Fillable Printable Farewell Message for a Colleague

Farewell Message for a Colleague

Chairman’s Farewell Message to his UCO Colleagues

27 Aug 2015

Dear Colleagues,

I shall be laying down my office as Chairman and Managing Director of UCO

Bank on 31

Aug’2015 at the end of my five-year tenure.

My banking career which has spanned 37 years and four Public Sector Banks

has been pretty long but eventful, challenging but invigorating, demanding yet

satisfying. As a banker it has been my privilege to be part of a noble mission. A

mission which made me witness first-hand the transformation and awakening

of an emerging giant called India, the incredible growth of its agriculture and

industry, the giant leaps in its science and technologies. And throughout this

transformation, the banking sector stood like a rock at every step of the way to

provide the vital capital so necessary to keep the wheels of progress running.

From a small farmer in some remote village to some top industrialist in a metro

city, I have had the opportunity of dealing with them many times. Almost every

such occasion offered some new insight about human nature, their prides and

prejudices, their traditions and cultures, their hopes and ambitions.

On taking over at UCO Bank, it soon became clear to me that the institution had

huge untapped potential to grow but some equally daunting challenges to

overcome. There was an over-dependence on bulk business, lack of marketing

focus, low customer base, weak asset management practices, non-utilization of

technology to the desired level, ageing workforce, and a legacy of sizable non-

performing assets.

My colleague EDs and I initiated the process of re-engineering the organization

into a customer-focused, cost sensitive and profit-oriented business entity. All

important aspects of the Bank’s functioning came up for close scrutiny and

reengineered as required, keeping the long-term interest of the Bank in mind.

The organization structure was redrawn, the business model was changed,

systems and processes were overhauled. Products were redesigned to align with

market requirements. Retail banking was given a new thrust. Huge focus was

put on acquiring new customers in large numbers. Extensive use of technology

became a vital part of our strategy to improve organizational efficiency and

delivery of products and services, to expand outreach, and to strengthen

control and supervision mechanism. Simultaneously, revitalizing bank’s human

resource was given top priority.

You will agree that the transformational measures yielded results. Our

operating profit which stood at around Rs. 1700 crore as on Mar’10 has grown

2.88 times in the last five years to Rs.4910 crore. Between Apr’2010 and

Mar’2015, our low-cost CASA deposit percentage has grown by 868 basis points

from 23.56% to 32.24%, percentage of core deposit in total domestic deposit has

grown rapidly from 52.66% to 75.12% (+2246 basis points) while percentage of

high-cost deposit in total deposit has come down sharply by 2408 basis points

from 24.22% to 0.14%. During the five year-period, Apr’10 to Mar’15, Bank

opened more than double the number of brick-and-mortar branches (868) than

it had during the entire last decade (387 branches). Our ATM installations have

grown more than 4 times from 477 as on Mar’10 to 2096 as on Mar’15, while

card user base multiplied seven times in the intervening period to reach 61.12

lakhs as on Mar’15. In the process, during last five years we achieved a CAGR of

11.85% in Total Deposits, 16.06% in CASA deposits, 12.73% in Total Advances,

23.54% in Operating Profit and 19.07% in Net Interest Income.

If I look back at my tenure in the Bank, every year brought its own mix of

successes and challenges, but our direction was clear and we knew what we

must do. To simplify our organization, to build capital, and to navigate

intelligently through the slow-growth phase. Today, our bank is exposed to less

risk and is better prepared in terms of human resource, technology prowess,

products and processes.

My five years at the helm of UCO Bank can be summarized in a few words:

In the face of significant challenges, we made significant progress.

But we have miles to go. Many more mountains to climb. Many more challenges

to overcome. New competitors, new channels, new processes and new

consumer expectations are shifting the banking industry paradigm. Banks can

no longer just benchmark against core competitors or other universal banks.

They need to take a more holistic view of the market, looking at partnerships

between banks and non-traditional players such as Paypal & Facebook (who

both now offer international money transfer services) and emerging disruptors

such as payment banks. To surive and thrive, banks will increasingly have to

invest in techniques to develop new intelligence, to gain new customer insights

(e.g. how likely customers are to change providers or have more than one

provider), effectively segment their customers, develop deeper relationships

and be the bank of choice. Along with employing currently dominant

technologies, what will be of essence is developing the flexibility to quickly

adopt new innovations in financial services as they gain acceptability and

become commercially viable. This adaptability is as much a state of mind as it

is a business capability, since it requires a willingness to be continually

dissatisfied with the status quo. Please remember what Rainer Maria Rilke said:

"The future enters into us, in order to transform itself in us, long before it happens."

I take your leave confident in the belief that UCO Bank would achieve its stated

objective of becoming one of the top banks in the country admired by peers,

cherished and nourished by its proud employees and praised by its customers.

With sincere best wishes to all members of the UCO family.

ARUN KAUL