From the per capita income as well as past five years’ CAGR perspective, West, North and South India geographies have outpaced the rest of India, accounting for more than two-thirds of the country’s GDP. The per capita incomes of these geographies stand at INR68,185, INR53,301 and INR52,536, respectively, and GDP in excess of 8% for FY07-12. In terms of deposit/branch as well, West and North are 50% ahead of the national average of INR0.6bn. Further, 78% of the total industry’s CA balance and 74% of total deposits are accounted by these geographies.
Analysis of geographical presence reveals that private banks have close to 70-90% of branches in these regions vis-à-vis the industry average of 62% (FY13). This is barring South-based banks—Federal Bank, South Indian Bank and Karnataka Bank—which obviously have a skewed presence. We read this geographical presence as a preference for better deposit accretion, better avenues for fee income and higher growth possibilities. What is also observed is a strong affinity of private banks towards these geographies, as seen from negligible shift in last 4 years.
In recent expansion (September 2009-13) massive changes have been seen in the Tier-wise profile of HDFC Bank with 23% increase in overall proportion of non-Tier 1 branches to 52%, followed by Axis Bank at 21% to 48%, IndusInd Bank at 19% and Yes Bank and Kotak Mahindra Bank at 17% and 15%, respectively. While HDFC Bank’s and Kotak Mahindra Bank’s approach towards semi-urban and rural areas has been balanced, ICICI Bank, Axis Bank and IndusInd Bank have favoured rural areas. There has been no major shift in profiles of PSU banks.
