 See 8% GDP in next 2-3 years: Uday KotakPublished on Mon, Jun 22, 2009 at 18:13 | Source : CNBC-TV18 Updated at Wed, Jul 01, 2009 at 17:03 19040 Investors following Kotak Mahindra. Share this News with them.
Narration (Menaka): But last year's biggest lesson was learnt here. People make up half of Kotak's total cost. After doubling manpower over in the boom years of 2006 & 2007, 2008 was a year of belt tightening. First came cuts in salary and then in staff. One thousand people from the brokerage business were out placed, attrition took away another 1,000 and 1,500 were laid off. By March employee strength was down from 22,000 to 18, 500 and people costs down by 20%. Dipak Gupta who doubles as HR head says the exercise has taught the bank an unforgettable lesson. Gupta: I think the first part that is the expansion piece was probably - when we look back with hindsight probably euphoria. So we should not actually have grown that fast from the people perspective, we should have moderated. Because it's unfair, it's not fair. So next time, when growth is there - the man power growth or the infrastructure growth in totality I think will be far more cautious and guarded. Narration: For Uday Kotak the global banking collapse of 2008 has just reinforced his conviction in conservatism. But a bigger national footprint is important to compete with the big boys and in fact the veteran deal maker is looking to acquire size. Kotak: if you have got any interesting ideas I am always open to looking at them. Narration (Menaka): But size is not all he is looking for. Q: You have no aspirations of being the largest bank in this country - private sector? Kotak: I think our aspiration is pretty clear. We want to be the best bank in India. Q: Best is a very qualitative, subjective judgment... Kotak: But that's where I think ultimately it will come in terms of long-term value creation for all your stakeholders. That's how I would define best. And in this world where you have a concept of not only too-big-to-fail but I believe too-big-to-succeed - you got to make sure as you grow you are able to constantly focus on creating long term value. And I am a believer in substance over form and therefore value is as important for me as scale. It's not that scale is not important - scale is important but not at the cost of destroying value. And many institutions in their desire to be big, run the risk of destroying value. Q: So you are ok with being a mid-size bank for the rest of your life?Kotak: I am ok with scale but not by destroying value. I think the two are necessarily, mutually exclusive. You can build scale and create value. But if you build scale and not create value - you have a problem. Q: How many years till number one? Kotak: We will make sure that this is a marathon and in a marathon you don't sprint but you don't run too slow.
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