Master Navigator: Bank of the West's Nandita Bakhshi

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Nandita Bakhshi was 27 years old when she moved from her native India to Albany, N.Y. Her husband, Shiv, was coming to the States to get a Ph.D., and "I followed him, as what could be called a supportive wife," she said.

Bakhshi was a liberal arts graduate who initially thought she would become a schoolteacher — a job that she viewed as a respectable position for a woman in India. Now she found herself in an utterly foreign place, where she was not as constrained by cultural expectations.

Looking for a way to spend her time, Bakhshi took a job in 1986 as a part-time bank teller. "I felt, 'Why sit around? You might as well do some work,' " she said.

The branch, which was owned by Northeast Savings Bank, was in a shopping mall, and Bakhshi got assigned a 5 p.m. to 9:30 p.m. shift — the time slot that no one else wanted.

So began a remarkable career that has brought Bakhshi to the highest ranks of the U.S. banking industry.

Soon enough, she was no longer moving to accommodate her husband's career. Instead, he would eventually give up a tenure-track job at the University of Kentucky to live in the same city as his wife, who by then was a high-powered banking executive.

During a recent interview, Bakhshi beamed while talking about her husband, who is a telecom analyst, but also has worked as a journalist and acted in Indian films. "He's quite an interesting guy," she said.

In March 2016, the couple was out to dinner celebrating their 30th wedding anniversary when her phone rang. The call was to inform her that she'd been chosen as the next chief executive officer at Bank of the West. "It was very special," she said with a smile.

It was one of many memories that poured out of Bakhshi as she sat inside a Bank of the West wealth management office in Palo Alto, Calif. — about how she was raised in India, her training as a banker in various unglamorous locales across the United States, and the path she took to this conference room in the heart of Silicon Valley.

Ever since Bakhshi arrived in upstate New York, where the frigid winters bore no resemblance to the balmy climate of Calcutta, she has proven adept at navigating new situations. She worked for banks in six different states. She took a job with a payments technology company in Stuttgart, Germany, for a while. More recently, she shuttled between the Canadian headquarters of Toronto-Dominion Bank and the New Jersey base of its U.S. operations.

Bakhshi's ability to adapt and thrive amid change was a key reason she got hired to run Bank of the West. The $77 billion-asset bank is based in San Francisco, has branches in 19 states and is owned by the French global banking giant BNP Paribas.

"She knows how to operate in different geographies, because each geography has its own DNA. And that's the kind of leader that you want, leaders who can adapt to the local specificities," said Stefaan Decraene, the head of international retail banking at BNP Paribas.

"Put me in a new situation, I figure it out," Bakhshi said. "I figure out the culture first and then I figure out the workings of the organization and try to be successful."

Bakhshi's initial decision to work in banking was the product of happenstance. But she soon developed an ambition to ascend the ranks.

After her husband transferred his Ph.D. to Ohio State, Bakhshi was hired by Banc One Corp. in Columbus, as a salesperson in the branches. She rose to a regional manager position before being recruited in 1996 to join Home Savings of America in Irwindale, Calif.

Moving to Southern California was a risky decision. During her time in Columbus, Bakhshi had enrolled in business school at Ohio State, and she was just one course away from graduation when she was offered the job at Home Savings. An MBA would have been a useful credential, but instead she decided to put her education on hold.

"As you trace my career, you will see, I'm always a risk-taker," Bakhshi said.

One recurring theme in Bakhshi's career involves finding ways for banks to squeeze profits from new technology.

At Home Savings, she worked on how to persuade customers to start using debit cards at the cash register. During the late 1990s, consumers were mostly using debit cards to withdraw cash from ATMs, and financial institutions saw a big opportunity in the interchange fees that they received from in-store purchases.

In 1998, Bakhshi moved to what was then FleetBoston Financial Corp. As director of its deposit and payment product group, she looked for ways to drive more retail customers to ATMs, instead of teller windows that were more expensive to operate.

In an effort to make its ATMs more useful, Fleet began crediting customer accounts on the same day for ATM deposits that were made as late as 6 p.m., which likely appealed to those who were making deposits on their way home from work.

"When the customer used it and got credited and it was no longer a black hole, they were using it again and again," Bakhshi told American Banker in 2002.

Following a two-year stint with First Data in Germany, Bakhshi was hired in 2006 as executive vice president of payments at Washington Mutual. She stayed at the Seattle thrift company until 2008, when it failed and got absorbed by JPMorgan Chase.

Bakhshi is quick to point out that she had no involvement in WaMu's infamous mortgage business. At the same time, she speaks of WaMu's consumer bank in glowing terms.

"That's what I was involved in," she said. "And Washington Mutual had a very strong employee and customer culture."

Bakhshi joined TD Bank in June 2009 and held several positions there, including head of U.S. consumer banking.

Early in her tenure with TD, the Federal Reserve Board enacted rules requiring that consumers be offered the option of enrolling in overdraft programs, rather than their participation being automatic.

The new regulation threatened to cut into TD's overdraft fee revenue, and the bank responded by launching what Bakhshi once described as a "high-touch" campaign to communicate with its customers.

"When contacted — and I monitored a few calls myself — customers are expressing appreciation, and an overwhelming number are opting in for continued overdraft protection," Bakhshi said in 2010 during remarks to TD investors.

