRD

8/8/2019 Beanstalk SCMHRD

1/10

Yes BankBusinessWorld Transformation Series

TEAM BEANSTALK

Symbiosis Centre for Management &

Human Resource Development

(SCMHRD)

Plot No: 15, Rajiv Gandhi Infotech Park ,MIDC, Hinjewadi, Phase 1 , Pune

Pin Code 411057

25 Feb 2010.


2/10

EXECUTIVE SUMMARY

To build and maintain a world class Human Capital, TPBoI should have a strong Induction,&Mentorship programs.

Knowledge Management along with identification of necessary Job-Specifications/Competencies required can help in maintaining the Organization Culture.

To attract the best talent from various areas, TPBoI should work towards creating anAspirational Brand for prospective employees.

Incentives both monetary &non monetary can help in retaining human capital Steps like Employee Referrals, recruiting from the top educational institutes would ensure

quality human capital inflow.

TPBoI can enter businesses like Mutual Funds(AMC) & Insurance having low penetration bypartnering with foreign partners and also creation of a PE/Venture Fund where high demand f

capital exists.

TPBoI should take advantage of the strong possibility of Government increasing the FDI cap inInsurance to 50% , &enter the Life-Insurance Business with ULIP policies.

Coupled with growth opportunity and low initial capital requirement,MF(AMC) is an attractfield.

TPBoI can leverage its knowledge in various fields of the economy by entering thePE/Venture Capital Business

TheAMC&PE/Venture Funding are expected to make profits from 2014 while Insurance Busineswould be loss makingduring the period.


3/10

A. Building World Class Human Capital:

a) Building and retaining the distinct identity and culture of an organization involves having very we

defined ethos and values which are deeply imbibed in the organizations people. Since TPBoI is

currently a young organization, it is natural that it has a unique personality and identity which its

employees and other stakeholders identify with. However, the rate of growth projected for the bank in

the retail banking business is likely to make retention of this identity a difficult task. The following ste

could be undertaken by the bank to ensure smooth transition during the growth:

Knowledge Management: Have clearly documented policies and procedures which canbe used as a credo by the changing workforce to maintain a standard of work.

Strong Mentorship: Ensure that the organizational structure is able to accommodate thefresh talent that is coming in, while continuing to utilize the experience and learned code

of conduct of the senior employees. This can be done by building many cross-functional

teams, where senior members can act as mentors

Thorough and structured induction: It is very important that the new employees enterithe organization are taught the ropes of the organization from day one itself. Therefore,

carefully planned induction policy is critical.

Clearly defined job specifications and competencies: It is critical that the recruitment idone in such a way that no hired employee fits with TPBoIs culture. Hence, the

competencies both behavioral and technical of the prospective employees must be

clearly defined and detailed.

b) Since TPBoI is a growing organization, the strongest instrument it has to attract, retain as well as

motivate its current and prospective employees is through highlighting its growth prospects. The

following are some suggestions to do the same:

Aspirational Employer Brand: A young and rapidly growing organization like TPBoImust capitalize on its accelerated growth to build a strong brand for itself. TPBoI can

recruit skilled labour from the top educational institutes across the country. Setting up a

knowledge sharing website would help the firm to understand and connect with its

prospective employees. On the whole, this would help in creation an aspirational brand

for prospective employees.


4/10

Non Knowledge Workers: TPBoI has a manpower that mainly consists of knowledgeworkers. It lacks the manpower to reach out. Hence in order for the Allied Business arm

Retail Division to succeed. It needs to recruit and train effective sales teams.

Attractive Incentive policy: An innovative Rewards & Recognition policy needs to be puin place to ensure that current employees are motivated and see due benefits of superior

performance. Since the growth prospects of the organization are so high, it may even ma

sense to offer leadership opportunities as Rewards to excellent performers.

Referrals for Talent Attraction: This can be done best through employee referrals andrecommendations in the marketplace. A strong brand and good recommendations will

also help in attracting better talent for recruitment

Sharing Profits: Since TPBoI is seeing so much success so early in its career, it is importato share this success with those who have made it possible. If early in an organizationslife-cycle, it instils in its employees a strong organizational citizenship, it would make it

easier to retain as well as motivate the employees later.


5/10

C) PROSPECTIVE ALLIED BUSINESSES WHERE TPBoI CAN VENTURE INTO:

In order for TPBoI to be successful in its allied business, it is essential that its Retail Banking is

developed and its reach is increased. We recommend that TPBoI could venture into the following area

of allied businesses:

1) Mutual Funds

2) Life Insurance

3) Private Equity/ Venture Capital

a. BUSINESS SENSE / SYNERGY WITH EXISTING BUSINESS AREAS:

MUTUAL FUNDS

As seen from the above data, the penetration level of the Mutual Funds in India is very lowwhich presents a great scope for development.

