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State Bank of India is seeking to engage the services of a consultant to suggest strategies to improve Return on Assets (RoA) and pre-provisions operating profit (PPOP) by increasing income from different sources, reducing cost, and optimising the balance sheet.
The consultant is expected to to draw up a portfolio strategy and long-term growth opportunities for India’s largest bank; and strategies for current account acquisition and increasing its balances, in addition to optimising ALM (asset-liability management) to maximise returns, and pricing optimisation for SME and retail portfolio.
Cost-optimisation
The consultant will also be required to suggest cost-optimisation measures, and build a balance sheet optimisation tool for long-term capital allocation through the cycle.
In addition, it will also need to develop a tool to assess payback period for key initiatives and projects.
When it comes to portfolio strategy and long-term growth opportunities, the bank wants to benchmark its overall portfolio with peer banks; identify long-term growth opportunities; identify opportunities for improvement in the share of high yield products – personal loans, business loans; and look at strategic portfolio shifts and balance sheet steering mechanisms.
On the current account acquisition and ALM strategy front, the bank is eyeing initiatives to improve current account acquisition; strategies to minimise the maturity mismatches across time buckets with a focus on utilising the surplus available in the respective buckets to maximise returns; and strategy for benchmarking and optimising MCLR (marginal cost of funds-based lending rate).
When it comes to cost optimisation, including physical footprint, network and physical technology assets costs, overheads and others, the bank wants a rethink on the role of branches/offices and what activities/processes can be centralised; identify opportunities for overall infrastructure cost reduction; and baseline current IT spend by category and payback period.
The bank, which had a deposit level of ₹28,30,538 crore and advances of ₹20,47,779 crore as on December-end 2018, said deliverables have to be designed and executed to its satisfaction in a 12-month period starting from the date of commencement of the project.
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