How CEO Amitabh Chaudhry is leading the reincarnation of Axis Bank

Second, the bank’s focus on higher rated companies will not yield a higher yield or return. The challenge is to raise the bar in terms of disproportionate commission income and attract additional business customers. Wholesale banking share increased from 51% in FY19 to 44% in FY22. The bank admits that it is not very comfortable with the current prices. The corporate sector, full of funds, seeks the lowest interest rates. In addition, private sector competitors such as HDFC Bank and ICICI Bank are also upping their game. has an impact on the return on assets at the aggregate level,” Krishnan says. And you’ll see it not just in banking, but also in mutual funds, securities, and other non-banking businesses.

Third, the bank has taken bets on new high-return verticals like the mid-market and commercial banking group, which includes SMEs, unsecured loans, used cars, small business banking, etc. . But the scale is missing. It could also increase its share of unsecured loans, which are high yielding but risky given the current volatile environment.

The bank’s cost to income ratio of 48.83 is also high compared to HDFC Bank (41.04) and ICICI Bank (40.65). “We headed for a 2% cost for assets. We see enough growth opportunities. We do not want [costs] to prevent us from taking those opportunities, because it would be good for us in the long run to gain that market share,” says Chaudhry.

The surprises, however, could come from the bank’s acquisition strategy. “We have been clear that we will continue to seek acquisitions in the bank as well as in the subsidiaries, which allows us to skip a certain pace of growth, or to acquire a set of skills that we do not have. , or getting a certain customer together, which for us will take a long time to get,” Chaudhry says. When asked to describe the journey of transformation, he offers a car analogy. “We’re in a car, which went off the road a bit”, he begins. “We are in the process of completely overhauling the engine. We are adding features to the car to ensure that it is safe and never goes off the road , but at the same time increasing the speed of the car and changing the suction levels of people sitting in the car.

So how fast is the car currently going? “I have to continue to assure my team that they can run a lot faster,” he said. Call the glass half empty or half full, Chaudhry’s vision for the future of Axis Bank is as sharp as cut glass.