BUSINESS LEADER OF THE YEAR

Business Leader CHANDA KOCHHAR
Banking’s Iron Lady Held Her Ground, Stretched the Limits
THE AWARD SEEKS TO honour a leader who has clearly demonstrated a strategic direction for success, and pursued a vision
Exactly three years ago, ICICI Bank was battling baseless and malicious rumours about its financial strength. Depositors in a few pockets in the country were lining up to pull their money out of the bank. ICICI Bank successfully quelled those rumours and less than three months later, announced that Chanda Kochhar would succeed Kundapur Vaman Kamath in May 2009. It was a tough time to take over. But it was a tough woman who was taking over. Three years have gone by and Kochhar, 49, has led the bank back to its familiar place of dominance. Credit for ICICI Bank’s revival goes to scores of its top executives, but it would not have happened but for the chief executive herself. “We had chalked out a strategy two years ago to consolidate the balance sheet of the bank and thereafter resume growth,” Kochhar told ET. “And last year, the challenge was that it was a year where we were resuming growth while retaining the benefits of consolidation. The second big challenge last year was integration of Bank of Rajasthan with ICICI Bank in terms of technology and manpower,” she added. Consolidation resulted in the country’s largest private bank garnering low-cost deposits and reducing its overall cost. During her tenure at the helm, CASA, or the share of low-cost deposits, rose from 28.7% in March 2009 to 45% in March 2011, and in the same period, provision cost to total loans came down from 2% to 0.8%. Going forward, she told ET, the challenge would be to get back to the growth path with a sustainable and profitable model. “We will now get back to growth in full gear, but this would be done without sacrificing the benefits of consolidation,” Kochhar said. She was also quick to give credit to her colleagues who have helped the bank through difficult times. It has 60,000 employees and over 2,500 branches. Kochhar, who was one of the key architects of the bank’s aggressive expansion before 2008, is candid in admitting errors of the past — including some excesses in retail lending, which she earlier set up and managed. “In times like these, you have to conserve capital, you have to maintain liquidity and you have to contain risk,” she said, about six-eight months ago. Between 2001 and 2006, when she headed retail banking, ICICI Bank grew at its fastest pace. Loans to retail customers surged more than 30-fold. If she was bold as head of retail banking, she is wise as its CEO. In two years after she took over, unsecured retail loans portfolio is down from 10% to 3% of total loan book and share of wholesale deposits is down to 50% from 60% reflecting her agility in doing what the bank needs the most rather than sticking to her past beliefs. "Consolidation does call for some not so pleasant and not so popular decisions," she had said in the past. This achievement did not come easily. She not only faced challenges in the market, but also from within. She weathered the storm when many of her colleagues, who worked closely with her, quit the bank. But it did not deter her and the courage with which she handled those tumultuous days is helping her reap the benefits. “When an organisation grows at 35-40 per annum for 10 years and adds 10 new businesses during that period, young professionals get the kind of exposure they would not have got anywhere else. We have groomed people to build and run businesses like insurance, securities and retail. So, if other players are looking to grow who would they pick? The best person would be someone who has already run the business,” Kochhar had said earlier. Kochhar began her career with ICICI Bank soon after she completed her MBA from Jamnalal Bajaj Institute. She is among the youngest CEOs in commercial banking. She is known to be a movie and music buff.
(ET 5OCT11)