Shikha Sharma | The liberal banker

There are two reasons why Shikha Sharma, managing director and chief executive officer (CEO) of Axis Bank Ltd, India’s third largest private lender, considers this the toughest stint in her 34-year-old career. First, though she spent 29 years with the ICICI group in diverse roles—from setting up its investment banking arm to running consumer lending and personal services units as well as its insurance company for close to a decade—she was not a seasoned commercial banker before she joined Axis Bank. She has just completed five years in the current role.

Second, there was nobody to handhold her there in the initial days. Her predecessor P.J. Nayak had left in a huff when she was chosen to lead the bank (Nayak may have preferred an internal candidate to succeed him). “It was like taking over a flying aircraft. You are suddenly asked to sit on the pilot’s seat mid-air,” Sharma says.

She orders Chilean sea bass and stir-fried vegetables at San-Qi, the Asian restaurant at Four Seasons, Worli, Mumbai, while I settle for a set thali of green Thai curry.

Sharma, 56, is on a diet. “These days I am into swimming but more than a hobby, it’s a real struggle,” she says with a smile. She is a Hindi film buff, and watches movies on weekends. At one point in time, inspired by her mother-in-law, who was a Hindustani classical singer, she even learnt classical music, intending to introduce her own son and daughter to it. But now her primary personal goal is to lose weight under the supervision of nutritionist and fitness consultant Suman Agarwal.

Her bank, however, has been growing bigger. The balance sheet is spreading even at a healthy pace and the stock price is at its lifetime high.

After taking over in June 2009, she formulated the “Vision 2015” document and has reached most of the milestones she set for the bank. The suite of products has broadened; the retail business has grown to create a balance with the corporate business; and systems and processes have been institutionalized. “It’s always difficult when you take over a healthy, well-run franchise as you can end up spoiling it. While you are setting up a new venture you can do things the way you want, but here you have to build on the existing strength, which is what I have been doing,” she says, explaining her role as the CEO.

A predominantly corporate bank since inception in 1994, Axis Bank now has about 36% retail assets and Sharma wants to push it up to about 45%. The growth of its low-cost current and savings account, or CASA, has been the strongest among the top 10 banks in India, and it has been topping the list in debt syndication for years.

Now, the bank is formulating its “Vision 2020” document. The three main constituents of the vision are growing CASA, maintaining the growth in return on equity (18.2% now) and profitably reaching out to 5% of India’s bankable population (currently its reach is restricted to 1.5%). “We have a customer-oriented culture and we will continue to emphasize on that by filling in customer-facing technology gaps,” Sharma says. She doesn’t want to expand overseas; the bank’s overseas presence is required only to meet domestic clients’ offshore needs, not to local business there.

So how is Axis Bank different from ICICI Bank Ltd? “Unlike ICICI Bank which had migrated from a project finance institution to banking, Axis was born as a bank and so it has more banking depth,” she says. According to Sharma, ICICI Bank has a flatter structure and a very competitive environment, while Axis Bank is hierarchical and friendly. “And, of course, Axis Bank has fewer women executives (there is no woman in the next three tiers after Sharma),” she adds. After she took over, Sharma has tried to change the company’s work culture by rewarding employees on performance and not seniority, and encouraging different points of view. “The boss is not always right, you can have a different point of view,” she says.

This liberal approach is perhaps a result of her upbringing. The eldest child of a brigadier in the ordnance corps, who was an ammunition expert and fought in two India-Pakistan wars, Sharma studied at seven schools in different parts of the country. At all their homes, empty shells were used as flower vases. At Loreto Convent School in New Delhi, she was passionate about physics but her tauji (uncle) convinced her to study economics, considered to have better professional prospects, at the Lady Shri Ram College For Women. She says she ended up at the Indian Institute of Management, Ahmedabad (IIM-A), under peer pressure.

In the 1978 batch of 180 students at IIM-A, there were five women. At the interview, she met Sanjay—a tall, dark and handsome man, straight out of a Mills & Boon romance (incidentally, Sharma was addicted to Mills & Boon romances till her mid-40s). It was love at first sight. “I found in him someone who was well-read and had novel ideas.”

In the summer of 1980, she was picked up by ICICI Ltd, as it was known then. She worked there for 29 years. K.V. Kamath, the current chairman, and Mark Tucker, the former group CEO of Prudential Plc. and now CEO of AIA Group Ltd, mentored her in the ICICI group. “Both of them were tough, hard taskmasters and always gave feedback.” In 2009, Egon Zehnder headhunted her for Axis Bank’s top post.

The rivalry between Sharma and Chanda Kochhar, the current MD and CEO of ICICI Bank, was once the talk of the business world, and many believe Sharma left ICICI because Kochhar got the top job, which she too coveted. I can’t resist the temptation of asking her about the rivalry. She brushes it aside, saying: “We were not friends but had healthy respect for each other. Now, after leaving ICICI, we spend more time together as both of us are on the Visa Global Advisory Council and the board of IBA (Indian Banks Association).”

Sharma’s journey at Axis Bank has had its share of hurdles. The bank’s net non-performing assets are only 0.40%, but many analysts apprehend it has more bad loans hidden in its cupboard. Sharma refutes the allegation of “hiding”, saying Te Institute of Chartered Accountants of India (ICAI) mhas awarded the bank for excellence in financial reporting for three years. She admits, however, that the analysts have a “legitimate worry” because of Axis Bank’s relatively high exposure to infrastructure projects, about 12% of total loans.

She believes the worst is over—growth has bottomed out, interest rates have peaked—and hopes that with the government’s push, stalled projects will start moving.

The bank’s acquisition of Enam Securities Pvt. Ltd, an investment banking firm, is not among the high points of her stint. The day the deal was announced in November 2010, the bank’s stock lost 5% on bourses as the analyst community felt it had paid too much. Two years later, the deal was closed, after paring the valuation of the transaction by almost one-third, to Rs.1,396 crore.

Sharma defends her decision to acquire Enam, saying it filled a strategic gap for the bank, but admits that it hasn’t been able to extract the full value of the deal till now. She says, however, that she has no regrets, for this will happen over the next 10 years. Did she pay more than she should have? She sidesteps the question, saying, “Maybe we should have negotiated hard.”

There’s a romanticism in the way Sharma looks at life and her career. She describes with almost childlike enthusiasm her recent visit to a leopard park near Udaipur in Rajasthan that opened in October—she saw four leopards.

“I believe in making the most of the day; I don’t think of the past or the future,” she says, adding that she is not a prisoner of data. “I always balance data with intuition while taking decisions. I could be impulsive while buying a home but not when I am doing business.”

Beneath the romantic is a shrewd banker who senses every business opportunity passing her way. During our lunch, I casually mentioned I was in need of an auto loan. The next day I got a call from a gentleman from the bank’s retail division to ask how much money I needed, and whether he could drop by to see me.