ICICI Bank Shares Jump After Report Suggests Top Management Rejig

ICICI Bank shares jumped more than 4 per cent on Monday, after a report suggested that the board of the private sector bank was mulling reshuffling the top management. ICICI Bank shares opened nearly 1 per cent higher at Rs 284.95 on stock exchange BSE on Monday, and rose to hit an intraday high of Rs 293.90 during the session. ICICI Bank shares closed 3.6 per cent higher at Rs 292.50 on the bourse. BSE or Bombay Stock Exchange has sought clarification from ICICI Bank, one of the largest private sector lenders in the country, on the report. A reply is awaited from ICICI Bank.

The ICICI Bank group is discussing a reshuffle of its top management that may see its life insurance venture's CEO Sandeep Bakhshi becoming interim chief at ICICI Bank, the Economic Times reported citing people familiar with the matter.

Mr Bakhshi currently serves as managing director and CEO of ICICI Prudential Life Insurance.

The report comes amid allegations over conflict of interest in loans made to Videocon, a consumer electronics and oil and gas exploration company, which is alleged to have been favoured by the bank's MD and CEO Chanda Kochhar.

"With an independent commission of inquiry under Justice Srikrishna being appointed by the ICICI Bank board, the big question is what will be the impact. While the current CEO, Chanda Kochhar is already on leave currently, there is talk that the ICICI Board meet on June 18 may appoint Mr. Sandeep Bakhshi as the interim CEO of the Bank. If the 3% upmove in ICICI Bank shares on Monday was any indication, then the markets have reacted positively to the news", said Jaikishan Parmar, Senior Equity Research Analyst, Angel Broking.

"The stock has been one of the major under-performers among the private banks due to concerns over asset quality. The corporate governance issues have only added to this under-performance... The risk-reward definitely appears to favor the stock. Of course, a lot will still depend on how the corporate governance issues and the asset quality issues are handled going ahead," he added.

ICICI Bank had earlier this month said Chanda Kochhar was on a planned annual leave and denied a media report that she was asked to go on leave until an independent board enquiry was concluded.

In March this year, the bank had rebutted charges of nepotism and said the board had "full confidence and reposes full faith" in Ms Kochhar.

Ms Kochhar began her career with the erstwhile ICICI Limited in 1984 and was elevated to the board of directors of ICICI Bank in 2001. She served as the joint managing director and chief financial officer from 2007 to 2009, and was elevated to be the managing director and CEO in 2009. She has been responsible for the bank's diverse operations in India and overseas since then, according to the bank's website.