HYDERABAD : In a few weeks from now, Axis Bank’s chief Shikha Sharma will hang up her boots. The celebrated banker’s three-decade-long tryst with the financial sector has seen several firsts.Sharma, who began her career with ICICI Ltd in early 1980, was instrumental in setting up ICICI Securities and it was under her leadership that ICICI Prudential Life Insurance emerged as the numero uno private sector life insurer.
At Axis, she took-over the reins in June, 2009, just when the world was reeling under a severe financial crisis. Her accession came when UTI Bank was renamed Axis Bank, and was struggling with legacy issues, having lent excessively to corporates. Sharma’s immediate task was to neutralise the damage by expanding deeper into the retail sector -- whose loan book has more than doubled to over 46 per cent now from 21 per cent in June, 2009.
But, this wasn’t an easy chore, as the bank saw a series of top management exits, including her predecessor P J Nayak, apparently miffed by her appointment. Not one to be let down, Sharma built an A-team in no time, who together contributed to the evolution of the country’s third-largest bank as a universal lender with a balanced presence in corporate, retail, and investment banking. Besides, she also beefed up its advisory capabilities and developed the payments system.
Her first bold stroke came a year after joining Axis, acquiring investment banking firm Enam Securities Pvt. Ltd in November, 2010. But the deal was criticised for over valuation. So a year-and-half later, in April 2012, the deal size was cut to `1,396 crore from `2,070 crore. The deal paid off and subsequent years saw Sharma and Axis grow steadily and gain market share.
However, all hell broke loose in 2015 when the RBI’s asset quality review threw up startling revelations with gross bad loans shooting through the roof from `915 crore in 2009 to `25,000 crore in 2017, while gross NPA ratio touched 5.28 per cent for the first time in a decade. Axis also fell out of RBI’s favour for under reported bad loans in excess of 15 per cent. During FY16 alone, RBI assessed that its bad loans were 156 per cent higher than disclosed.
A year later, divergences stood at `5,632 crore. This attracted the wrath of RBI, which slapped Rs 3 crore penalty, but the most damning was the bank coming under Sebi’s scanner for a suspected leak of its quarterly financial results found to be circulating on WhatsApp groups before they were made public. Though, in June, the board allowed Sharma’s reappointment for another three-year term, RBI stepped in to cut it short to December.