Anand Swaminathan, lead research analyst, BofA Securities, raised this question on an ICICI Bank investor call on 18 October. Swaminathan pressed Bakhshi for details of his “intention to continue for the next term”. ICICI Group CFO Anindya Banerjee responded that “there is still a year left and the board will take a position and decide and it will be announced at the appropriate time.”
“It really depends on whether Bakhshi wants to serve another term as CEO or not, in our view … there may be personal considerations and aspirations at play that we are not aware of,” Suresh Ganapathy, managing director, head of financial services research at Macquarie Capital, said in an email to clients on 23.
On whether he enjoys the support of the board and other stakeholders, Ganapathy said, “Bakhshi has full support in our view to be CEO for another three years beyond October 2026”.
According to Reserve Bank of India regulations, heads of private banks can be at the helm for up to 15 years or up to 70 years. Bank boards are usually expected to inform the regulator of their decision – whether to propose an extension of the existing authority or to send in new names – six months before the end of the incumbent’s term. While the 65-year-old Bakhshi is eligible for another full term of three years, it depends on what the board and the RBI decide.
“As clarified during our call with analysts on October 18, the current tenure of our MD & CEO ends in October 2026. ICICI Bank’s board will take a decision on the matter at the appropriate time,” an ICICI Bank spokesperson said in response to emailed queries.
Before Bakhshi was brought in, ICICI Bank had to unceremoniously part ways with its previous CEO Chanda Kochhar over allegations that she favored the Videocon Group. In FY18, the bank’s bad loan book swelled to nearly 9% of its loans and its return on assets — a measure of profitability — fell to 0.87%.
After reducing to FY25 and dud assets are at 1.7% of total loans and return on assets strengthened to 2.4%. The broader banking sector has also been relatively bullish over the past few years, with gross non-performing assets (NPAs) declining to 2.3% in FY25 from a peak of 9.6% in FY2017, RBI data shows.
Most of the numbers appear stronger compared to its nearest rival, India’s largest private sector lender. HDFC Bank’s return on assets was 1.9% in FY25, while bad loans were 1.3% of total loans.
According to Ganapathy, the board’s priority will be an internal candidate in case Bakhshi decides to step down. He pointed out that Rakesh Jha, managing director responsible for all business functions of retail, small business and corporate banking, could be the frontrunner.
A graduate of the Indian Institute of Management, Lucknow and the Indian Institute of Technology, Delhi, Jha has been with ICICI since 1996. Prior to his current role, Jha was Group CFO.
While ICICI Bank is known in the industry for producing leaders who have gone on to lead several institutions, some question the bank’s talent pool. The bank, which created leaders under former CEO and sector veteran KV Kamath, is lagging behind in building a strong second line, according to a senior financial sector consultant.
“What Kamath did could not be replicated by his successors, and while we have seen some ICICI Bank bankers still leaving to head other firms, they have not yet reached the level of earlier leaders,” said a consultant who did not wish to be named.
An ICICI Bank spokesperson said the bank has a long-standing reputation for deep talent and nurturing leadership not just for the bank but across the financial sector. “During its 70-year history, the institution has developed professionals who have become leaders of several respected BFSI companies. As we continue to focus on nurturing capable professionals, we have a steady flow of talent for every role across the bank.”
Others see it as something that plagues the entire banking industry.
Abizer Diwanji, founder of strategic advisory provider Neostrat Advisors, said succession planning, or the lack of it, is a broader problem in the banking system and not limited to a particular lender.
Diwanji said there are three reasons behind this. First, existing companies are insecure and do not want to create a second line of management that will be able to replace them. Second, bank boards do not focus much on succession planning. Finally, there is now a talent crisis in the banking sector where institutions are failing to create leaders and prepare them to take the top job.
Analysts praise Bakhshi but want the lender to continue to deliver.
“Bakhshi’s performance has been very good as he has been able to stabilize the bank and achieve one of the best returns ever,” said Asutosh Mishra, BFSI Senior Analyst and Head of Research, Institutional Equity, Ashika Stock Broking.
However, maintaining it can be a problem. The banking sector is going through a period of margin compression and competition is heating up. Mishra said that given the strong performance over the past five years, sustaining it will be a challenge.
Analysts at Bernstein noted a slowdown in growth at ICICI Bank. In a note to clients on October 24, they said that after several quarters of top performance, ICICI Bank’s growth engine appears to be running out of steam.
“The bank has reported a sharp moderation in loan growth in recent quarters – with no clear underlying cause, it said. Unlike peers such as HDFC Bank and Axis Bank, whose slower growth can be attributed to specific balance sheet or asset quality issues, ICICI’s slowdown is harder to explain,” the bank said.
But the market showed faith in Bakhshi’s turnaround, rewarding him with better valuation multiples, prompting even his fiercest critics to back him. According to Macquarie Capital data, ICICI Bank is trading at three times its FY26 book value, while HDFC Bank is trading at 2.7 times.
“ICICI Bank is trading at a premium to book earnings than HDFC Bank. This is a very big achievement. The stock market has recognized this achievement,” said Hemindra Hazari, an independent research analyst.
Hazari believes the next CEO should be an internal candidate, as boards usually bring in an external candidate when things are not going well. “When Bakhshi was appointed, I was not in favor of his candidature, but to my surprise he did well. At that time, we wanted an external candidate because of the way the whole Chanda Kochhar episode was unfolding.”
