Industry Awareness - Banking

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The presentation provides overview of the Banking sector targetting to a fresh batch of MBA (Finance) students. It gives an understanding of - foreign banks, their presence and how they are constituted in India - Types of LOBs - a typical LOB structure - Banking sector in India - Entry Level roles in India, and career selection - Top 10 things to expect on day 1 and five things not to expect on day 1

Transcript of Industry Awareness - Banking

  • 1. Industry Awareness - Banking ViralThakkerViralThakker Ex-Executive Director, J.P.Morgan [email protected] +91 98337 10004 The views expressed & content presented is based on my personal experiences & understanding. Did I state the obvious ?!

2. Disclaimer & Ownership The content of this presentation is prepared on the basis of understanding of and as per information with the author. The author does not make any claim on the authenticity or the veracity of the data and the material is prepared purely to serve as reference for a discussion on a education and/or a training session. The content is the property of the author and should not be copied, distributed, transmitted, uploaded or used in any other manner for any commercial purposes without prior consent of the author. 2 3. Agenda Overview MNC Banks Lines of Business Organization Constitution Overview Banking Sector in India India Banking Sector in India Upcoming Banks Entry Level Roles India Scenario What to expect And What not to expectDay One 3 4. Enlightenment Best B-School to become a best selling author? 4 5. Overview MNC Banks Overview MNC Banks Lines of Business Organization Constitution Overview 5 6. Bank- what is it? Google Definition: noun the land alongside or sloping down to a river or lake. a slope, mass, or mound of a particular substance. a set or series of similar things, especially electrical or electronic devices, grouped together in rows.electronic devices, grouped together in rows. the cushion of a pool table. verb heap (a substance) into a mass or mound. (of an aircraft or vehicle) tilt or cause to tilt sideways in making a turn. (in pool and other games) play (a ball) so that it rebounds off a surface such as a backboard or cushion 6 7. Google Definition 2 [sequel]: Noun: a financial establishment that invests money deposited by customers, pays it out when required, makes loans at interest, and exchanges currency. : deposit (money or valuables) in a bank. Bank- what is it? Verb: deposit (money or valuables) in a bank. 7 It is an institution that accepts deposits, and advances loans to those who need it, in the process helping people earn on their deposit, and helping economy grow by credit creation 8. Bank Functions Primary Function Secondary Function Agency Secondary Function - Utility Accept Deposits Cheque Clearance Locker facility Make Advances Trade in Bonds/Stock Travellers cheques Credit Creation MoneyTransfers Bill Payments 8 Credit Creation MoneyTransfers Bill Payments Trustee, Correspondent & Executor Merchant Banking FX Dealings Credit & Debit cards Tax Deposits 9. Overview MNC Banks India has MNC banks of their own! Foreign Banks in India Citi, BankAm, JPM, Deutsche, HSBC, StanChart Barclays, Credit Agricole, BNP, SocGenBarclays, Credit Agricole, BNP, SocGen Mizuho, BTMU, Sumitomo,Woori, DBS, ICBC Foreign Bank with max branches Link 9 10. Overview - Constitution Branch Office Representative office Outsourcing Centres 10 11. MNC Bank India Presence 327 foreign bank branches in India 43 foreign banks operating in India 46 foreign bank Rep office in India 101 largest branch network (StanChart)101 largest branch network (StanChart) 1- foreign bank listed in India (as of Sept 30, 2013) 11 12. Quiz Largest Bank in the world? Largest Bank in India? Appendix 12 13. Overview Lines of Business [LOBs] Retail banking Cards Wholesale Banking Wealth Management / Private BankingWealth Management / Private Banking Typical LOB structure Other functions 13 14. Lines of Business Retail Banking Liabilities: Savings, Current,Time Deposits Assets: Personal, Home, Car, Loan Against Properties Insurance & Investments: Broking/Advisory Function CardsCards Credit cards & Debit cards Travel cards Expense cards 14 15. Lines of Business Wholesale Banking Corporate Banking / SME Banking Investment Banking M&A Debt & Equity CapitalDebt & Equity Capital Global Markets Credit & Rates Transaction Banking Cash / Trade Custodial Services Private Banking Ultra HNIs support all needs incl. investments, deposits & loans Universal Bank 15 16. LOB Hierarchy Typical LOB structure Product & Sales / sales advisory Product Risk Compliance Business Finance, LOB CFOBusiness Finance, LOB CFO Marketing, IT 16 17. Other Support Functions Key functions: Credit Risk Management, Onboarding Support team Group / Corporate Support Functions:Group / Corporate Support Functions: HR, Compliance,Tax, Legal, Finance, IT, Internal Audit Operations team to support each LOB 17 18. Banking Sector in IndiaIndia Banking Sector in India Upcoming Banks Entry