The expertise of TPBoI in Wealth Management could be leveraged through knowledge transferand the success story can be repeated in its new AMC.

It should not find any regulatory hurdles as it meets the required criteria. TPBoI can look forpartnering with an international partner with expertise in the Mutual Funds division.

Since it has its own retail banking arm, it can save on its distribution costs and thereby providinbetter alternatives than its competitors.


6/10

LIFE - INSURANCE SECTORLife premium/ GDP (%)

As we can see, low penetration level inboth the Life category provides a huge

opportunity.

With the Retail Banking division beingshored up TPBoI can look for providing

its SME customers with Group

Insurance thereby ensuring that it

provides its customers with end to-end

services along its line-of-thought.

The focus in the initial years should be on ULIP policies due to the synergy of it with the existinWealth Management business.

Raising of capital in a capital intensive Insurance can be achieved by roping in a foreign partnewho are prepared to pay a share premium inorder to have operations in India.

Being a growth company, this would be the right time for the organization to enter the businesFurther delay should be avoided as it already is around the 20

th

player.

PRIVATE EQUITY/ VENTURE CAPITAL:

Notwithstanding the contraction of capital raising in 2008, private equity funds' interest in India is no

waning

New Private Equity Deals Look Different

More private equity firms are investing alongside corporate partners or sovereign wealth funds.

Longer holding periods due to more time spent on improving operational performance of portfolio

companies

Exits will be delayed until the after-effects of the financial crisis subsides.

8.98.32

7.27 7.08

4.143.6 3.51

2.531.78

0.82

0

1

2

3

4

5

6

7

8

910

UK

Japan

South

Korea

France

US

Malasiya

Australia

India

China

Indonesia


7/10

With the number of ventures requiring capital infusion in the country set to increaseexponentially in the next five years, funding of these firms through a PE Fund provides a huge

investment opportunity.

Since TPBoI has already built up its knowledge in emerging sectors like Agriculture, realty, IT,consumer markets and many other areas it would make sense to venture into this area of

business as it gives them a head start in identifying rapidly growing business entities with soun

business model in these sectors.

The funded companies can also gain advantage from TPBoIs knowledge in diversified sectorswhich can help in its operations/decision making.

Since TPBoI being very well capitalized,the initial funds required for starting the business can beasily arranged for.


8/10

b. Top Level Financials of Allied Business(Projected)

1. TPBoI Asset Management Company (In Rs.Millions)

Basis of Projections:

1) Growth in AUM @ 30% in 2012 and 35% thereon.2)

AMC business started with 5 types of schemes(Money Market, Debt, Gilt, Equity& Balanced)initially. As the pool of funds increases, more schemes may be introduced.

2. TPBoI Insurance Company (In Rs.Millions)


1) TPBOI contribution to equity 80% in 2010, 75% 2011 onwards2) Overall Premium growth 25%, 35% & 40% respectively in three years3) Renewal premium considered as 90% of the last year's collections4) Expenses & provisions for change in liability is high during later years due to increase in volum

of business

5) Gestation period expected to be around 6 years6) Capital infusion from foreign partner will be high because shares expected to be issued at a

premium


9/10

3. TPBoI Private equity (In Rs.Millions)


1) High incomes in 2014 is due to profit booking by TPBoI in the form of exiting a business orselling some stake in a funded entity.

Top Level Financials of TPBoI Group

Balance Sheet of TPBoI Group (Projected) (Rs. Millions)

1) CASA to increase from 9% to 25% by year 2012 and is maintained at that level for the next twoyears.

2) Number of branches is expected to grow from current level of 193 to 750 by the year 2015.3) Number of Employees is expected to grow from 2700 to 10,000 by the end of the year 20144) Additional capital Injected for enhancing growth and maintaining CRAR at around 15% will b

$250 million in the first year and around $1 Billion over the next 3 years

5) Targeted 3000 ATMs operated by the year 20156) Assets are set to grow at 38%


10/10

Profit and Loss account of TPBoI Group (Projected) (In Rs. Millions)

Projection basis:

1) The Net Interest Income of the company grows by 50% due to a similar increase in CASA and tgrowth rate would gradually decrease to 40% by the year 2015

2) The other Income of the Bank would grow at an average constant rate of 20% YoY initially as tbank forays into businesses like Insurance, Mutual Funds and Private Equity

3) The operating Expenses of the bank is projected to increase by 40% YoY as it tries to providewide services and puts thrust on retail banking operations

4) The Net profit of the bank is expected to grow at 45% in the year 2010 and is expected to grow around 35-40% annually.

Beanstalk SCMHRD

Documents

Transcript of Beanstalk SCMHRD