India's Axis Bank CEO seeks to shorten next term to end

Lawrence Kim
April 10, 2018

Sharma joined the bank in June 2009 with a five-year mandate which was subsequently extended.

Sharma's re-appointment as the Managing Director & CEO of the Bank was revised from June 1, 2018 up to December 31, 2018.

"Kindly note that Smt".

The top banker has sought to cut short her term by December 31, 2018, instead of continuing on the post for another three years, reports said on Monday.

Sharma's fourth term as MD and CEO, which was granted a year ago, was originally set to end in June 2021.

Under Sharma, Axis Bank had kept the bad loans well under control, that was until RBI announced an asset quality review of banks in late 2015.

Sharma's fourth term at the helm of India's third largest private sector lender will run from June 1 to December 31, the bank said in a regulatory filing. Axis Bank did have a run-in with the regulator on bad loans. After conducting its annual risk based supervision, RBI said that the bank underreported bad assets worth Rs 9,480 crore in FY16 and Rs 5,633 crore in FY17.

During demonetisation, Axis Bank was in the news for the alleged involvement of some of its staff in illegal practices.

Sharma has been heading the bank for past eight years and 10 months, a period where she struggled to control the bank's non-performing assets (NPAs).

Speculations have been rife on Axis Bank's Board was seeking a successor to Sharma but an early re-appointment announcement by the bank previous year dashed the rumours of a leadership change in the bank.

Bringing the curtains down on a career that spanned almost a decade, Axis Bank CEO and MD Shikha Sharma, on Monday, requested the board that her new term at the bank be cut short. The process to appoint a new CEO from January 2019 will be initiated by the bank in the next few weeks. This meant that she would have continued on as the bank's chief until June 2022.

Sharma entered at a time when the world was reeling from the Lehman crisis and inherited a bank with heavy corporate book with a semi government institution. From Rs 4,110 crore in March 2015, the gross NPAs surged to Rs 21,280 crore by end of March 2017.

According to the report, the central bank sent a letter to chairman Sanjiv Misra and urged him to re-consider giving Sharma another term. The decision to quit from the position towards the end of the year has now triggered a hunt for her successor.

The bank is the seventh largest bank with a balance sheet size of Rs 6 lakh crore plus.

It may be noted that by the end of December 2016, the total bad loans for Axis Bank stood at a staggering Rs 20,466 crore as against just over Rs 5,000 crore a year before. During the same period, the lender's net profit halved from Rs 7,357.8 crore to Rs 3,679.2 crore.

Worse, its shareholder returns of 252 percent is less than the Bankex index at 270 percent.

Other reports by Click Lancashire

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