Axis Bank

Axis Bank

Type Public (BSE: 532215)

Banking
Industry
Financial services
Founded 1994
Headquarters Mumbai, India
Adarsh Kishore
(Chairman)
Key people
Shikha Sharma
(MD & CEO)
Investment Banking
Commercial Banking
Retail Banking
Products Private Banking
Asset Management
Mortgages
Credit Cards
▲ 13,745.04 crore
Revenue
(US$3.12 billion)(2009)
▲ 1,812.93 crore
Net income
(US$411.54 million)(2009)
Employees 13,389 (2010)[1]
Website Axisbank.com

Axis Bank, formerly UTI Bank, is a financial services firm that had begun operations in
1994, after the Government of India allowed new private banks to be established. The
Bank was promoted jointly by the Administrator of the Specified Undertaking of the Unit
Trust of India (UTI-I), Life Insurance Corporation of India (LIC), General Insurance
Corporation Ltd., National Insurance Company Ltd., The New India Assurance
Company, The Oriental Insurance Corporation and United India Insurance Company
UTI-I holds a special position in the Indian capital markets and has promoted many
leading financial institutions in the country. The bank changed its name to Axis Bank in
April 2007 to avoid confusion with other unrelated entities with similar name.[2] After the
Retirement of Mr. P. J. Nayak, Shikha Sharma was named as the bank's managing
director and CEO on 20 April 2009.[3]

As on the year ended 31 March 2009 the Bank had a total income of 13,745.04 crore
(US$3.12 billion) and a net profit of 1,812.93 crore (US$411.54 million).

On 24 February 2010, Axis Bank announced the launch of 'AXIS CALL & PAY on
atom', a unique mobile payments solution using Axis Bank debit cards. Axis Bank is the
first bank in the country to provide a secure debit card-based payment service over IVR.[4]

Branch Network

AXIS Bank

At the end of October 2009, The Bank has a very wide network of more than 1000
branches and Extension Counters (as on 31 March 2010).The Bank has a
network of over 4055 ATMs (as on 31 March 2010). The Bank has loans now (as of
June 2007) account for as much as 70 per cent of the bank’s total loan book of Rs
2,00,000 crore. For HDFC Bank, retail assets are around 57 per cent (Rs 28,000
crore) of the total loans as of March 2007.

In the case of Axis Bank, retail loans have declined from 30 per cent of the total loan
book of Rs 25,800 crore in June 2006 to around 23 per cent of loan book of Rs.41,280
crore (as of June 2007). Even over a longer period, while the overall asset growth for
Axis Bank has been quite high and has matched that of the other banks, retail exposures
grew at a slower pace.
If the sharp decline in the retail asset book in the past year in the case of Axis Bank is
part of a deliberate business strategy, this could have significant implications (not
necessarily negative) for the overall future profitability of the business.

Despite the slower growth of the retail book over a period of time and the outright decline
seen in the past year, the bank’s fundamentals are quite resilient. With the high level of
mid-corporate and wholesale corporate lending the bank has been doing, one would have
expected the net interest margins to have been under greater pressure. The bank, though,
appears to have insulated such pressures. Interest margins, while they have declined from
the 3.15 per cent seen in 2003-04, are still hovering close to the 3 per cent mark. (The
comparable margins for ICICI Bank and HDFC Bank are around 2.60 per cent and 4 per
cent respectively. The margins for ICICI Bank are lower despite its much larger share of
the higher margin retail business, since funding costs also are higher).

Risk and earnings perspective

From a medium-term perspective, it appears that Axis Bank could be charting out a glitch
for itself in the private bank space. It appears to be following a business strategy quite
different from the high-volume and commodity-style approach of ICICI Bank and HDFC
Bank. That strategy also has its pluses in terms of the higher margins in some segments
of the retail business and the in-built credit risk diversification (and mitigation) achieved
through a widely dispersed retail credit portfolio.

Service and Charges

Axis Bank does not have liaisons with any bank in the UK, making it much harder to
obtain services when travelling abroad. The bank also charges a fee to enable SMS alerts
and charges a fee for transactions abroad. If you are looking at making frequent travels or
obtaining a SMS alert service you could definitely explore better options, especially one
of the multi-national banks, which could get your charges reduced while providing a
better service.

AxisRemit Online
This is a convenient and secure portal for NRIs to remit money to India, generally
required for family maintenance of their relatives. It is a growing revenue stream for the
bank, with more and more NRIs registering to avail of the highly competitive exchange
rates and convenient online facility.
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