It’s the rooftop of the Trident hotel in Mumbai on a surprisingly cool Saturday afternoon in mid-January. Jaspal Singh Bindra, group executive director and CEO (Asia) of Standard Chartered Bank, is whipping up some pasta in front of 100-odd people, including bank colleagues, reporters, photographers, two actors, and a bunch of international athletes.
The setting was perhaps unconventional for Bindra, who, contrarily, swears by conservatism, which is also the philosophy of his employers. He may owe his sporting spirit to years of decent-level college cricket, which allows him to embrace an opportunity of doing something atypical, like making Italian food with actor Rahul Bose. Ultimately, that was the need of the hour for him, to mix bonhomie with conservatism, as the pasta-making programme was a promotional event for the Standard Chartered Mumbai Marathon to be held the next day on 15 January.
Bindra, 51, is wearing a suitably casual striped Lacoste T-shirt, underneath the apron, which comes off before he steps into the conference room. He has bravely pushed back his lunch for this meeting, despite having dealt with pans and pastas for the last many minutes. The bright sunlight streaming in through the large glass windows that expose a vast expanse of the city from the 35th floor, adds to a general mood of affability that exists in Mumbai only for a few winter weeks.
Hong Kong-based Bindra is also a member of the board of Standard Chartered Plc since January 2010, the only Indian on the board (which also has a Singaporean of Indian origin). Perhaps it’s an endorsement of the bank’s strong presence in Asia; it’s definitely a validation of his position in the company he joined in 1998 as a time when it was not really a “talent magnet”.
“In the last four years,” he says, “when the industry is troubled, we have become a talent magnet. We can pick people at will, from Goldman Sachs, McKinsey and Co., Citibank, Blackstone…which wasn’t possible in 1998 when I joined. Only stray guys like me were keen to join. The reputation we enjoy today is as architects of restructuring.”
Standard Chartered was 100th in size (market capitalization) when Bindra joined them; they are in the top 25 now across all markets. They have now a full-fledged consumer bank, unlike 1998; they also have diversified a lot and are present in 70 markets with India being the single largest employer across the bank globally. In 2000, Standard Chartered bought out the Indian business of the erstwhile ANZ Grindlays Bank, which was then the largest foreign bank operating in India, with 56 branches. That acquisition has fuelled its ascent in India where it today has 94 branches, the highest among foreign banks.
Bindra says what’s made it possible for them is largely the diversification. “The fact is that we are the only international bank that has got rated upwards by all the rating agencies during the period of crisis alone. Everyone (else) has, at best, stayed where they are,” says Bindra.
Here again, the conservatism comes into play. He says lessons from the Asian crisis from the 1990s stood them in good stead. “It was tempting in 2003-04 when the world was booming to say why we should stay 80% secure when there is no credit problem. The world is growing, you could go 70% and make a huge difference to the profit but we said no, so all credit to the management.”
Standard Chartered became the first and only overseas firm to have listed Indian depository receipts (IDRs) in the local stock market in May 2010, in what the bank termed was a reinforcement of its commitment to India. IDRs are securities that represent an ownership interest in a fixed number of underlying equity shares of the issuing company. One Standard Chartered share is equal to 10 IDRs.
Standard Chartered’s profit before tax in India fell 33% in the year ended December because of lower income as interest rates rose and economic growth slowed. The bank also had to set aside $112 million (around Rs 547 crore) anticipating rise in bad loans. Profit before tax in January-December 2011 at $804 million was 33% lower than what the UK-based bank earned in the same period last year—$1.19 billion—making its India operations the fifth placed contributor among eight regions, down from first place in 2010.
Trendsetter: Cricket is Bindra’s other passion—he watches it as often as he can. Jayachandran/Mint
Bindra acknowledges that 2011 was difficult but points out that the bank’s investments in the country have still grown by 15% over 2010. “Every year, we have some markets that show uncertainty. The IDR issue took our chairman, CEO, finance director and Asia CEO one month of travelling the roads in Baroda, Chennai, Ahmedabad, Gurgaon for just $500 million, which we could have raised easily with one phone call. We did this because we have not lost our comfort or confidence in India.
“Our view is that India will be a rich source of raising capital and at that stage, we want to say we saw this coming. It’s like the marathon, when we, nine years ago, said we will pay millions of dollars to sponsor it in a city which doesn’t wake up early, doesn’t believe in running. It was a pretty difficult decision and today, it’s an envious property to own.”
Under Bindra’s stewardship, the British bank has not let go of any opportunity to make an acquisition in India without taking a hard look. “We have succeeded in acquisitions or have passed them. We passed RBS (Royal Bank of Scotland’s India business was up for sale in 2009). (But) every transaction that a foreign bank could do we have done, starting with Grindlays Bank, the first and the biggest,” Bindra says.
Bindra’s early years were spent in West Bengal, including Goethals Memorial School, a boarding school near Darjeeling, because his father’s transferable job would not have otherwise given him a steady base. He would not trade boarding school for anything because in hindsight, he says, it gave him independence without the protection of a home.
His affection for Kolkata stems from these early years, of his parents living there, studying in St Xavier’s College, of his son being born there and of his first day of work in Bank of America. “The bank I work for today started on 12 April 1858 in Calcutta. There are many milestones which will always remain extremely significant. No city will match it in terms of clubs and culture; plus my parents-in-law live there, so I have both reason and obligation to visit,” he says, smiling.
After Bindra had finished chartered accounting and was auditing for Citibank, the glamour of a foreign bank got to him. The flavour of the time was an MBA; it was a ticket to a job in a foreign bank, which “incentivized” him suitably. He chose XLRI School of Business & Human Resources, Jamshedpur, because with the Indian Institute of Management (IIM), Calcutta, not being available, it allowed him to be closer home. At the end of the MBA, he says he got more rational about his career; but then as destiny would have it, the highest paying job on campus and one that gave him a posting in Kolkata (where his parents lived) was Bank of America in 1984.
“I hadn’t lived with my parents since class II and the appeal to live with them was quite strong. Because I lost my parents so soon after, I am grateful I could spend some extra time there,” he says.
“Plus, it was a great time to be a young (foreign) banker in 1984 Calcutta. That was the hottest thing happening for girls.”