Axis Bank aims for higher share of retail, overseas biz

Axis Bank Ltd, India's third-largest private sector lender, aims to increase the share of its retail advances to a quarter of the advance from less than a fifth. The bank also planned to raise the share of its overseas business by a third in the next couple of years, the new deputy managing director S K Chakrabarti, said in Mumbai.

The bank, which has 1,095 branches and 58 specialised retail assets centres that give loans for purchase of homes and automobiles and lend against securities to individuals, plans to open up to 250 more branches in the year to March 2011, Chakrabarti told Business Standard. Typically, retail loans fetch banks higher margins.

"We aim to increase our exposure to auto loans, credit cards and personal loans," said Chakrabarti.

Of the bank's Rs 21,000-crore retail loans, more than two-thirds are allocated to fund home purchases. The bank, which has 13 million retail customers, plans to expand its reach to the Tier-II and Tier-III towns and may hire 2,000 new employees this year.

The bank also plans to raise the number of its automatic teller machines (ATMs) by another 1,000 in the year to March. Axis Bank, like other banks, uses independent deployers to manage its 4,800 ATMs.

After the State Bank of India, the lender has the largest number of account holders from the armed forces — a little more than 400,000. Such accounts help the bank maintain its 40 per cent lower cost current account and savings accounts (Casa).

To strengthen its overseas presence, the bank plans to open a subsidiary in London and upgrade its representative office in Shanghai to a branch. It already has branches in Singapore, Hong Kong and Dubai International Financial Centre.

About 14 per cent of the bank's asset book is from international operations. "We should look for 20 per cent in a couple of years, as Indian companies grow their overseas footprint and increase acquisitions," said the deputy managing director, who has been with the bank since September 1994.

While about half of Axis Bank's loans are used for funding large companies, the lender expects a faster growth in demand for credit from rural business and retail small and medium enterprises. It aims to grow loans by 25 per cent in the year to March.

"The current quarter will give us an indication of the trend in credit demand," he said, referring to the busy season that typically begins in October and also the increased in demand for loans during the festivals of Dusshera and Diwali.