The question was raised by Anand Swaminathan, senior research analyst, BofA Securities, at ICICI Bank’s investor call on 18 October. Swaminathan pressed Bakhshi for details on his “intention to continue for another term”. ICICI’s group chief financial officer Anindya Banerjee responded that “there is still a year to go, and the board will take a view and decide and disclosure will be made at the appropriate time”.
“It really depends on whether Bakhshi wants to serve one more term as the CEO or not in our view…there could be personal considerations and aspirations at play here which 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 October.
On whether he enjoys the backing of the board and other stakeholders, Ganapathy said, “Bakhshi has full support for sure to be the CEO for another three years post October 2026 in our view”.
Under Reserve Bank of India regulations, private bank chiefs can be at the helm for up to 15 years or till they turn 70. Typically, bank boards are expected to inform their decision—to propose an extension to the incumbent or send fresh names—to the regulator six months before the incumbent’s term ends. While 65-year-old Bakhshi is eligible for another full term of three years, it boils down to what the board and RBI decide.
“As clarified during our analyst call on 18 October, the current term of our MD & CEO ends in October 2026. The ICICI Bank board will take a decision on this matter at the appropriate time,” a spokesperson for ICICI Bank said in response to emailed queries.
Before Bakhshi was brought in, ICICI Bank had to bid an unceremonious goodbye to its previous chief executive Chanda Kochhar over allegations that she had favoured the Videocon Group. In FY18, the bank’s bad loan book had swollen to nearly 9% of its loans, and its return on assets—an indicator of profitability—was languishing at 0.87%.
Cut to FY25, and dud assets are at 1.7% of total loans, and return on assets has strengthened to 2.4%. The broader banking sector has also been quite upbeat in the past few years, with gross non-performing assets (NPAs) shrinking to 2.3% in FY25 from the 9.6% peak in FY17, shows data from the RBI.
Most numbers seem stronger when compared to its closest rival, India’s largest private sector lender. HDFC Bank’s return on assets was 1.9% in FY25, while bad loans accounted for 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, executive director responsible for all the business functions of retail, small businesses and corporate banking, could be the frontrunner.
An alumnus 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 the group chief financial officer.
Although ICICI Bank is known in the industry to have created leaders who went on to helm several institutions, some are doubtful about the bank’s talent pipeline. According to a senior financial sector consultant, the bank, which created leaders under former chief executive and sector veteran KV Kamath, is falling behind the curve when it comes to creating a strong second rung.
“What Kamath did could not be replicated by his successors, and while we have seen some bankers from ICICI Bank still go out and lead other firms, they are yet to achieve the stature that the earlier leaders did,” said the consultant who did not wish to be named.
The ICICI Bank spokesperson said that the bank has a long-standing reputation for its depth of talent and nurturing leadership not only for the bank but across the financial sector. “Over its 70-year history, the institution has developed professionals who have gone on to lead several respected BFSI companies. As we remain focussed on nurturing capable professionals, we have a steady pipeline of talent for every role across the bank.”
Others see this as something plaguing the entire banking industry.
Abizer Diwanji, founder of strategic advisory provider Neostrat Advisors, said that succession planning or the lack of it is a broader banking system problem and not limited to any particular lender.
Diwanji said there are three reasons behind it. First, incumbents are insecure and do not want to create a second rung of leadership that will be able to replace them. Second, bank boards do not focus much on succession planning. Finally, there is a crunch of talent in the banking sector right now, with institutions failing to create leaders and groom them to take the top job.
Analysts praise Bakhshi but want the lender to continue delivering.
“Bakhshi’s performance has been very good, having been able to stabilize the bank and achieve one of the best return ratios historically,” said Asutosh Mishra, lead BFSI analyst and head of research, institutional equity, Ashika Stock Broking.
However, maintaining it could be a challenge. The banking sector is going through a period of margin compression, and competition is heating up as well. Mishra said that given the strong performance over the past five years, being able to sustain it will be a challenge.
Analysts at Bernstein have flagged slowing growth rates at ICICI Bank. In a note to clients on 24 October, they said that after several quarters of industry-leading performance, ICICI Bank’s growth engine appears to be losing steam.
“The bank has reported a sharp moderation in loan growth in recent quarters—without a 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 challenges, ICICI’s deceleration is less easily explained,” it said.
However, the market has shown faith in Bakhshi’s turnaround, rewarding it with better valuation multiples, pushing even his fiercest critics to back him. Per data from Macquarie Capital, ICICI Bank trades at three times its FY26 book value, whereas HDFC Bank is at 2.7 times.
“ICICI Bank is trading at a higher price to book earnings than HDFC Bank. That is a very big achievement. The stock market has recognised this achievement,” said Hemindra Hazari, an independent research analyst.
Hazari believes that the next chief executive should be an internal candidate since boards usually get an external candidate when things are going wrong. “When Bakhshi was appointed, I was not in favour of his candidature, but to my surprise, he has performed well. At the time, we wanted an external candidate because of the way the whole Chanda Kochhar episode was playing out.”
