Financial Daily from THE HINDU group of publications
Tuesday, Jun 13, 2006
Financial Daily from THE HINDU group of publications Tuesday, Jun 13, 2006 |
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Money & Banking
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Human Resources PSBs lag private peers in profits per employee Sudhanshu Ranade
Chennai , June 12 If you were looking for a lucrative bank job, you would choose foreign banks, one of the top private banks and public sector banks, in that order. But if you were more concerned about your chances of being able to land a job, you might decide to reverse your preferences. Looked at from the point of view of banks rather than prospective employees, two questions arise: what proportion of their total expenses are accounted for by wages? And what contribution do employees make to profits? So far as the percentage of wages to total expenses is concerned, ICICI Bank, with 7.47 per cent, leads the field by a large margin. HDFC Bank shells out about 4 percentage points more, but still does better than foreign banks, whose wage costs range from 12.35 per cent in the case of Citibank to 17.79 for HSBC. Public sector banks typically shell out well over 22 per cent, with PNB and CBI paying out more than 28 per cent. Wage costs for American Express, at 24.15 per cent, are, however, way above those for other leading foreign banks. To make matters worse, Amex also ranks so low down in profits per employee, that even many public sector banks do better. Citibank leads the field so far as profits per employee are concerned, with a whopping 21.75 lakh. No one else even comes close. The figure for ICICI Bank is only half as much. Stanchart, HSBC and HDFC employees generate profits of 11.5, 8.9 and 8.8 lakh respectively. SBI employees contribute only 2. The foreign and private banks shown in the table recruited many more employees since 2001-02. American Express, Stanchart, HDFC Bank, ICICI Bank and Citibank increased their employee count by 360, 221, 141, 135 and 88 per cent respectively. In two of these banks, the increased employee count was accompanied by an increase in profits per employee: American Express, where profits per employee, though still remaining dismally low, went up by about Rs 20,000; and ICICI Bank, where profits per employee more than doubled from Rs 5.33-11 lakh. All four public sector banks marginally reduced employee strength over the period though, with the exception of Bank of India, the other three registered 4 to 7 percentage point increases in the wages/total expenses ratio. On the other hand, profits per employee dropped more than 20 per cent for the Bank of India, while they increased two fold or more in the other three banks.
More Stories on : Human Resources | Public Sector Banks | Private Banks
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