Federal Bank in advanced stage of sending names of CEO candidates to RBI

Kerala-based Federal Bank is in an advanced stage of sending the names of potential candidates for the post of managing director and chief executive officer, according to CEO Shyam Srinivasan, whose term ends on 22 September. 

“There is a bank board established search panel and they have a slew of candidates to choose from,” said Srinivasan at a post-results press conference. "It could be internal or external. They are in advanced stages of submitting names to RBI and then the regulatory process kicks in.”

Federal Bank had started the process of succession planning in January, after the Reserve Bank of India (RBI) turned down its request to give Srinivasan a one-year extension and instead asked the bank to recommend the names of at least two executives for appointment. 

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Some media reports said that K.V.S. Manian, who recently resigned as the joint MD of Kotak Mahindra Bank, may join Federal Bank as its MD & CEO. In his resignation letter, Manian said that he will pursue other opportunities in the financial services sector, which fuelled speculation about him joining Federal Bank.  

Federal Bank shares hit 52-week high

Federal Bank shares hit a 52-week high on Thursday, rising by nearly 5% to reach ₹170.25 apiece. 

Among the other candidates to be considered for the CEO's role are its two executive directors Shalini Warrier and Harsh Dugar.

The private sector lender reported flat fourth quarter earnings owing to higher operating expense. Net profit stood at ₹906 crore at the end of the March quarter as against ₹903 crore during the corresponding period a year ago.  

Net interest income or core income, however, rose 15% year on year to ₹2,195 crore at the end of the March quarter as against ₹1,909 crore during the corresponding period a year ago.

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Operating expense rose 41% year-on-year to ₹1,838.6 crore at the end of the March quarter. Employee costs rose 48% year-on-year to ₹886.8 crore and other opex rose 34% year-on-year to ₹951.7 crore.