ICICI Bank Surges as CEO Kochhar Steps Down Amid Probe
ICICI Bank Surges as CEO Kochhar Steps Down Amid Probe
(Bloomberg) -- ICICI Bank Ltd. shares jumped after embattled Chief Executive Officer Chanda Kochhar stepped down, removing some of the uncertainty stemming from an investigation into her dealings.
Her resignation won’t affect the probe, the Mumbai-based lender told the stock exchange on Thursday. It named Chief Operating Officer Sandeep Bakhshi as her successor for a five-year term.
Kochhar had been on leave since June, when ICICI’s board appointed a panel to examine allegations against her, including claims of a “quid pro quo” in dealings with certain of the bank’s borrowers. Once considered among the most powerful women in Indian finance, she becomes the latest bank chief to lose her job this year as the nation’s regulator tightens vigilance over the sector.
ICICI shares rose 4.2 percent in Mumbai to 316.50 rupees.
“Investors are pleased as any overhang left from uncertainty on leadership is removed,” said Siddharth Purohit, a Mumbai-based analyst at SMC Global Securities Ltd. “Now the focus will shift back to the business, where the lender fares better than many peers.”
Bakhshi, formerly CEO of ICICI Prudential Life Insurance Co., became COO of ICICI Bank at the same time as Kochhar went on leave. Apart from the bank’s own investigation, the U.S. Securities and Exchange Commission is also querying the lender on its accounting and corporate governance practices, people familiar with the matter had said in July.
Meanwhile the Reserve Bank of India this month decided to end Rana Kapoor’s term as CEO of Yes Bank Ltd., and asked him to step down at the end of January. The RBI has also taken a tough line with other private-sector bank CEOs such as Axis Bank Ltd.’s head Shikha Sharma, who in April said she will step down at the end of 2018, more than two years before the proposed end of her term, after the central bank refused to extend her tenure.
The actions show just how far the RBI is preparing to go to root out a system-wide legacy of shoddy lending that’s resulted in one of the world’s highest bad-debt ratios. It’s also grappling to prevent any contagion from defaults at shadow bank Infrastructure Leasing & Financial Services Ltd., which the government seized control of in a surprise move Monday.
To contact the reporter on this story: Anto Antony in Mumbai at aantony1@bloomberg.net
To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Jeanette Rodrigues, Abhay Singh
©2018 Bloomberg L.P.