Amitabh Chaudhry took the reins as MD & CEO of Axis Bank, India’s third-largest private sector bank, on January, 1, 2019, at a time when the bank was going through a tough time, especially in terms of perception. Five years later, with key numbers improving and with crucial acquisitions, the bank’s fortunes have turned around significantly. Chaudhry tells Sachin Kumar and Joydeep Ghosh that while the current focus is on consummating the Citi deal, the bank is also open to acquisition opportunities at right valuations. Excerpts.
What are some of the challenges you faced when you took over at the bank?
Some of the key legacy challenges were asset quality, good quality growth and legacy tech systems. And we have overcome our legacy challenges. The task of cleaning up and strengthening the balance sheet was the first challenge. This involved completely changing the credit culture, moving to more prudent and rule-based provisioning and conservative accounting policies. We also successfully raised substantial amounts of capital. To achieve good quality growth, we articulated our strategy in a cogent manner, using the simple abbreviation ‘GPS’: growth, profitability & sustainability. We defined what we as a bank wanted to achieve in the medium term under each of these prerogatives and businesses and functions also built plans under the same umbrella.
On independent channel checks, you will get feedback that our cloud adoption is among the best among peer banks, our mobile banking application is the world’s highest-rated application on Google Playstore. Moreover, most part of the initial leg was accomplished in the backdrop of a once-in-a-century pandemic that challenged the fundamentals of the way we conducted our business.
Do you see the need for more acquisitions to strengthen the bank’s portfolio and market presence?
We are always on the lookout for meaningful growth opportunities. However, right now we are in the process of consummating the Citibank consumer banking deal. Our first part of the project has been successful, but we have another important date (LD2) coming up in 2024. Our focus right now is on making this deal successful and reap the synergy benefits out of it. If appropriate opportunities at compelling valuations are available for our subsidiaries to scale up, we will evaluate.
Do you have aspirations to become the second-largest or even the largest private bank in India?
My wish has always been to take the bank ahead of our competitors. The first step is that we should become No. 1 and No. 2 in some businesses on an incremental market share basis, and that is clearly the case in many of our priority areas. Also, not just business, we want to be No. 1 in terms of consumer satisfaction, respect, digital prowess etc. We are guided by our own GPS strategy, and we are working on building ‘an all-weather institution’ that will stand the test of time.
How do you see the impact of technology on Axis Bank and its customers? What are the plans to adapt to and leverage these disruptions ?
Technology has become imperative for businesses today, in how we function and deliver our products and services to our customers. The pandemic has changed consumer behaviour considerably and the need for access to resilient and reliable digital services is growing by the day. Our digital initiative Axis 2.0 marks a significant leap in technology and business, propelling us toward our goal of becoming a digital-lending powerhouse. As a truly digital bank, Axis 2.0 transforms the customer journey across savings, loans, payments, forex, and investments.
Our API-driven transaction banking platform continues to gain traction, witnessing a 2.3x increase in corporate customer onboarding and a 5x surge in transaction volumes. Additionally, NEO for Business, our mobile-first banking solution for MSMEs, has attracted 5,000 businesses monthly, boasting standout features compared to competitors. ‘Open by Axis Bank’ reflects our commitment to innovation. We aim to triple or quadruple the contribution of Open by Axis Bank by FY27.
Given the prevalent challenge of attrition in private banks, what strategies do you intend to implement to tackle this issue?
Attrition is a challenge which all BFSI players are grappling with for the last three-four years, especially at a time when banks and other financial services organisations are expanding at a fast rate. Our experience shows that 60-70% of the talent moves within the banking ecosystem. Some organisations are taking to campus-plus strategies to build their own pool of bankers, rather than hiring from each other. Some others are trying to look at talent internally and train them, however the fact remains that with expansion, hiring of people is at an all-time high.
We have chalked out strategies to see how we can reduce the attrition rate. We have built a compelling proposition around internal careers that we are calling ‘Thrive’. We endeavour to complement the above with structured engagement of top management with our employees. These include quarterly webcasts, town hall meetings, besides travelling nationwide to meet teams on a regular basis.