Rakesh Jhunjhunwala pulled up Federal Bank CEO and MD for the bank’s performance and business growth while comparing it to peers doing well in retail fee growth.
ICICI Bank Chief Executive Officer and Managing Director Chanda Kochhar was not the only one facing tough questions from the media the past week.
While Kochhar was chided more for her silence regarding nepotism charges levelled against her involving loans given to Videocon Group, Federal Bank CEO and MD Shyam Srinivasan was critically “blessed” by Rakesh Jhunjhunwala, the big bull investor who owns 1.79 percent in the Kerala-based bank.
During the bank’s analyst call, Jhunjhunwala expressed displeasure on the bank’s performance and business growth while comparing it to its peers who are focusing on retail fee income growth.
The week began with ICICI Bank's profits dipping to half from the year-ago period to a two-year low due to substantial surge in non-performing assets (NPAs) to the tune of Rs 15,737 crore. Its gross NPAs worsened to 8.84 percent of total loans from 7.82 percent in the December quarter.
On the Videocon-loan controversy, Kochhar continued to maintain that she has nothing more to add than what ICICI bank’s board has said. She evaded questions on whether her tenure would be cut short before it ends in March 2019.
There was no mention of the controversy even at ICICI Bank's board meeting, a day after the financial results.
On the other hand, the government, which has kept itself at bay from the controversy despite having a nominee on board, has not attended the past two board meetings. The government said that it is a minority shareholder in ICICI bank and can be overridden by the board, hence its nominee will prefer to abstain from participating until investigations are on.
HDFC Bank rolls out succession planning
Meanwhile, ICICI Bank’s rival HDFC Bank announced its plan to set the ball rolling for appointing a successor to its leader and founding CEO Aditya Puri.
Puri, who joined the bank in 1992, will see his tenure end on October 31, 2020 (at the age of 69).
During the week, both private and public sector banks continued to tread on a fiery path given the rise in bad loans that are squeezing profits in the last quarter of FY18.
Apart from ICICI Bank and Federal Bank, state-owned lender Canara Bank posted financial results and suffered a loss of Rs 4,860 crore during the quarter. This is the second-highest loss posted by any lender after Punjab National Bank (PNB), since the bad loan clean-up exercise started in 2015.
For UCO Bank, it was the 10th quarterly loss in a row, weighed down by sharp deterioration in asset quality, which is one-fourth (24.64 percent) of its total loans.Also Read: Vijaya Bank will grow quarterly net profit to Rs 1,000 cr by FY19-end, says CEO