NEW DELHI: A day after the announcement of Sandeep Bakshi to helm the affairs of ICICI Bank, brokerages and investors have given a thumbs up, anticipating that Bakshi’s appointment was intended for the long haul.
ICICI’s current CEO & MD Chanda Kochhar’s tenure expires in March, 2019 and though the jury is still out whether she’ll get an extension, market watchers believe that Bakshi’s appointment as a whole-time director & COO for five years addresses concerns of succession planning and ensures business continuity.
“For now, perhaps the board has found a safe middle ground,” Jefferies analysts wrote in a note adding that Bakshi’s rich experience of 32 years at the bank under various verticals should aid smooth transition.
It, however, wondered about the circumstances the current three-tier structure might end, as COO role — a position created on Monday – seems unnecessary in the long-run.
Fund houses also expect the management to shift to business operations and revive the falling financials of the bank, which reported one of the lowest profit figures during the March quarter.
While IDFC said the appointment was a win-win for both ICICI Bank and ICICI Prudential and sees Bakshi as the de-facto interim CEO, Citi believes the appointment significantly reduces uncertainty regarding management continuity.
Several brokerages also are of the firm belief that roping in an internal veteran ensures that he will continue with the existing policies of the bank, put in place Kochhar and team.
It may be noted that Kochhar, who took over as the CEO from K V Kamath in May, 2009, isn’t new to crises, having weathered several ups and downs all through her tenure.
It was under her leadership that the private lender, which until then relied heavily on retail loans, set its sights on corporate loans taking advantage of the surging infrastructure industry in the country. In hindsight, however, the rapid growth in the bank’s corporate loan book emerged as Kochhar’s nemesis.
On Monday, the bank’s board said it accepted Kochhar’s request for leave, considering the ongoing investigations against her regarding allegations of quid pro quo in return for loans to certain borrowers namely Videocon Group and Essar Group.