Hits the ground running

Brand Equity of the Bank stock-taking in 1999-2000

Did Share Price reflect the Brand Equity?

How one translated Brand Equity into Share Value

2

1993 Reserve Bank of India ( RBI the Central Bank of India) opened the banking sector to allow Private Banks to operate in India once again

Private Banks those dominated the market till 2000

ICICI Bank HDFC Bank

Global Trust Bank

BANK OF PUNJAB (BoP) TRAILED

3

Set up in 1995 Successful Public Issue held under the stewardship of Sardar Dr. Inderjit Singh , ex-Chairman of Punjab & Sindh Bank Strong base in the Northern Indian Market , primarily in the state of Punjab Share value quoted between Rs.13 and17 (Apr-June 2000)

Growth of Deposits during 1998 99

@ 52% [up from Rs.170 million to Rs. 260 million ]

Total Business during the period

@ Rs.393.2 million [ up from Rs.260.8 million]

Industry surveys indicated

Ranked No.11 amongst Indias Private Sector Banks Ranked No.22 amongst Indias Best Banks [ Private & Public

Banks]
Ranked No.36 amongst all Banks in India [Including International

/ MNC Banks]
5

To be a financial supermarket (thought of it in 2000) To have a significant presence in the country by

2005 with primary emphasis on retail banking

An exponential increase in its customer base :

- One million customers in two years, up from the four hundred

thousands present in early 2000.

- 15 additional branches in fiscal 2000 - 01. - Calcutta and Chennai branches ( Metro City Branches) to be

operational by early 2001.

- install 100 ATMs with a focus on off-site installations by the end

of financial year of 2000 - 01.

A 24-hour customer care centre for tele-banking in place to manage customer queries and information services.
7

Network of 55 branches
Internet banking scheduled to go online in 2000 - 01 off - site ATMs and Debit cards on the anvil Interconnected call-centres planned at Delhi, Chandigarh and Mumbai

Recently joined MasterCard Global ATM Network

The problem could be in the following key areas:

Perceptions about the bank Services compared to competition Inadequate communications initiatives Positioning of the Bank

A Quick survey reveals interesting insights :

Bank of Punjab lacked a definite identity Most often confused with an Indian nationalized bank (Punjab National Bank)

Did not have the image of being a modern or technologically savvy Bank
10

Perceived as a regional bank Perceived as a predominantly agrarian bank [perhaps due to the association with the state of Punjab]

Lack of awareness on the BoPs capabilities Credibility lower than the other peer banks

11

Courteous and polite Branch ambience rich but traditional Environment not young

Executives lack the conversion drive or laid-back in their

attitudes

Some degree of lack of awareness amongst existing

customers about the range of services
12

ICICI Bank @ that point of time :

Modern and technologically ahead Proactive & prompt

The Generation Y of Banks

Good network of branches and easily accessible At par with international / MNC banks

13

HDFC Bank @ that point of time :

Friendly and reliable bank Leader in deploying technology in its services

A leader in the personal loans products

Relatively large , especially by the virtue of buying out Times Bank ( a Private Indian Bank promoted by a well-known

Indian media house)

14

@ that point of time :

While the Public Sector Banks needed time to adapt their wide and far flung branch-based database to operate through

the net technology , both ICICI & HDFC Banks, who did not
have this baggage, surged ahead

Their initiatives in technology-led strategy gave them the image of leaders . All others were me-too

15

HDFC Bank had created a brand equity that reflected trust and integrity

HDFC Bank in assistance / legacy with its promoter Company ( HDFC = Housing Development Finance Corporation Ltd) had set up a center for housing finance to assist the government

& other institutions

16

ICICI Bank was planning to set up net-Kiosks for its customers [ web active customer base 100 thousand ]

ICICI Bank was targeting the kids-market through parents

opening accounts for them on the net

ICICI Bank was in the process of setting up 20 city specific portals [e.g.: www.cafemumbai.com]
17

Both banks were setting up shopping portals where customers of the Banks could buy using their bank a/c number

Both were positioning themselves as much more than just banks . They were already perceived as comprehensive financial supermarkets. They were focused at creating virtual market places on the net
18

Global Trust Bank (GTB) @ that point of time :

