At Business & Economy, we could not resist asking the inevitable question: Was Deepak Parekh really better than K. V. Kamath? Even five years ago, when HDFC appeared a little somnolent and ICICI was taking aggressive growth to new heights, the question would have been laughable (In fact, many die hard fans of Kamath in Mumbai still find the question outrageous!). We spoke to many senior and mid-level professionals in the financial services industry to get their opinion and verdict. Most were willing to talk; but off the record. But a sense of what a majority had to say about the duo can be gleaned from what Jagannadham Thunuguntla, Equity Head of SMC Capitals Ltd. tells Business & Economy, “Mr. Kamath and Mr. Parekh are two of the finest leaders that India has ever produced. While it is very difficult to pick the better of the two, the award should go to Mr. Parekh for the ‘quality growth’ that has been displayed by HDFC. However, one can’t take away any credit from Mr. Kamath as he was the man who has redefined how India has done banking.” A top communications consultant in Mumbai who has worked on accounts of companies belonging to both the HDFC and ICICI conglomerates disagrees violently. “Parekh has always been the establishment man; please remember he virtually inherited HDFC. On the other hand, Kamath has been classically entrepreneurial. Look at the value, the institutions, the wealth and the sheer number of jobs he has created virtually from scratch,” he says. According to him, Kamath is the Dhirubhai Ambani of the financial services industry in India while Parekh is more in the Ratan Tata mould (Incidentally, the personal favourite of Deepak Parekh when it comes to entrepreneurs is Dhirubhai Ambani!) We decided to check out some ratings and some statistics to compare the two legacies. Let’s take a look at ratings issued by Fitch Ratings.
The sovereign long term outlook for both ICICI Bank and HDFC Bank is negative. But if you factor in the parent company HDFC, the Parekh legacy appears much more sound. Here is what the Fitch report says about ICICI Bank, “…Asset quality is, however, deteriorating and could lead to a lowering of individual rating if the deterioration is significant…” On HDFC, the report says, “…ratings are driven by its strong performance and financial position which are consistently among the best for Indian banks.”
The sovereign long term outlook for both ICICI Bank and HDFC Bank is negative. But if you factor in the parent company HDFC, the Parekh legacy appears much more sound. Here is what the Fitch report says about ICICI Bank, “…Asset quality is, however, deteriorating and could lead to a lowering of individual rating if the deterioration is significant…” On HDFC, the report says, “…ratings are driven by its strong performance and financial position which are consistently among the best for Indian banks.”
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