Axis Bank's Arjun Chowdhury resigns; Gambhir elevated to executive director

Axis Bank, India’s third-largest private-sector lender, on Friday informed exchanges that Arjun Chowdhury, group executive overseeing affluent banking, cards, payments, and retail lending, has resigned to pursue an entrepreneurial opportunity. 

The bank said it has elevated Neeraj Gambhir, currently group executive in charge of treasury, markets, and wholesale banking products, to the position of whole-time director, designated as ‘executive director,’ effective from August 4. In his resignation letter, Chowdhury said, “…I have decided to pursue an entrepreneurial path outside Axis.” 

Axis Bank’s senior leadership has seen churn lately. In June last year, Sumit Bali, group executive overseeing retail ­lend­­­ing quit and joined Yes Bank. Gambhir’s appointment comes  just ahead of the impending retirement of the bank’s Deputy Managing Director Rajiv Anand this August. 

Chowdhury had joined Axis Bank post the acquisition of Citibank India’s consumer business on March 1, 2023. He was with Citibank for close to 30 years. Prior to the merger, he was country head (consumer bank) of Citibank India. Axis Bank had acquired Citibank’s consumer business for ₹11,603 crore. 

The bank said Gambhir’s had been appointed for a period of three years from the effective date of his appointment and is subject to approval of the shareholders of the bank and the Reserve Bank of India (RBI). 

Gambhir who joined the private sector lender in May 2020, was MD with Nomura India before Axis. Previously, he was MD with Lehman Brothers, India. Gambhir has also worked with ICICI Bank. 

The bank’s stock took a beating on Friday, with shares plummeting over 5 per cent on the BSE, after the bank reported weak earnings, due significantly higher slippages. 

 

The bank reported a 4 per cent year-on-year (Y-o-Y) decline in net profit to ₹5,806 crore for the April-June quarter of FY26 (Q1FY26), due to a significant rise in slippages. It reported fresh slippages of ₹8,200 crore, up 71 per cent YoY and sequentially in Q1FY26. 

“Credit cost at 140 bps in Q1FY26 (vs 70 bps in FY25) was driven by change in accounting policy towards NPA recognition for certain cash credit, overdraft, and one-time settlement accounts. This had an impact of 100 bps on slippages and 30 bps on credit costs,” said Macquarie Research in a report, adding that even after adjusting for this accounting change, credit costs of 110bps were well above those of private peers. 

The bank’s management highlighted that it expects no other policy change, and that current change is not driven by regulatory diktat. The bank’s loan and deposit growth was muted in Q1, raising concerns about the bank’s growth plans, going forward.

The lender’s loan book grew 8.1 per cent on year and 1.8 per cent sequentially, and its retail loans were flat sequentially.  Corporate grew at 5.5 per cent sequentially and SME loans were up 2 per cent. Deposits, on the other hand, grew 9.3 per cent Y-o-Y (down 1 per cent sequentially). It all resulted in an increase in credit-deposit ratio to 91.2 per cent. 

“Axis Bank targets loan growth 300bps higher than industry levels which appears to be a challenging task given current trends. Muted deposit growth, in comparison to private peers will also restrict loan growth,” said Motilal Oswal in a report, adding that the bank’s net interest margin (NIMs) is likely to remain under pressure once the impact of the remaining 75bps rate cut flows in Q3FY26.

“Sustained moderation in retail loan growth also could hamper NIMs, while higher credit costs imply downside risk to our return on assets (ROA) estimates”, the report said. 

“The discussion hereon will be centred on asset quality outcomes. It is difficult to ascertain the eventual impact but the direction and drift may improve hereon, movement of net slippages and credit cost, the single-most important factor in the near term to rebuild investor confidence and core performance (NIMs may see a higher impact in Q2), with Axis Bank’s ability to retrace and sustain that growth,” Elara Securities said in a note.