Industry Awareness - Banking

Viral ThakkerViral ThakkerEx-Executive Director, J.P.Morganviral.thakker@gmail.com+91 98337 10004

The views expressed & content presented is based on my personal experiences & understanding. Did I state the obvious ?!

Disclaimer & Ownership

The content of this presentation is prepared on the basis ofunderstanding of and as per information with the author. Theauthor does not make any claim on the authenticity or theveracity of the data and the material is prepared purely toserve as reference for a discussion on a education and/or atraining session.training session.

The content is the property of the author and should not becopied, distributed, transmitted, uploaded or used in any othermanner for any commercial purposes without prior consent ofthe author.

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Agenda

• Overview – MNC Banks• Lines of Business• Organization Constitution

Overview

• Banking Sector in IndiaIndia • Banking Sector in India• Upcoming Banks• Entry Level Roles

India Scenario

• What to expect• And What not to expect Day One

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Enlightenment

� Best B-School to become a best selling author?

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• Overview – MNC Banks• Overview – MNC Banks• Lines of Business• Organization Constitution

Overview

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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

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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.

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“It is an institution that accepts deposits,and advances loans to those who need it, inthe process helping people earn on theirdeposit, and helping economy grow bycredit creation”

Bank – FunctionsPrimary Function Secondary Function –

AgencySecondary Function -Utility

Accept Deposits Cheque Clearance Locker facility

Make Advances Trade in Bonds/Stock Traveller’s cheques

Credit Creation Money Transfers Bill Payments

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Credit Creation Money Transfers Bill Payments

Trustee, Correspondent & Executor

Merchant Banking

FX Dealings Credit & Debit cards

Tax Deposits

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

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Overview - Constitution

� Branch Office

� Representative office

� Outsourcing Centres

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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)

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Quiz

� Largest Bank in the world?

� Largest Bank in India?

Appendix

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Overview

� Lines of Business [LOBs]� Retail banking

� Cards

� Wholesale Banking

� Wealth Management / Private Banking� Wealth Management / Private Banking

� Typical LOB structure

� Other functions

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Lines of Business

� Retail Banking� Liabilities: Savings, Current, Time Deposits

� Assets: Personal, Home, Car, Loan Against Properties

� Insurance & Investments: Broking/Advisory Function

Cards� Cards� Credit cards & Debit cards

� Travel cards

� Expense cards

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Lines of Business

� Wholesale Banking� Corporate Banking / SME Banking

� Investment Banking

� M&A

� Debt & Equity Capital� Debt & Equity Capital

� Global Markets – Credit & Rates

� Transaction Banking – Cash / Trade

� Custodial Services

� Private Banking� Ultra HNI’s – support all needs incl. investments, deposits & loans

Universal Bank15

LOB Hierarchy

� Typical LOB structure� Product & Sales / sales advisory

� Product Risk

� Compliance

� Business Finance, LOB CFO� Business Finance, LOB CFO

� Marketing, IT

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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

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• Banking Sector in IndiaIndia • Banking Sector in India• Upcoming Banks• Entry Level Roles

India Scenario

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Banking Sector - India

� Reserve Bank of India- regulator� Regulates Banking

� Regulates Non Banking Finance Companies incl.:

� Housing, Gold & Transport Loan Companies

� Factors & Micro Finance Companies� Factors & 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

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Banking Sector –Type of Banks

� Commercial� Private Banks

� Public Sector Banks

� Foreign Banks

� Regional Rural Banks� Regional Rural Banks

� Co-operatives� Urban Co-operatives

� State Co-operatives

� All India Financial Institutions� NABARD, SIDBI, EXIM, NPCI

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Upcoming Banks in India

� New Bank Licenses� IDFC

� Bandhan Microfin

� Differentiated Banks [eg: Payment Banks?]

Fastest Growing Banks� Fastest Growing Banks� IndusInd, Yes, Axis, Kotak

� Foreign Bank Licenses� 12 – 15 licenses each year

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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 Support� Back Office – Operations Support

� Public Sector Banks� Clerical jobs

� Written test & interview

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Corporate LadderMNC 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

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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

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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

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Non Banking Financial Roles

� PEs / VCs

� Mutual Funds

� Insurance

� Non Banking Finance Companies� Non Banking Finance Companies

� Broking: equities/debt/fx/commodities

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Agenda

Day • What to expect• What not to expect

Day One

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Top 10 things – before you leap

� Formal Dressing

� Performance

� Ocean of Learning

� Good Pay� Good Pay

� Good Career

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Top 10 things – before you leap

� Long hours/ hard work

� Politics – pulls & pressure

� Honesty & Integrity

� Customer @ Centre of Everything� Customer @ Centre of Everything

� Training & Support

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Day one - what not to expect

� Your favorite role

� Quick career mobility / changes

� Smartest Manager

� To be a Manager� To be a Manager

� Office Romance!

� Great Canteen Food!

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Bankable Authors

� Chetan Bhagat� 5.someone and the rest is history

� Amish Tripathi� 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!

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Appendix – Foreign Banks

# Bank name Total assets ($ bn) # Bank Name Mkt cap ($ bn)

1 Industrial & Commercial Bank of China (ICBC) 3,181.88

1 Wells 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

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# Bank name Total 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

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Viral ThakkerViral has 13 years of experience across financial services and Bankingwith a keen understanding of retail and wholesale banking, capitalmarkets, trade finance and cash management. His last role was asExecutive Director with J.P.Morgan having spent half of thecareer here selling structured and classical trade finance and cashmanagement services to Fortune 500 companies and largest of theIndian corporates. His work has won him recognition and accoladesfor his deals - both in-house and external. Prior to joining J.P.Morganhe has worked with HBSC and ICICI Bank in relationshipmanagement as well as audit and advisory services roles.

He has experience working in complex / matrix org structures, navigating through multiplestakeholders and working with people from diverse cultural and geographical background. Hiswork has also seen him travel extensively both within and out of India, something that he relishesas also allows him to extensively network with people from different backgrounds.

He is a Chartered Accountant and also holds a Masters of Commerce qualification fromUniversity of Mumbai, however his best lessons have been learnt at the University called Life.When not reading about businesses and global personalities, he likes to undertake trekking &biking excursions, blog about life experiences and pen hotel reviews. He ranked amongst top 1%of most read TripAdvisor reviewers globally for the year 2012 as also has been amongst the 2%most popular reviewers from Mumbai for three months in a row.

� viral.thakker@gmail.com | +91 98337 10004 | Linked In: in.linkedin.com/in/thakkerviral/

� Blog; www.thoughtfool-viral.blogspot.com | Twitter: @vttwitty

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