Top 5 Banks With Highest Operating Income Per Employee

In the last Slide Show we dealt with those top 10 companies that have posted the highest growth in terms of sales for the last three years on a CAGR basis. This time we are shifting our focus on the banking sector and looking at those banks that have the highest operating income per employee. The operating income can be defined as the amount of profit realised from a business operation after taking out the operating expenses such as cost of goods sold or wages and depreciation. For the banks the definition is a bit different. It is the earnings reported by a bank or bank-holding company after deducting normal operating expenses but before considering the gains or losses from the sale of securities, other losses and charge-offs as well as additions to the reserve account for possible loan losses. The income is divided by the total number of employees to arrive at the figure. Normally, operating income refers to earnings before the payment of income taxes. This is also called net earnings or net income.

IDBI Bank
With a vision of becoming the most preferred and trusted bank enhancing value for all stakeholders, the bank is a name to reckon with. The bank offers personalised banking and financial solutions in the retail and corporate banking arena. As on March 31, 2012, the bank had a network of 973 branches and 1,542 ATMs. The bank’s total business during FY11-12 reached Rs 3,91,651 crore and the balance-sheet size was Rs 2,90,837 crore while it earned a net profit of Rs 2,032 crore. The net profit is up by 23 per cent on a YoY basis. The company has topped our list through earning the highest operating income per employee. The bank has an operating income of Rs 1.64 crore per employee. On a year-to-date basis, the bank has yielded a return of 19.68 per cent.

YES Bank
The fourth-largest private sector bank in terms of balance-sheet as of March 31, 2012, the bank is well-poised to witness better growth going forward. The bank has a network of over 380 branches across 275 cities with 650+ ATMs and two national operating centres in Mumbai and Gurgaon. With an operating income of Rs 1.26 crore per employee, the bank has secured the second position. The bank has a presence in corporate and institutional banking, investment banking, corporate finance, branch banking, business and transaction banking and wealth management business. It is working with a vision of ‘building the best quality bank of the world in India’ by 2015. On a year-to-date basis, the bank has yielded a return of 77.63 per cent.

Corporation Bank
The second public sector bank to enter the capital market in the year 1997, its IPO at that point of time got oversubscribed by 13 times. It is one of the first to implement 100 per cent core banking services across all its branches. It is engaged in providing banking products and services primarily to individuals and corporate customers. The bank has featured in our list with an operating income of Rs 93 lakh per employee which has enabled the bank to secure the third slot. It serves its customers with over 6,164 service outlets across India. The bank was founded in 1906 and is based in Mangalore. On a year-to-date basis, the bank has yielded a return of 15.06 per cent.

Oriental Bank of Commerce
A mid-cap public sector bank, it remains one of the most efficient banks in India in terms of employee utilisation. At the end of March 31, 2012, each employee of the bank generated revenue of almost Rs 90 lakh of operating income. The bank would have generated more income per employee had it not been for a 30 per cent increase in employee expenses in FY12 on a yearly basis. At the end of FY12 it generated profit after tax of Rs 1,141 crore against revenue of Rs 5,456 crore. As of March 31, 2012, it operated 1,772 branches and 1,270 ATMs. It was incorporated in 1901 and is headquartered in New Delhi. On a year-to-date basis, the bank has yielded a return of 60.57 per cent.

Axis Bank
Axis Bank is promoted jointly by the largest and the best financial institution of the country, UTI. The bank was set up with a capital of Rs 115 crore, with UTI contributing Rs 100 crore, LIC up to Rs 7.5 crore and GIC and its four subsidiaries contributing Rs 1.5 crore each. It remains of the fastest growing banks in India. The bank is not registering rapid growth but also remains one of the most efficient private sector banks. At the end of FY12 each employee of the bank has generated operating income of Rs 85 lakhs. The total employee strength of the bank stood at 31,738 at the end of FY12 as compared to 26,435 in the previous year. On a year-to-date basis, the bank has yielded a return of 51.67 per cent.