The board of India’s third largest lender Axis Bank has started the search for another MD and CEO to succeed Shikha Sharma who may step down from her position once her term ends next year, two individuals aware with the development said. The board has hired executive search firm Egon Zehnder to discover Sharma’s successor whose term closes in June 2018.
In an emailed response Axis Bank denied change at the corner office asserting it was premature.
“According to RBI approvals, the present term of Mrs. Shikha Sharma is till 30th June 2018.
There is a set down process which the board undertakes at regular intervals but to conclude that there will be change of leadership is completely premature and speculative,” an Axis Bank representative said in an email statement.
Sharma who took charge in 2009 is into her third term. When her first term ended the board did not go through this procedure.
In a prior meeting to ET, Sharma had said that the decision on her term extension would be taken by the bank’s board. “That is a decision the board needs to take and my job as the CEO is to ensure that there is alignment on the long term goals of the bank and guarantee that we have execution capabilities to deliver that,” she had said.
Among major banks, Axis has delivered the second-best returns after HDFC Bank since 2009, the year Sharma moved into the corner office.
The bank has delivered 410% returns, compared with the Nifty Bank index’s 308% in the period, as indicated by the ETIG database. For State Bank of India, this stands at 105% and for ICICI Bank BSE 0.08 %, 206%
But the bank has been under pressure after announcing poor income in consecutive quarters. Additionally, some branches of the bank was under income-tax lens for violatuons amid demonetisation.
In the last one year, Sharma has been criticised for the bank’s deteriorating asset quality and falling profits.
The bank had announced a 43% decrease in net profit at Rs 1225 crore in the March quarter from a year prior as the private sector lender had raised provisions for bad loans.
Gross non-performing resources had risen 3.98% to Rs21,280.48 crore toward the finish of the March quarter from Rs20,466.82 crore in the December quarter. On a year-on-year premise, it dramatically multiplied from Rs 6,087.51 crore.
The banks net non-performing assets remained at Rs 1,318 crore at the end of March 2010. Moreover, the bank that had detailed profits of about Rs 2,515 crore at the end of FY10 saw it plunge to Rs 579 crore in the quarter ended December after several growth years since 2010.