Bank Of Punjab PR Case Study

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Case Study, PR, Communications, Banking

Case Study, PR, Communications, Banking

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  • 1. Hits the ground running
  • 2. stock-taking in 1999-2000 Brand Equity of the Bank Did Share Price reflect the Brand Equity? How one translated Brand Equity into Share Value
  • 3.
    • 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
  • 4.
    • 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)
  • 5.
    • 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 India’s Private Sector Banks
      • Ranked No.22 amongst India’s Best Banks [ Private & Public Banks]
      • Ranked No.36 amongst all Banks in India [Including International / MNC Banks]
  • 6.
    • 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
  • 7.
    • 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.
  • 8.
    • 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
  • 9.
    • The problem could be in the following key areas:
    • Perceptions about the bank
    • Services compared to competition
    • Inadequate communications initiatives
    • Positioning of the Bank
  • 10.
    • 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
  • 11.
    • 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 BoP’s capabilities
    • Credibility lower than the other peer banks
  • 12.
    • 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
  • 13.
    • 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
  • 14.
    • 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)
  • 15.
    • @ 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’
  • 16.
    • 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
  • 17.
    • 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]
  • 18.
    • 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
  • 19.
    • Global Trust Bank (GTB) @ that point of time :
    • ABACUS [Any Branch any customer]
    • My Time ATMs
    • 2424 Phone Banking
    • [email_address]
    • GTB also tied-up with MindTree Consulting Solutions ( knowledge enabled software services company)
    • MOUs with Indiainfo.com and Sharekhan.com ( various service providers in Financial Services space)
  • 20.
    • 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’
  • 21.
    • 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
  • 22.
    • 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
  • 23.
    • To be seen as dynamic Outrun the others
    • To be seen as innovative Product / IT Service difference
    • To be seen as vibrant Be the Hero in customer service
  • 24.
    • Share prices need not be a reflection of present health
    • Most often share prices reflect the affirmation in the company’s future
  • 25.
    • 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
  • 26.
    • Share valuation ……
    • is a matter of perception
    • it is valuation of the brand
  • 27.
    • Valuation of a bank is a function of:
    • Operational viability
    • Present activity
    • Growth expectations, visibility and credibility
    • Vision for the future
  • 28.
    • 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
  • 29.
    • Discerning investors would also look at:
    • Capital base
    • Staff & training
    • Culture
    • Level of technology
    • Composition of the Board of Directors
  • 30.
    • A Scientific Process
    • Reflection of ‘aspiration’……
  • 31.
    • A strong brand has:
    • An identity
    • An identity that is positive
    • An on-going excitement about it “that generates expectations”
    • Memorability
  • 32. Core Product Packaging Image Association BRAND Delivery Of Promises Strong Brand Personality & Credibility STRONG VALUATION
  • 33.
    • Our belief ……
    • strategy and discipline
    • will build the brand and the share value
    • The key question:
    • Can This Be Achieved?
  • 34.
    • At a crossroad……
    • Need to tackle issues like:
    • Perception of the Bank
    • Image of the Bank
  • 35.
    • Association with Punjab too restrictive
    • Credibility low
    • No innovations perceived
    • Awareness on the bank pan-India very low
    • No USP
  • 36.
    • 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
  • 37.
    • Bridge the gaps in the banks services and positioning , both in real terms and at the perception level
    • Create products and services that unify BoP’s image across the country
    • PR exercise to build up BoP’s 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
  • 38.
    • 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
  • 39.
    • 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
  • 40.
    • 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
  • 41.
    • Build relationships with media
    • Initial months the focus on:
    • Familiarizing them
    • and Creating Credibility
  • 42.
    • 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 BoP’s 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
  • 43.
    • OBJECTIVE:
    • Creating awareness about the product by having Contest “Journey to Leadership” which will run nationally for 3 months
    • BoP’s 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
  • 44.
    • 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.
  • 45.
    • 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
  • 46.
  • 47.
    • 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
  • 48.
    • 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
  • 49.
    • 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.
  • 50.
  • 51.
    • 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
  • 52.
    • '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)
  • 53.
    • 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-for-bankpunjab-centurion-bank-merger/212660/
  • 54.
    • 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
  • 55.
    • “ 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 India’s 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-Bank- of-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
  • 56. Thus ended the story of the amazing journey of Bank of Punjab