Bank Of Punjab PR Case Study

Hits the ground running

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

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

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 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]

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.

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

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

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

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

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)

@ 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’

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

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]

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

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)

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’

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

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

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

Share prices need not be a reflection of present health
Most often share prices reflect the affirmation in the company’s future

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

Share valuation ……
is a matter of perception
it is valuation of the brand

Valuation of a bank is a function of:
Operational viability
Present activity
Growth expectations, visibility and credibility
Vision for the future

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

Discerning investors would also look at:
Capital base
Staff & training
Culture
Level of technology
Composition of the Board of Directors

A Scientific Process
Reflection of ‘aspiration’……

A strong brand has:
An identity
An identity that is positive
An on-going excitement about it “that generates expectations”
Memorability

Core Product Packaging Image Association BRAND Delivery Of Promises Strong Brand Personality & Credibility STRONG VALUATION

Our belief ……
strategy and discipline
will build the brand and the share value
The key question:
Can This Be Achieved?

At a crossroad……
Need to tackle issues like:
Perception of the Bank
Image of the Bank

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

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

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

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

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

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

Build relationships with media
Initial months the focus on:
Familiarizing them
and Creating Credibility

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

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

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.

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

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

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

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.

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

'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)

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/

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

“ 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

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

Bank Of Punjab PR Case Study

by Devasis Chattopadhyay

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