19 Mar 2010, 0319 hrs IST,
MUMBAI: PJ Nayak, who transformed Axis Bank into
India’s fourth-largest by market capitalisation from
an also-ran bank in a decade, has been
hired as the chief executive of Morgan Stanley India to
hired as the chief executive of Morgan Stanley India to
boost its fortunes amid intensifying competition from
JPMorgan and BankofAmerica Merrill Lynch.The 63-year-old plain-speaking former bureaucrat will take
charge at the company in April with the mandate to grow
the investment banking, wealth management and securities trading businesses.
“It is almost like a start-up,” Mr Nayak said in an
exclusive interview with ET. “It is the nature of the
business which is different. It is a great learning curve you have to get on to.”
Morgan Stanley, which has slipped to the tenth position
during the first three months of 2010 in equity underwriting
according to Bloomberg data, from top in 2005, is stepping
up hiring and investing more capital to benefit from rising
advisory mandates and trading in the second fastest growing
major economy in the world. After deciding to sell out of a
joint venture in China recently, Morgan now
considers India a ‘global priority’ and it aims to get
back to the top in India again.
To achieve the goal, Mr Nayak could well be the right
candidate given his track record in partly cleaning up the
mess in the erstwhile Unit Trust of India as an executive
trustee and building UTI Bank, now known as Axis Bank.
The bank now has an enviable retail franchise and strong
businesses that generate sustained fee income. Mr Nayak
not only has the reputation of building a strong bank,
but was known for inculcating a value system which stressed
medium-term goals—when rivals were looking at quarterly
numbers—and put risk above market share.But a vital ingredient in accomplishing that was his plainspeak,
which many managements may be averse to. He had taken on the
regulator on the issue of splitting the position of the chairman and
managing director in banks.
Also, he did not flinch from expressing
his unhappiness at his own board at Axis Bank when it overlooked
internal candidates to appoint Shikha Sharma from the rival ICICI Group.
He then quit the bank he built, and did not mince words.
“I felt strongly that people who built the bank should have the first
claim to leadership,” Mr Nayak told ET in an interview last April.
“When it was not accepted, I felt it was best to make a statement
saying I disagree. While it does not benefit me in any way,
it does make a statement.”
Does Morgan know what it is getting into with Mr Nayak?
An outspoken attitude is a “highly desirable characteristic” at
Morgan, said Owen D Thomas, managing director and CEO
at Morgan Stanley.
Apart from his leadership qualities, the
respect he commands among the business community and policy
makers will bring in “significant benefits” to Morgan.
Morgan Stanley is looking to take on JPMorgan Chase
which has thrived under former ICICI Bank executive
Kalpana Morparia as businesses revive and government
mandates open up because of share sales in state-run companies.
JPMorgan has been leading in merger advisory and fund-raisings
by Indian companies.
BankofAmerica Merrill Lynch, which lost
people when the merger was underway last year, is also
beefing up its leadership.
It recently poached JPMorgan’s
Kaku Nakhate as chief executive and also a team
from JPMorgan along with her.
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