When Sandeep Bakhshi took over as the MD & CEO at ICICI Bank in late 2018, the private sector lender’s reputation had taken a severe beating. Employee morale had sunk following an inglorious exit by the previous incumbent amid allegations of bad corporate governance practices. Investors feared it could take years to fix the problems.
But they had underestimated the extremely low-profile Bakhshi’s leadership skills. The ICICI veteran (he joined in 1986 when ICICI was just a development financial institution) worked quietly, and with great resolve, rallying the team behind him. After fixing the systems and processes across functions and departments, he galvanised the team into action and together they strategised for the future.
The CEO’s biggest contribution to ICICI Bank, according to insiders, has been his democratic style — bank insiders say it is now run though a collaborative effort and decision-making has been de-centralised. This change in the work culture has boosted both employee morale and productivity. Within a year of his taking over, the bank’s numbers were looking decidedly better. But it was in FY21 that the lender proved its mettle.
Net profits at Rs 16,193 crore were a near fourfold increase over the Rs 3,363 crore posted in the year to March 2019. And it wasn’t just the impact of smaller provisions. The performance came on the back of a smart 13.7% increase in net loans with retail loans clocking a growth of 17.5%. All this despite it being a very difficult time due to the onset of the pandemic. The lender scored well on every parameter — net non-performing loans (NPLs) at the end of FY21 were down to just 1.2% from 2.3% at the end of FY19.
The return on assets jumped to 1.4% from 0.4% in FY19, while the return on equity climbed to 12.3 from 3.4 in FY19. The better underwriting practices that Bakhshi brought in had helped. Analysts noted the lender had reaped the benefits of a more cautious approach to lending. They appreciated the return to the basics of banking that Bakhshi brought in — lend but assess risk carefully and don’t fritter away precious capital.
Under Bakhshi, the balance sheet became stronger with a higher provision coverage ratio. The Street was delighted with how the liability franchise strengthened as deposits hit Rs 9.3 trillion, up from Rs 6.5 trillion in March 2019. By March, 2021, ICICI Bank’s market capitalisation crossed Rs 4 trillion from just Rs 2.2 trillion in October 2018.
The reclusive Bakhshi doesn’t want any of the credit; he’s happy to be away from the limelight, wearing his success lightly. Of the few media quotes that Bakhshi has been credited with, this one sums up the man the best: “Every day I believe that I am in ICICI because I need ICICI. ICICI can get 100 Sandeep Bakhshis, but for me there is nothing better than ICICI”. That’s the quintessential organisation man.