In the years since, TD has managed to continue to squeeze more money from overdraft fees than many of its big-bank peers.

During the first quarter of 2016, 35% of its noninterest income came from consumer overdraft charges, according to data from the Federal Deposit Insurance Corp. That was easily the highest percentage among banks with at least $50 billion in assets.

Since joining Bank of the West in April, Bakhshi has been on a listening tour, meeting groups of employees in roundtable settings from San Francisco to Omaha. By mid-July, she had met with about 15% of the bank's employees.

When asked about the feedback she has received, Bakhshi focused mostly on upbeat comments. "What I hear about is our passion and focus on the customer," she said. "That comes across loud and clear."

Bakhshi also has heard repeatedly that Bank of the West employees feel empowered to take action, in contrast with their peers at some of the nation's largest banks. "They feel that they can make a difference here. And this is what keeps them here," she said.

One area where the bank's employees see room for improvement is in a reliance on certain manual processes, according to Bakhshi.

"We're looking at improving our processes, and using more innovation and digitization to serve the customers, and take the cost down," she said.

Another challenge involves fee income. As of March 31, the ratio of noninterest income to assets at Bank of the West was 0.74%, which was well below the 1.56% average of banks with more than $10 billion in assets.

The relative dearth of fee income has been hurting profitability. Bank of the West's return on equity was 5.56% as of March 31, while all U.S. banks with more than $10 billion in assets averaged 8.25%.

Former CEO Michael Shepherd, who recently became chairman of BNP Paribas' U.S. holding company, flagged fee income as a challenge for Bank of the West during a recent interview.

Bakhshi said that her bigger concern at the moment is continuing to expand the bank's customer base.

"I would say that we're a growth bank," she said. "That gives us tremendous leverage for revenue. In addition, we're looking at other businesses that provide noninterest income. I wouldn't go to the fees right away.

"I don't think fees are a wrong thing, but I think it needs to be fair, comparable and transparent. And I wouldn't say my focus is on fees, but my focus is on growing the business, growing the customer base, which then leads to growth both in revenue and in income.

"So what we are going to do is continue to grow, and to have more customers come through this pipe," she said.

Bank of the West has a reputation as a conservative bank, and Bakhshi was asked whether she hopes to bring more of a risk-taking attitude to the bank.

"When I say I'm a risk-taker, I'm a smart risk-taker," she responded.

Bakhshi joins Bank of the West at a time when the cost of operating a foreign-owned bank in the United States has been rising.

BNP recently formed a new holding company to fulfill a requirement that large foreign banking organizations place virtually all of their U.S. subsidiaries beneath such an entity.

In June, BancWest Corp. took part for the first time in the Federal Reserve Board's annual stress tests. The company passed, but the exercise was costly.

Meanwhile, BNP is spinning off another U.S. unit, First Hawaiian Bank, in an initial public offering.

Decraene, who heads international retail banking at BNP Paribas, said that the French parent company is committed to the American market, despite the additional regulatory requirements.

"BNP Paribas is willing to pay this entry ticket," he said, adding that the heightened regulation is in no way confined to the United States.

Walter Mix, managing director at Berkeley Research Group, said that Bank of the West brings some attractive attributes to BNP. The San Francisco bank has been relatively stable, and has generated significant income for the parent company over the years.

"And obviously Europe is going through its own transitional period," Mix said, referring to ongoing questions about the health of the banking sector there.

Over the last several years, Shepherd led efforts to more closely integrate Bank of the West with other parts of BNPParibas. One goal has been to take better advantage of the company's global reach — whether the customer is a wealthy individual or a U.S. corporation that sells its products overseas.

Those integration efforts are roughly 75% to 80% complete, so it will fall to Bakhshi to finish the job, Decraene said.

He described Bank of the West's new CEO as a strong leader with charisma and good listening skills. Bakhshi won the job after a search that considered internal and external candidates.

"What I like is that Nandita knows a bank, and knows a bank from inside and from outside," Decraene said.

One evening in July, at the wealth management office in downtown Palo Alto, Bakhshi's distant past collided with her present.

The bank was hosting the U.S. opening of an art exhibit titled "Women Changing India," which features photographs of Indian women who are breaking down gender barriers in a variety of fields. The exhibit and a companion book include pictures of women in politics and the film industry, but also women who work as gas-pump attendants and security guards.

Bakhshi obviously has a close connection with the exhibit's subject matter, but she was not responsible for its creation. It was in the works long before Bakhshi joined Bank of the West, as part of plans to celebrate BNP's 100th year of operations in India.

"I cannot tell you what a wonderful coincidence this is for me," she said over the sound of a sitar being played nearby.

Bakhshi, who turned 58 in September, shared memories from her childhood in Calcutta and New Delhi, where her father was a member of Foreign Service, and she attended an all-girls school. Later, she recalled four months she spent in India following Washington Mutual's demise, when she did pro bono work for a microfinance organization.

"I go back every December for what I call my India fix, primarily to meet friends, meet family — and do some shopping," she told the small crowd gathered in Palo Alto.

Bakhshi went on to say that India has far fewer banks than the United States, but also more female bank CEOs.

"Let's talk about who's advanced here," she said, drawing a big laugh from the audience. □

'Put me in a new situation, I figure it out,' Bakhshi says. I figure out the culture first, and then I figure out the workings of the organization and try to be successful.'

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