Ashok Vaswani, MD & CEO, Kotak Mahindra Bank
MUMBAI: Kotak Bank chief executive Ashok Vaswani said large banks that sold stakes in their financial-services subsidiaries to foreign investors lost considerable long-term value, arguing that full ownership of such businesses is a strategic advantage.Speaking at a media gathering on Wed, Vaswani urged reporters to “go and do a bit of history” on how big banking groups monetised their subsidiaries in earlier years. “Every time a big group sold some part of their stuff, usually they sold it to a foreigner. And then how much money the foreigner has made at the cost of the group,” he said, adding that the arithmetic makes for “a very interesting maths.” Many Indian banks had sold stakes in their mutual funds, insurance and securities arm to monetise their investments and these businesses have grown significantly.Vaswani said Kotak’s approach of retaining full ownership across its 19 financial-services subsidiaries has helped build long-term embedded value. “Kotak is the single broadest financial conglomerate in India. There’s nobody else like Kotak. We manufacture every single financial-services product there is and we own all those subsidiaries 100%,” he said.He also highlighted cross-selling across business lines, particularly institutional banking. “It is so beautiful to see when somebody like Hyundai or LG comes to do an IPO — the corporate banker introduces the investment bank, research does a paper on them, the treasury does the FX, the consumer bank picks up the balances. We cater to the customer across,” he said, adding that bank’s strategy over the past two years has centred on customer focus.
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