Mumbai: Aditya Birla Capital (AB Capital) is awaiting an RBI internal working group’s final recommendations before taking a call on pursuing a banking licence. AB Capital, which is the holding company for all financial services, will be listing its asset management company and the board will take a call on other value unlocking opportunities, CEO Ajay Srinivasan said.
After reporting a net profit of Rs 1,127 crore (up 22%), Srinivasan said that the company has achieved scale due to its diversified platform that allows it to leverage customer relationships, brand value, talent and information technology across businesses. This enables the company to compete with banks, whose distribution power enables them to own the largest lending, mortgage, mutual fund and insurance business in India.
In its draft recommendations, an internal panel of the central bank had suggested that the RBI allow corporate-owned NBFC to set up banks.
“In lending, we are about Rs 60,000 crore, which is a reasonable size compared to a mid-sized bank. Our total assets under management are Rs 3.4 lakh crore. Both as a diversified entity and as individual businesses, we have performed better than any individual cohort and that is the value of the diversified platform that we have built,” said Srinivasan.
According to Srinivasan, Aditya Birla Health Insurance is bringing in the largest number of new customers to the group, while the lending business is bringing in margin and profits. “Health insurance is so underpenetrated in India that there is tremendous scope. Similarly, there is a lot of potential to sell life protection and mutual funds are picking up in a big way in smaller towns,” said Srinivasan. He said that the technology platform is enabling the group to upsell and cross-sell products.
“Analytics is enabling us to offer an increase in sum insured to customers against a single click. Similarly, we are getting 10,000 health insurance customers a day against a product offering to Vi (Vodafone Idea) customers,” he said.
Besides giving a big boost to digital, the pandemic has opened new talent pools including access to gig workers.
In lending, the group is targeting to add 125 additional branches in 12-18 months and to increase its net interest margin to 6.25%. The company has managed to retain its loan book despite Covid challenges as it has digitised processes enabling automated data extraction from unstructured documents and using analytics to make personalised offers. Customers can complete their KYC process as well as their purchase over WhatsApp.