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In a surprise move, Shikha Sharma wants 7-month term as Axis Bank chief

She would be completing her third term as MD and CEO of Axis Bank on May 31

Anup Roy & PTI  |  Mumbai 

Shikha Sharma
Axis Bank Chief Executive Officer Shikha Sharma (Photo: Kamlesh Pednekar)

In an unusual move, Managing Director (MD) and Chief Executive Officer (CEO) wanted her new term to be reduced to seven months from three-year tenure that has been approved by the bank’s board.

The board has accepted her request for a shorter seven-month term (from June 1 to December 31, 2018), subject to the approval of the (RBI), the bank said in a regulatory filing.

Sharma would be completing her third term as MD and CEO of on May 31.

Sharma was appointed MD of in June 2009 by P J Nayak, the then chairman of the bank. Sharma’s appointment came at a time when UTI Bank was rechristened and the board felt the bank should be more aggressive in pursuing business. The bank had a legacy issue and had high exposure in corporate loans. Sharma’s job was to fortify the retail lending practice of Axis. Sharma, a veteran ICICI Bank professional, did exactly that.

Sharma was with ICICI Bank for 29 years, and would be completing nine and a half years with Axis upon her retirement in December. Before coming to Axis, she was the MD and CEO of

A contender for the top post at ICICI Bank, Shikha left the bank for Axis when became the head of the former.

But Sharma’s accession was not an easy one. Axis witnessed a flurry of senior management exits upon the appointment of an ‘outsider’ as the bank’s CEO. Sharma almost completely changed the old team and picked her own deputies.

Under her, Axis became a true universal bank with an enviable investment banking team. regularly features in the top three of every league table in debt and equity fundraising. Sharma acquired Securities with this specific aim in mind.

While her strategy to acquire Enam’s investment banking business for Rs 20.67 billion and expand the bank’s retail base worked very well, loans to the infrastructure sector players resulted in high (NPAs).

When she joined, the gross NPA of the bank was at 1.01 per cent of total advances, but by December 2017, the gross NPA rose to 5.28 per cent.

The (RBI) audit also found the bank to be hiding much of its bad debts. The divergence between what the bank reported and what the auditors found were to the tune of Rs 48.67 billion in 2016-17 and Rs 94.78 billion for 2015-16.

As a result of the pressure of bad debts, net profit at the end of December was at Rs 7.26 billion, against Rs 5.62 billion when she became the MD of the bank.

Between 2008-09 and 2016-17, Axis Bank’s net interest income and other income, mainly from fees, grew fivefold and fourfold, respectively.

In July 2017, Sharma was recommended for a three-year reappointment by the bank’s board, effective from July 2018. Some analysts say the board decision was hasty.

But now the has reportedly asked the board to reconsider the appointment.

The could be upset with the wide divergence in asset quality reporting, but probably also angered the by violating know-your-customer norms during demonetisation, and even before that.

Axis Bank, ICICI Bank, and were fined by the regulator in June 2013 for helping a bogus client legitimise unaccounted money.

Sharma would be 60 in November 2018, and complete 10 years as the bank’s CEO the following year in June.

Considering Sharma was a lateral entry, hired from ICICI Bank, and not grown organically in the bank, such as Aditya Puri in HDFC Bank, the might want to ensure the bank has other options as well.

THROUGH THE YEARS

2009: Moves into corner office at Axis Bank

2010: Acquires Vallabh Bhansali-led Enam’s investment banking arm

2011: Rolls out online broking; push for infrastructure lending

2012: Raises Rs 55 billion in capital for future growth

2013: Targets ultra high net worth segment via private banking

2015: Begins to feel heat from corporate defaults

2016: Faces trouble after demonetisation, sale rumour

2017:

* Bank acquires FreeCharge to push digital banking

* Faces RBI’s wrath for NPA divergence for FY16 and FY17

* Regulatory flak for alleged leak of its Q1 earnings on WhatsApp

* Raised over Rs 110 billion in capital from institutional investors

Priorities & focus areas

* Push with agenda to increase higher share of retail in business

* Leverage subsidiaries for business growth

* Strengthening consumer-friendly profile

First Published: Mon, April 09 2018. 21:48 IST
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