Achche din is here for stakeholders and investors: Uday Kotak

Uday Kotak, executive vice-chairman and managing director of Kotak Mahindra Bank, was at a press conference after the announcement of the deal with ING Vysya Bank, saying the deal was an alliance between US (Uday Sareen, chief executive-designate of ING Vysya Bank) and UK (Uday Kotak). In an interview with Nupur Anand, he explains the synergies of the deal: Excerpts:

What is the rationale behind the merger and how do you see the synergies working for you?

The rationale is two-fold: One is business sense and the other transformational. The combined entity moves towards our dream of bigger, bolder, better - that is what we want to do. Also, it is important that there is significant complementation. There is very little overlap between the two banks.

As you would have seen, ING Vysya Bank is 64 per cent in the South and Kotak Mahindra Bank is 80 per cent in the West and North. So, we will have a more even spread in terms of geography. There couldn't be a better fit in terms of opportunities. We have strengths in several areas. We have lots of products and their distribution allows us to leverage that.

We can learn from their SME (small & medium enterprise) business and we have a stronghold in the auto and commercial vehicle finance business. So, we can work on that together.

How will you bridge the cultural difference between the two organisations?

Culture is in the mind. I believe we can learn from their culture. It is like the water of two oceans - when it gets together, it mingles. But of course, we have to work at it; we can't take it for granted.

ING Vysya's cost-to-income ratio is about 55 per cent. How do you plan to reduce that?

Cost-to-income has two parts --- cost and income. You will have to increase the income to bring down the cost. We are confident we can do that over a period of time and build significant returns on assets.

First, we will work on areas in which we can build integration in time. We will work at it very systematically; we will not be in a hurry. We will build it in time to create a very fine global and Indian institution.

You have to reduce the promoter shareholding further. What steps will you take for this?

According to the Reserve Bank of India, we have to reduce promoter shareholding to less than 30 per cent by December 2016. After this deal, we are already at 34 per cent. So, we have to reduce only four per cent more in the next two years.

Will there be any rationalisation in terms of employees?

There is no immediate plan, either in terms of employees or branches.

Kotak Mahindra Bank pays higher interest on savings deposits compared to ING Vysya. How will you manage that?

All ING Vysya savings bank customers will get the same rate as Kotak Mahindra Bank customers.

What does the deal mean to you?

It is a momentous occasion for us and we believe achche din is here for stakeholders and investors.