This man was fond of buying sunken banks! He bought 6 banks, made one bank shine and took it to ₹40,000 crores

Success Story : This is the story of a man who was born in a farmer’s family in a village. He studied well and became a lawyer. But he wanted to do something special for the poor and farmers. When he got the chance, he bought a large stake in a sinking bank. Using his brain, he made that bank shine so much that it became the top bank of South India. The sinking bank that he bought has a market cap of around Rs 40,000 crore today. The man’s name is Kulangara Paulo Hormis. He is also known as KP Hormis in short.

Hormis was born in a village in Kerala. His family made a living from farming. He worked hard and became a lawyer in the Munisif Court of Perumbavoor. At the same time, Travancore Federal Bank Ltd. focused on agriculture, but it could not succeed. There came a time when it reached the verge of bankruptcy. Since KP Hormis had a place in his heart for soil and farming, he could not see this. In 1944, he left his job and bought shares in the sinking bank. From here, a new journey of his life started.

Managed the bank and wrote his destiny with his own hands
Hormis had bought so many shares that he had the control of the bank. The share capital also increased from Rs 5,000 to Rs 71,000. First of all, he shifted the bank from its Nedampuram branch to Aluva (Kerala). This was not only a new location, but the bank also got a new name. In 1945, Travancore was removed from the name of this bank. Now its name remained only Federal Bank.

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At that time, Kuries started becoming popular in Kerala banks. It was a program that allowed bidders to participate in chit-fund by giving them a 50 percent discount. Bidders also got an official receipt for this transaction. When Federal Bank got a banking license in 1949, KP Hormis started Kuries for farmers. Meaning, farmers could get money through chit-fund here.

5 more banks also bought
Who knew that this idea would work? Only Hormis was sure about it. The scheme worked and so did Federal Bank. The bank increased its branches in Kerala from one to three. Many other banks were also running in the game of curries (chit-funds), but they all proved to be flops. The blow was so strong that they also started going bankrupt. By 1968, KP Hormis bought 5 more such banks. These banks included the names of Chalakudy, Cochin Union, Marthandom, St. George Union, and The Alleppey Bank.

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The same Federal Bank which was providing banking services to farmers and small people till now, was converted into a scheduled commercial bank in 1970. It opened its first office in Mumbai. Federal Bank started spreading its wings. Very soon it opened 276 branches. In 1977, its share capital increased to Rs 1 crore. Currently KP Hormis is no more in this world. Born on 18 October 1917, Hormis said goodbye to the world at the age of 70 (26 January 1988). Even after his death, the speed of the bank’s progress remained the same.

Investors are in a fix on the IPO
Gradually, customers started joining and money started getting deposited in the bank. In this way, when the bank had deposits of more than Rs 1000 crore, then the IPO was brought. The IPO got a tremendous response from the investors and it was subscribed 60 times. Currently, the market cap of the company is Rs 39,912.48 crore. Today (on 28 May 2024) the stock closed at Rs 160. In April this year itself, it had made its lifetime high (Rs 270).

By 2009, KP Hormis’ Federal Bank opened more than 600 branches and did a total business of Rs 50,000 crore. In 2013, this bank launched the first e-passbook in the country, named Fedbook. By 2018, the bank grew at an annual rate of 19 percent and crossed the 1 lakh crore deposit mark. By the same time, it also crossed the level of 2 lakh crore transactions.

Federal Bank has its presence all over India today. It has more than 1650 branches in 32 states and union territories. The bank’s official website claims that more than 1 crore 83 lakh customers are happily associated with it. There are 1509 banking outlets, 1441 ATMs, and 593 cash recyclers. This entire success story is based on the intentions of a farmer’s son born in a village.

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FIRST PUBLISHED : May 28, 2024, 16:52 IST