An 18-hour day and hands-on approach are critical to the growth of her bank, she says
By her own admission, Kaku Nakhate is not the “networking type” and rarely goes out for lunches or dinners. Instead, she prefers to have a quick roti-sabzi in her corner office at the Bank of America (BankAm) headquarters in Mumbai’s Nariman Point, write Shyamal Majumdar and Somasroy Chakraborty.
Isn’t networking a way of life for ace deal makers-cum-bankers like her, we ask as we settle down at a table at the Belvedere Club in the Oberoi Hotel. But the 45-year-old president and country head of BankAm is ready with an answer: it’s not the frequency but the content that matters to clients. In any case, her daily work schedule hardly leaves her enough time to attend networking dos. She begins her day at six in the morning, finishes Asia business calls by eight before heading to the office where she stays till midnight almost every day.
That busy schedule may please her bosses, but it has also led to whispers in the corridors about her being too hands-on manager. We expect a strong rebuttal, but Nakhate is far from being apologetic about her approach.
“First, I have to put in long hours to understand new businesses. Second, I have focused my energy on building the bank and a hands-on approach is necessary when you are working through a lot of changes. With the current global regulatory environment, it is important to give directions to your people to encompass change,” she says, taking a long sip of her watermelon juice.
We are not sure what her colleagues feel about the hands-on approach, but BankAm is surely not complaining. Despite lacking experience as a commercial banker, Nakhate has been reasonably successful in leading the foreign bank’s operations in India. In the one year and seven months since she joined, the balance sheet has expanded nearly three times; the investment banking division has bagged marquee deals (she dismisses our suggestion that it has slid somewhat in the investment bank league tables); and the bank has emerged as one of the prominent players in corporate finance despite the uncertain macroeconomic environment.
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In 2011, BankAm extended trade finance to Indian Oil and Hindustan Petroleum, was the sole book-runner in Petronas’ stake sale in Cairn India, advised GMR on divestment of a 50 per cent stake in InterGen, managed Tata Steel’s refinancing of senior debt facilities and overseas bond issuances by Canara Bank and the Indian Railway Finance Corporation. The bank also offered escrow and foreign exchange services for the Cricket World Cup last year and is venturing into new areas. For instance, it did a leasing deal for an oil rig in Singapore from India.
“We want to build the institution brick by brick, end to end and provide universal banking services to consumers. We want to enhance risk parameters, increase product penetration and offer a lot more in the large corporate space. It could be simple things like an e-commerce platform or a cash management system,” she says
Nakhate is in full flow but the waiter interrupts to take our orders. She orders roti-sabzi, brushing aside her colleague’s suggestion that she should be careful about choosing the menu since the Lunch with BS columns also talk about the food that is ordered. “I am what I am,” Nakhate says, but changes her mind to settle for pasta. We order Thai chicken green curry and steamed rice.
One of the reasons she has been able to sustain this almost 18-hour-a-day work routine is the support system she has and her mother-in-law played a critical role in it. “I completely submitted myself to her and accepted that she was the boss of the house. You have to make some compromises here and there. But what’s the big deal — if I can make some adjustments for my clients, why can’t I do it for my mother-in-law?” she says with a laugh, adding that she is a “very different person at home”.
Belonging to a traditional Kutchi family, she considers herself fortunate to have parents who have encouraged her to be independent. “Most Kutchi women were not even allowed to go out and work, leave alone choose a career that demands working till the wee hours,” she says. Perhaps being the only child helped. Her father spotted her aptitude for finance early and encouraged her to take up a profession of her choice.
We steer the conversation back to the bank, and Nakhate says despite the growth in business, BankAm is in no hurry to launch retail banking operations in India. It currently operates through five branches and has not sought the Reserve Bank of India’s permission for opening new branches. Reason: the cost involved in setting up a retail presence is high and the bank is currently focused on strengthening its wholesale banking operations.
The model will continue to be dominated by fee-based businesses, though the revenue mix has started changing in favour of fund-based businesses. The business that the bank calls global capital markets is clearly the biggest contributor to its profits because of its global strengths. What she has done in her relatively brief stint so far is getting the processes and the transaction business right, growing the corporate bank and becoming meaningful to clients for whom she really cares. “You can only grow by X amount, so what we have done is focus on that category of clients that were important to us — which is some of the top 150 local companies and multinational corporations,” Nakhate says.
Despite the popular perception of inflation and interest rate cycle having peaked, Nakhate feels that even if there is an interest rate cut, it will be temporary. “You cannot ignore inflation. Commodities are not on our side. Even now if there is an interest rate dip, it will be short lived,” she says.
The point to note, she says, is that the cost push is increasing in India. “Take a manufacturing company and compare it with the situation 10 years ago. We have 15 per cent compounded cost growth. Though consumption has not declined significantly, inflation is worrying since there are no policy decisions being taken. Even if they come, the high cost push will not allow many industries to think in terms of setting up new projects because the capex itself will lead to a higher cost push.
The lunch is over and we order tea since she still has some more time before her next meeting. Banking was not on her mind after she completed management studies from the Narsee Monjee Institute of Management Studies in 1988. She was curious about the stock market as a child, dabbling with her father’s investment portfolio. Her first brush with the stock markets as an equity research analyst with DSP wasn’t a pleasant experience since it was very much a “man’s world”. Domestic financial institutions, especially, were in no mood to take advice from a woman, but that obviously didn’t deter her. She rose to head the equity capital markets team in DSP Merrill Lynch (the new entity after DSP merged with Merrill Lynch). When BankAm acquired Merrill Lynch’s global operations in 2009, Nakhate was part of the team that ensured smooth transition. But as soon as the integration process was over, Nakhate moved to JP Morgan as head of equity businesses in India only to return to BankAm eight months later.
As we walk towards the lobby, Nakhate gives all the credit for her success in what was a man’s world to DSP’s founder and former ace investment banker Hemendra Kothari, who hand-held her all through. “We had a lot of power to do what we wanted. He was there to help us when things went wrong but never breathed down our necks. He, however, made it clear that we should not compromise on our values,” Nakhate says.
That’s precisely what she has been trying to inculcate in her only child, a Class 12 student, who is now preparing to go abroad to pursue higher studies in science — something Nakhate terms one of the biggest transitions in her life. “These days, my son is advising me on how to cope with life after he leaves for the US,” the doting mother says. We are indeed convinced by the BankAm boss’ earlier assertion that she is a completely different person at home.
