The suspense over who will run the country?s second largest commercial bank is finally over. The bank?s board, which met on Friday, has appointed Chanda D Kochhar, 47, as the bank?s managing director & chief executive officer from May 2009. Kochhar has been given a five-year term, till March, 31, 2014.
Kochhar will replace KV Kamath, 62, who will, in turn, replace N Vaghul as the non-executive chairman of ICICI Bank from May.
In an exclusive interview with FE after she was named as the successor to Kamath, Kochhar said, ?For the last one year, I have been exposed to all aspects of ICICI Bank?s operations, which would help me to build the bank further. Managing the recent situation has given me enough strength. I am sure I will get all the support of the organisation and my colleagues to take the bank forward. Kamath is there for the next six months to guide me. I have all the advantages of being a home-grown person.?
Speaking about the immediate challenges, she said the bank is quite stable and wouldn?t need any restructuring.
?I just have to make a few appointments which fall vacant after I become CEO,?? she said.
The bank wouldn?t have any kind of higher targets for now and would keep its future plans dynamic to adjust with the emerging situation.
Speaking to the media at the sidelines of the conference, Kochhar said that the bank will remain committed to the SME, corporate and the home loan sections.
?We are looking at total loan growth of 5-10% by March 2009. However, we expect loan growth to be definitely better next year,? said Kochhar, adding that the bank will continue to grow its deposit base, distribution network and customer service.
On the interest rate scenario, she said it is clearly headed southwards.
?We?ll soon see deposit and lending rates coming down. In fact, we have seen bulk deposit rates falling by 2% in the last two weeks,? she noted.
?There are enough signals for the interest rate to fall. However, it?s premature to predict the fall of interest rate after a year,? she said.
Talking about the cost of funds, Kochhar said the cost, though has started coming down, is still high.
?The cost of funds has started coming down for banks, but is still high. Interest rates on wholesale deposits have started to ease. This is a ray of hope for banks. We will constantly keep an eye on the cost of funds and profitability for our bank,? she noted.
Kochhar made clear that it is very crucial for every organisation to keep a watch on the environment all the time. ?One needs to take quick and different steps to tackle this environment. It is very important for banks to retain their capital and liquidity,? she said.
Kochhar said this is the best time for banks to see a good business opportunity in treasury business.
?Our focus is on the fixed income category in the treasury business,? she said, adding that the bank?s main source of funds is deposits.
Talking about the bad loans in the banking system, Kochhar said there is no large impact on the credit quality of companies. However, unsecured portfolios and small-ticket loans like personal loans and credit cards are seeing some increase in bad loans.
Meanwhile, ICICI Bank has received 600 branch licences from the Reserve Bank of India.
?Our focus on deposits will stay. We will optimise our distribution network. We will keep expanding our branch network. We would have to see how CASA changes over a period of time. Currently, our CASA stands at 27%,? she noted.
Talking about the bank?s international operations, Kochhar said the branches will continue to raise retail deposits in most geographies.
Meanwhile, there are talks that Vishakha Mulye or NS Kanan may be appointed as the joint MD & CFO in place of Kochhar.
Mulye is the executive director of ICICI Lombard while Kanan is the executive director of ICICI Prudential Life Insurance.