Level Roles India Scenario 18 19. Banking Sector - India Reserve Bank of India- regulator Regulates Banking Regulates Non Banking Finance Companies incl.: Housing, Gold & Transport Loan Companies Factors & Micro Finance CompaniesFactors & Micro Finance Companies Controls Monetary & Conduit for Govt.s Fiscal Policy Issues Bank Notes Controls Payment & Clearing System Foreign Exchange Management Banker to Government & Banker to Banks 19 20. Banking Sector Type of Banks Commercial Private Banks Public Sector Banks Foreign Banks Regional Rural BanksRegional Rural Banks Co-operatives Urban Co-operatives State Co-operatives All India Financial Institutions NABARD, SIDBI, EXIM, NPCI 20 21. Upcoming Banks in India New Bank Licenses IDFC Bandhan Microfin Differentiated Banks [eg: Payment Banks?] Fastest Growing BanksFastest Growing Banks IndusInd,Yes, Axis, Kotak Foreign Bank Licenses 12 15 licenses each year 21 22. Entry Level Roles Foreign Banks / Private Banks Analyst [support sales/ product/strategy/MIS] Research [Credit/Debt/Equity/Markets] Retail liability / Retail Loan sales Back Office Operations SupportBack Office Operations Support Public Sector Banks Clerical jobs Written test & interview 22 23. Corporate Ladder MNC Bank 2 Managing Director Executive Director Vice President Associate Analyst MNC Bank 1 Managing Director Ex. Vice President Sr. Vice President Vice President Asst.Vice President Analyst Private Bank Managing Director Executive Director Sr. Gen Mgr General Manager Jt. General Manager Dpy. Gen. Manager Analyst Officer Dpy. Gen. Manager Asst. Gen. Manager Chief Manager II Chief Manager I Manager II Manager I Asst. Manager II Asst. Manager 1 Associate Officer 15 7 5 23 24. Campus Placements Open truth: Banks classify B-Schools MNCs and Private Bank may classify B- Schools differently Entry level roles segregated basis B-Entry level roles segregated basis B- School Classification Top B School grads may be picked for Markets or Investment Banking Private Banks may offer similar roles to even mid level B-Schools 24 25. Entry Level Roles- Trade Off The Trade Off for Employee: Brand name OR Role An analyst/support role in a MNC or a Sales role at a private bank?private bank? The Trade Off for Employer: Aspiration & Talent v/s Retention A smart but ambitious person may not last long in an Operational or research role even if he fits the bill 25 26. Non Banking Financial Roles PEs /VCs Mutual Funds Insurance Non Banking Finance CompaniesNon Banking Finance Companies Broking: equities/debt/fx/commodities 26 27. Agenda Day What to expect What not to expect Day One 27 28. Top 10 things before you leap Formal Dressing Performance Ocean of Learning Good PayGood Pay Good Career 28 29. Top 10 things before you leap Long hours/ hard work Politics pulls & pressure Honesty & Integrity Customer @ Centre of EverythingCustomer @ Centre of Everything Training & Support 29 30. Day one - what not to expect Your favorite role Quick career mobility / changes Smartest Manager To be a ManagerTo be a Manager Office Romance! Great Canteen Food! 30 31. Bankable Authors Chetan Bhagat 5.someone and the rest is history AmishTripathi The Immortal of Meluha and the rest is historyThe Immortal of Meluha and the rest is history Ravi Subramanian If God were a Banker and the rest is history All of them went to one of the IIMs! And two of them were borne in 1974! Go Challenge them! 31 32. Appendix Foreign Banks # Bank nameTotal assets ($ bn) # Bank Name Mkt cap ($ bn) 1 Industrial & Commercial Bank of China (ICBC) 3,181.88 1Wells Fargo & Co 261.72 2 HSBC Holdings 2,758.45 2 JP Morgan Chase & Co 229.90 3 China Construction Bank Corporation 2,602.54 3 ICBC 196.21 4 BNP Paribas 2,589.19 4 HSBC Holdings 191.43 5 Mitsubishi UFJ Financial Group 2,508.84 5 Bank of America 181.77 6 JPMorgan Chase & Co 2,476.99 6 China Construction Bank 160.83 32 33. # Bank nameTotal assets ($ bn) # Bank Name Mkt cap ($ bn) 1 State Bank of India - $350bn 1 ICICI Bank - $32.9 2 ICICI Bank - $99bn 2 State Bank of India - $30.3 3 Punjab National Bank - $90bn 3 HDFC Bank - $28.7 Appendix Indian Banks 4 Bank of Baroda - $ 73bn 4 Axis Bank - $15.3 5 HDFC Bank - $66.7bn 5 Kotak Mahindra Bank - $11.9 6 Bank of Baroda - $6.4 33 34. Viral Thakker Viral has 13 years of experience across financial services and Banking with a keen understanding of retail and wholesale banking, capital markets, trade finance and cash management. His last role was as Executive Director with J.P.Morgan having spent half of the career here selling structured and classical trade finance and cash management services to Fortune 500 companies and largest of the Indian corporates. His work has won him recognition and accolades for his deals - both in-house and external. Prior to joining J.P.Morgan he has worked with HBSC and ICICI Bank in relationship management as well as audit and advisory services roles. He has experience working in complex / matrix org structures, navigating through multiple stakeholders and working with people from diverse cultural and geographical background. His work has also seen