ABACUS [Any Branch any customer] My Time ATMs

2424 Phone Banking

ibank@gtb GTB also tied-up with MindTree Consulting Solutions ( knowledge enabled software
services company)

MOUs with Indiainfo.com and Sharekhan.com

space)

( various service providers in Financial Services 19

The leading Banks were already positioned as financial supermarkets, with a personality that was young, aggressive and creative

While Bank of Punjab worked to position itself as a financial supermarket , the leaders could get repositioned as premium Wal-Mart in retail banking space in India

The differentiators would be the-ability-to-add-value , the

global image, and the personality
20

Over 70% of Banks (Public Sector Undertakings included PSU Banks) would be computerized within the year in India

All were aggressively looking at Information Technology paddled services

Most resurrected PSU Banks would have larger networks and penetration

Bank of Punjab would be one amongst many of Indian Banks

21

Moving ahead ... but so are many other banks

BoP did not have a strong enough identity The identity, in fact, seemed to have some negatives

22

To be seen as dynamic
To be seen as innovative To be seen as vibrant

Outrun the others

Product / IT Service difference

Be the Hero in customer service

23

Share prices need not be a reflection of present health

Most often share prices reflect the affirmation in the companys future

24

Bank of Baroda (PSU)

HDFC

Profits

Rs.95 million

Rs.12.5 million

HDFC Bank valued @ Rs.480 million

BOB valued @ Rs.150 million

* These figures are nearest approximation for illustrative purpose
25

Share valuation

is a matter of perception
it is valuation of the brand

26

Valuation of a bank is a function of:

Operational viability Present activity Growth expectations, visibility and credibility Vision for the future

27

Market Valuers could look at a few key issues:

Is there a track record Is it technologically viable Any acquisitions or products on the cards How will it sustain profits

28

Discerning investors would also look at:

Capital base Staff & training Culture Level of technology Composition of the Board of Directors
29

 A Scientific Process Reflection of aspiration

30

A strong brand has:

An identity An identity that is positive An on-going excitement about it that generates

expectations

Memorability
31

Core Product

Packaging

Image Association

B R A N D

Delivery Of Promises

Strong Brand Personality & Credibility STRONG VALUATION

32

Our belief

strategy and discipline will build the brand and the share value

The key question:

Can This Be Achieved?

33

At a crossroad

Need to tackle issues like:

Perception of the Bank Image of the Bank

34

Association with Punjab too restrictive Credibility low No innovations perceived Awareness on the bank pan-India very low No USP

35

Essential to have a national image Need to promote an image of the promoters as visionaries or Thought Leaders

Project the bank as customer oriented and warm

Project the Bank as technologically advanced and efficient Project the Bank as accessible everywhere

36

Bridge the gaps in the banks services and positioning , both in real terms and at the perception level

Create products and services that unify BoPs image across the country

PR exercise to build up BoPs visibility , credibility and position it as a bank to watch out for

Conduct conferences targeted at Investors and Corporates to

raise the visibility with the Investors
37

Create visible activity amongst the retail segment in the 4 regions / 5 Metros and generate a unifying energy

Ensure that the core products at par with the best within 6

months

Become aggressively consumer friendly Innovate relationships with the consumer [even beyond the banking need ]

Adopt a conscious image make-over route

38

The Bank must ensure up-gradation of its banking facility on the net : it was a MUST

The Bank to put in place a product that unifies the bank nationally [e.g. easily accessed ATMs or Credit Cards]

Initiate conferences in Mumbai, the financial hub of India, to build on customer satisfaction and technology

39

Knowledge/convenience/Banking cafes Journey to leadership contest / seminars Logo & identity programme Banking portal

Launch of credit card School and college debates & projects on finance issues : creating financial literacy among school ( in higher classes, VIZ Standard VIII,IX,X) going children and college going youth ( First Year ) Get to know relationship meetings with key-media
40

Build relationships with media

Initial months the focus on: Familiarizing them and Creating Credibility

41

OBJECTIVE: Create awareness about the bank amongst mainline papers and business dailies Get BoP to close to the top of mind with the Press Feed information to the press on BoPs products, new services etc Initiate meetings with the bank s senior management for familiarization on selective basis Make presence felt in Mumbai on customer satisfaction and technology
42

