Axis Bank may hire Egon Zehnder to find new CEO after Shikha Sharma

Axis Bank is likely to appoint global executive search firm Egon Zehnder to find a successor to its managing director and chief executive officer Shikha Sharma, who will step down at the end of the year, sources close to the development told FE.

“The board is likely to consider both external candidates as well as senior officials from within the bank. Egon Zehnder is expected to manage the succession,” a source said on condition of anonymity.

An email sent to Axis Bank remained unanswered till the time of going to press.

Egon Zehnder is a global executive search firm, and according to information on their website, it has advised clients for more than 50 years on chief executive leadership succession, recruitment and professional development all across the world.

On Monday, Axis Bank’s board of directors accepted Sharma’s request to shorten her tenure to December 31, 2018. In December last year, the board had re-appointed Sharma as the MD & CEO of the bank for a period of three years from June 1, 2018.

Given that they are the most senior executives at the bank, executive director (retail banking) Rajiv Anand and chief financial officer Jairam Sridharan are likely to be considered for the top post, one of the sources quoted above said.

Rajiv Anand has over 25 years of experience in the financial services industry, and his portfolio at Axis Bank includes retail liabilities, retail lending and payments, branch banking, retail operations, digital banking, marketing and retail products, according to information on the bank’s website. He joined Axis Bank from its asset management arm, Axis Asset Management, where he held the position of Managing Director & CEO.

Jairam Sridharan is in charge of finance, strategy and business intelligence functions. He has nearly two decades of experience in the banking and financial services industry. He joined Axis Bank in June 2010 from Capital One Financial, a consumer bank based in the US.

Sharma’s request to seek shortening of her tenure comes at a time when the RBI has reportedly asked the bank’s board to reconsider its decision to extend her tenure by three years. Agencies reported, citing people in the know, that the RBI had written a letter to the chairman of Axis Bank, Sanjiv Misra, who is also a former expenditure secretary, with regard to the board’s decision to reappoint Sharma.

They added that the bank’s board has been asked to reconsider the decision to give a fourth three-year term to Sharma as managing director and CEO citing, among other things, the bank’s performance and deteriorating asset quality over the years.Sharma, who took over the reins of the bank from its outgoing chief PJ Nayak in 2009, has seen Axis Bank’s gross bad loans move from Rs 898 crore in the March quarter of 2008-09 to Rs 21,280 crore in the March quarter of FY17. Axis Bank’s net advances grew from Rs 81,557 crore to Rs 3.73 lakh crore during the same period.

Meanwhile in October last year, Axis Bank had to reclassify nine standard assets as non-performing assets (NPAs) after the RBI asked them to be reclassified as part of its annual review process. Axis Bank had said that as on June 30, 2017, these nine accounts were classified as standard assets across most consortium banks, with only about 6% of the total outstanding of these accounts being classified as NPAs across the sector. As on September 31, 2017, the fund-based outstanding of these nine accounts, Axis Bank had said, was `4,867 crore, all of which now stands as NPA, it said.