New Delhi: ICICI Prudential Life Insurance CEO Sandeep Bakhshi has stepped into new shoes, and pretty large ones at that. Provided regulatory approvals come by, he will assume charge today as the chief operating officer (COO) of India’s largest private sector bank by consolidated assets. Chief executive officer (CEO) Chanda Kochhar has gone on leave, pending the completion of a probe over an alleged conflict of interest that has led to months of controversy for the lender.
On Monday, the ICICI Bank board appointed Bakhshi, 57, as the COO—a post that was created for him—for the next five years. In his new role, he will be responsible for handling all the businesses and corporate centre functions at ICICI Bank. He will report to Chanda Kochhar, but while she is on leave, he will report to the bank’s board.
N.S. Kannan, executive director at ICICI Bank, will replace him as CEO of ICICI Prudential. Bakhshi, however, will continue as an executive director at the insurer.
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Four senior executives of ICICI Bank who have been on the ICICI Bank board are N.S. Kannan, Vijay Chandok, Vishakha Mulye and Anup Bagchi. However, the choice for the COO’s job fell on Bakhshi, probably because he is seen as a leader who doesn’t believe in factionalism and can take the team along. Credited with taking the first Indian insurance company public, Bakhshi, had recently been re-appointed as ICICI Prudential CEO for two years. He is as “cool as a cucumber" who cares for stability, says one of his colleagues.
Bakhshi cut his teeth in development banking with the erstwhile ICICI Ltd in 1986. He headed the group’s non-life insurance company ICICI Lombard General Insurance Co. Ltd for two years between March 2007 and April 2009 and became a deputy managing director and head of retail in the bank before shifting to the life insurance company in August 2010. With varied experience in project financing, risk management and corporate banking beside retail, he is perceived to be an institution builder.
He returns to ICICI Bank after serving as managing director and CEO of ICICI Prudential for eight years. He will be the senior-most official at ICICI Bank after Kochhar. He has headed both retail and corporate businesses across the ICICI group. Before moving to the bank, he had served as MD & CEO of ICICI Lombard General Insurance.
The biggest challenge facing Bakhshi, an XLRI alumni, will be to allay the concerns of investors, shareholders and regulators around corporate governance. Investors believe that he will also be responsible for resolving the bad loan problem, which has been plaguing the bank for the last three fiscal years.
“The appointment of Mr. Sandeep Bakhshi as chief operating officer is the most practical middle ground that the board could have adopted. Mr. Bakhshi’s immediate priorities would be to get the executive leadership team to rally around; rebuild currency with stakeholders including the regulator, investors and shareholders; and install the support system that the probe committee needs in order to conduct its investigation in a fair and transparent manner," said A.S.V. Krishnan, a banking analyst with SBICap Securities.
ICICI Bank shares have underperformed its private sector peers for a long time over bad loan concerns, but some analysts have turned positive on ICICI Banks shares after his appointment. Sanjiv Bhasin, executive vice president (markets and corporate affairs) at India Infoline, said his appointment soothes concerns over governance issues and corporate loan demand is also expected to pick up. The stock could be bought on declines, he said.
In the near term however, ICICI Bank shares could remain volatile, depending on the broader market, Bhasin said. On Tuesday, ICICI Bank shares were down 0.65% in early trade on BSE, as compared to a 0.40% fall in Sensex. The bank’s shares had jumped 3.7% on Monday before Bakhshi’s appointment.