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SOME ANSWERS THAT WILL INTRIGUE AND STARTLE YOU
Did this ‘Tortoise’ beat that ‘Hare’?
Both K. V. Kamath and Deepak Parekh won’t be around as ceos in 2010. Manish K. Pandey, Deepak Ranjan Patra and Angshuman Paul talk to people in the financial services industry to compare the legacies of the titans

Both started their careers when India Inc. was reeling under a tidal wave of nationalisation and ‘hard’ socialism of the early 1970s that all but smothered entrepreneurship in the country. Both belong to ‘communities’ that have acquired considerable fame for their entrepreneurial skills; one is from Mangalore while the other is of course a Gujarati. You could say that one of them had banking in his genes; his grandfather and father were both bankers. The other ‘discovered’ himself through banking. One was already part of India’s ‘elite’ while growing up, did his chartered accountancy from London and started his career with Ernst & Young in New York. The other came from far off Mangalore from a middle class family and chased his aspirational El Dorado by pursuing an MBA in IIM, Ahmedabad after an engineering degree from a government college. While the first was flying high in New York, the other quietly joined a public sector development lending institution called ICICI. A few years later, even as the man from Mangalore was gradually moving up the public sector ladder, his contemporary was persuaded by a maternal uncle to come and work for an Indian organisation. The maternal uncle happened to be the founder of HDFC.

Of course you have guessed the identities of the two by now. The man from Mangalore is none other than K. V. Kamath, who retired this year as the Managing Director and CEO of ICICI Bank. The chartered accountant who went on to work for his uncle is Deepak Parekh who is all set to step down as the Executive Chairman of HDFC. For the last two decades, the two have towered over the financial services industry in India like titans. There is not a shadow of doubt that both Parekh and Kamath have been unparalleled game changers and that their exit leaves a void that no individual can yet fill. Sure there is Chanda Kochhar who replaced Kamath at ICICI; sure there is Keki Mistry who will replace Parekh. Then there is Shikha Sharma, formerly of ICICI who is now duplicating her former employer’s unbridled aggression at Axis Bank. Then there is – according to many – the unheralded Aditya Puri who heads HDFC Bank and also the understated Renu Karnad, who will now be the Managing Director of HDFC. But virtually everyone in the financial services industry agrees that Kamath and Parekh are in a league of their own. There is a complete consensus in the industry that the two have left corporate legacies and institutions that will endure for a long, long time.

At Business & Economy, we could not resist asking the inevitable question: Was Deepak Parekh really better than K. V. Kamath? Even five years ago, when HDFC appeared a little somnolent and ICICI was taking aggressive growth to new heights, the question would have been laughable (In fact, many die hard fans of Kamath in Mumbai still find the question outrageous!). We spoke to many senior and mid-level professionals in the financial services industry to get their opinion and verdict. Most were willing to talk; but off the record. But a sense of what a majority had to say about the duo can be gleaned from what Jagannadham Thunuguntla, Equity Head of SMC Capitals Ltd. tells Business & Economy, “Mr. Kamath and Mr. Parekh are two of the finest leaders that India has ever produced. While it is very difficult to pick the better of the two, the award should go to Mr. Parekh for the ‘quality growth’ that has been displayed by HDFC. However, one can’t take away any credit from Mr. Kamath as he was the man who has redefined how India has done banking.” A top communications consultant in Mumbai who has worked on accounts of companies belonging to both the HDFC and ICICI conglomerates disagrees violently. “Parekh has always been the establishment man; please remember he virtually inherited HDFC. On the other hand, Kamath has been classically entrepreneurial. Look at the value, the institutions, the wealth and the sheer number of jobs he has created virtually from scratch,” he says. According to him, Kamath is the Dhirubhai Ambani of the financial services industry in India while Parekh is more in the Ratan Tata mould (Incidentally, the personal favourite of Deepak Parekh when it comes to entrepreneurs is Dhirubhai Ambani!) We decided to check out some ratings and some statistics to compare the two legacies. Let’s take a look at ratings issued by Fitch Ratings.

The sovereign long term outlook for both ICICI Bank and HDFC Bank is negative. But if you factor in the parent company HDFC, the Parekh legacy appears much more sound. Here is what the Fitch report says about ICICI Bank, “…Asset quality is, however, deteriorating and could lead to a lowering of individual rating if the deterioration is significant…” On HDFC, the report says, “…ratings are driven by its strong performance and financial position which are consistently among the best for Indian banks.”

          

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