OBJECTIVE: Creating awareness about the product by having Contest Journey to Leadership which will run nationally for 3 months BoPs Financial Results to be Advertised as well as Press announcements in all the mainline and financial dailies Create excitement amongst the customers through demonstration of new products & services and launch of Banking & Personal Finance Portals

43

OBJECTIVE: Launch the Credits Cards all over the Country within the period. This would be leveraged in the national press Create credibility with press conferences and also having one-on-one interviews with the board members Position the Bank as customer focused Target the schools and colleges in a strategic manner Initiate inter-school debates on personal finances [sponsored by the Bank] Sponsor projects on Technology Breakthroughs

These were the initial years of opening up of the Indian Banking sector with Credit Cards, Net Banking, ATM services, Connectivity in Branch Banking etc.
44

A name change has not been recommended in the plan only so as to keep it name insensitive ( We have examples of Bank of Baroda, Bank of Maharashtra, Punjab National Bank all PSU banks though)
However, it was recommended that some detailed research carried out on the advantages and disadvantages of continuing with a name that was restrictive and has associations of agriculture and regionalism
45

46

What was BoP

Branded as a small regional bank A desirable acquisition for the biggies Perceived as an old economy bank Low awareness level of various products Lack of customer-service focus
47

PR Task
Position BOP as new private sector technology savvy bank

with national presence, customer-focus and innovative products

PR Strategy
Strategic Communications
Consistent & systematic flow of messages

48

THE SAMPLE MEDIA COVERAGE

I have only provided one simple collage of a few media clips to provide the flavour of the media report being in sync with the strategy. Interested readers can search the world-wide-web of relevant period and can look at various media reports from other print, wire and visual media. Unnecessary media clips would have made the file too heavy to load anyways. And to find examples to support strategy reference, one can always do Google Search for media reports.

49

50

BoP regularly featured in leading financial media Perceived as a bank with a national presence and huge growth potential

New private sector bank with a strong foundation still a

probable takeover target though

A technology savvy & client driven bank offering latest products & services

51

'Centurion

Bank

of

Punjab'-

M&A

road

for

consolidation

The price of BANK OF PUNJAB stocks steadily increased over next 4 years from 2000 till 2004, nearly 30 banks were in Private Sector Banking space in India at that time

The top five controlled nearly 65% of the assets. Most of these private

sector banks were profitable and had adequate capital as well as

technology edge

In 2005 BANK OF PUNJAB (BoP) and CENTURION BANK (CB) were merged to

form Centurion Bank of Punjab (CBoP)

52

The Reserve Bank of India, the Indian Central Bank, approved the CBoP merger effective 1 October, 2005. The merger was at a swap ratio 9:4 and the combined bank was called Centurion Bank of Punjab CBoP had a presence of 240 branches and extension counters, 386 ATMs, about 2.2 million customers. As on March 2005, the net worth of the combined entity was Rs. 69.6 million and at a capital adequacy ratio of 16.1%

http://www.business-standard.com/india/news/94-swap-ratio-forbankpunjab-centurion-bank-merger/212660/

53

CENTURION BANK OF PUNJAB a part of HDFC BANK IN 2008 HDFC Bank bought Times Bank from media publisher Bennett Coleman & Co in 2000 While Centurion, which was bought out by Sabre Capital in 2003 after major losses, also bought Bank of Punjab and Lord Krishna Bank in 2005 ( Merged entity Centurion Bank of Punjab) HDFC Bank bought Centurion Bank of Punjab and merged it with its mother Bank in 2008
54

The biggest merger in **Indian banking is about to happen. HDFC Bank will take over Centurion Bank of Punjab (CBoP) in an all-stock deal. The respective bank boards are likely to meet on Saturday to consider the merger proposal. The share-swap deal, worth over Rs 10,000 crore, may be worked around the current market price of Rs 57 a share of CBoP. In the pecking order, the merged entity will still be way below Indias biggest private sector bank ICICI in terms of assets, but it will be significantly bigger than Axis Bank. On Wednesday, officials of both the banks held marathon meetings with a leading investment banker to discuss the finer points.
http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/Centurion-Bankof-Punjab-to-merge-with-HDFC-Bank/articleshow/2802712.cms **Standard Chartered and Anz Grindlays merger was bigger in value but it was for whole of Asia, the Middle East and possibly some part of Africa 55

Thus ended the story of the amazing journey of Bank of Punjab