In the hot seat

I don’t regret the timing at all,” says 47-year-old Chanda Deepak Kochhar in her first media interaction, hours after the 16-member board of ICICI Bank put their seal on her appointment as the new Managing Director & CEO of the country’s second-largest bank. Come May 1, 2009, Kochhar will succeed Kundapur Vaman Kamath. After this, Kamath, the 61-year-old visionary banker, will don the mantle of Non-executive Chairman.

The succession plan at ICICI Bank wasn’t unpredictable. It became fairly clear that Kochhar was the frontrunner for the corner room when she was elevated to Joint Managing Director & CFO— the second most powerful position in the bank—early last year.

Kochhar admits that the banking environment has turned volatile and banks have to adjust themselves to the new ground realities. Draped in her trademark sari, Kochhar remarked: “You have to watch the business environment all the time and continue to develop strategy accordingly.”

Kochhar joined ICICI (then a development financial institution, or DFI) 24 years ago. In 1993, she was part of the core team that worked on the blueprint for the commercial banking foray; and in 1996, she was hand-picked to head the infrastructure group in the areas of power, telecom and transportation.

Kamath himself points out that what worked in her favour was her sheer experience at the bank. This would have helped her gain an edge over the other contenders in the fray for the top job. These include Shikha Sharma, head of ICICI Prudential Life Insurance, and two younger Executive Directors—V. Vaidyanathan, who heads retail, SME and rural banking, and Sonjoy Chatterjee, who looks after the international business.

Kochhar’s contribution to the bank’s growth has also aided her rise to the top. After taking charge of the bank’s top 200 corporate clients in 1998, her biggest contribution came in 2000, when she was chosen to head the retail business.

Kochhar’s biggest challenge now would be to scale up the bank’s low-cost deposits. Is she the right person to take on such challenges? Vaidyanathan feels so. “She is level-headed and has a balanced approach.” And is in the right place at a challenging time.

The agenda for Chanda Kochhar To find the right balance sheet mix. Current status: The bank’s balance sheet is highly skewed towards retail, with almost 60 per cent of advances parked in retail assets; the rural and international portfolios have yet to be scaled up. To bring back investor confidence in the bank. Current status: The share price has lost 60 per cent since last December; the banking index has lost 45 per cent. To identify the right time to raise capital and also manage capital adequacy. Current status: Outgoing CEO K.V. Kamath had raised a billion dollars in capital when the equity market was buoyant; follow-on offerings, too, were successful. To boost employee morale at a time when there are job losses in the industry. Current status: There have been reports of ICICI Bank laying-off employees as it goes about trimming the retail growth engine. To look out for new business opportunities, and consolidate existing ones. Current status: Kamath introduced many new businesses like life and nonlife insurance and also scaled up the asset management and private equity businesses.