Axis Bank

COMPANYREPORTFORAUTUMNS

AcadGroup03
ASHIMA GUPTA, DIVYA CHAWLA,KASHMIRA KAKWANI,SHRAY KHURANA,SWATI
GUPTA

Contents
1.Axis Bank:An
Overview......................................................................................................................2
2.BusinessOverview...................................................................................................................
...........5
3.FinancialPerformanceandPeerComparison..........................................................................
...........7
4.Axis
Bankinthenewsinthepast6months...............................................................................
....... 10
5.Culture......................................................................................................................................
........11
6.Outlook,Opportunities,
Improvementareas....................................................................................13
7.LastYearAutumnsPlacement..................................................................................................
........14

1.AxisBank:An Overview
Axis Bank is the third largest private sector bank in India. Axis Bankofers
the
entire
spectrumoffinancial
servicestocustomersegmentscoveringLargeand
Mid-Corporates,
MSME,AgricultureandRetailBusinesses.
TheBankhasalargefootprintof2,589domesticbranches(includingextension
counters)
and12,355ATMsspreadacrossthecountryason31stMarch2015.TheBankalso
hasoverseas

oficesinSingapore,HongKong,Shanghai,Colombo,DubaiandAbuDhabi.
AxisBankisoneofthefirstnewgenerationprivatesectorbankstohavebegunoper
ationsin
1994. TheBankwaspromoted in 1993,jointlybySpecified Undertakingof
UnitTrustof
India
(SUUTI)(then
knownasUnitTrustofIndia),LifeInsuranceCorporationofIndia(LIC),
General
InsuranceCorporationofIndia(GIC),
NationalInsuranceCompanyLtd.,
TheNewIndia
AssuranceCompanyLtd.,
TheOriental
InsuranceCompanyLtd.andUnitedIndia
Insurance
CompanyLtd.TheshareholdingofUnit
TrustofIndiawassubsequentlytransferred to SUUTI, an entityestablished
in2003.Thebelowfigure summarizesthecurrent shareholdingpattern ofAxis
Bank.
With a balance sheet size ofRs.4,61,932croresason31st March2015,Axis
Bank has achievedconsistentgrowth and stableassetqualitywith a5 year

CAGR(2010-14)of21%in
inTotalDeposits,23%inTotalAdvancesand28%inNet Profit.

TotalAssets,19%

ShikhaSharma,isthecurrentMDand CEOofAxisBank.V Srinivasan,Sanjeev

Kumar
Guptaand
RajivAnandheadtheCorporateBanking,CorporateCentreandRetail
Bankingdivisions
respectively.TheBankhaseightwhollyownedsubsidiariesnamelyAxisC a p i t a l
Ltd,Axis
Pr i v a t e
Equity
Ltd.,AxisTrusteeServicesLtd,AxisAssetManagementCompanyLtd,Axis
MutualFundTrustee Ltd, Axis Bank UK Ltd, Axis Securities Ltd, Axis Finance
Ltd.
History
AxisBankbegan
itsoperationsin1994,after
theGovernmentof
Indiaallowednew
private
bankstobe
established.TheBank
waspromotedin1993jointlybytheAdministratorofthe UnitTrustofIndia(UTI-I),
LifeInsuranceCorporationofIndia(LIC), General Insurance CorporationLtd.,
NationalInsuranceCompanyLtd.,
TheNewIndiaAssuranceCompany,
The
Oriental InsuranceCorporationandUnitedIndiaInsuranceCompany.TheBank
wassetup withacapitalofRs.115 crore, withUTIcontributingRs.100 crore, LICRs.7.5 croreandGIC andits foursubsidiariescontributingRs. 1.5croreeach.
On July30, 2007UTIbankrechristeneditselfasAXISBank.Theyhad to giveup
theUTIname
afterusingitfor13
yearsbecausetheywere
notpreparedto
accepttermsandconditionsof
UTIAMC.ThebankwasallowedtouseUTIbrandnameforfreetillJanuary31,200
8 beyond whichithad topayroyaltytoUTIAssetManagementfor usingitsname.
Thenew
name
waschosen
consideringbanksIndia-widepresence.The
bankran a massive rebrandingcampaignwhichcost themRs. 50crore.
Company
Overview:
MarketCapitalizationRs1,26,974crore (28th April,15)
StandaloneNetInterestIncomeRs14,224.14crore (FY15)
NetProfit-Rs7,359crores (FY15)
(Increased by 18.4%drivenby net growthin interest income)
Gross NPAs asa percentageofgross advanceshasincreasedfrom1.22% to1.34%.
NetNPAs asa percentageofnetadvancesrose4 bps at 0.44% from0.40% in FY14.

InabsolutetermsGross NPAs andNetNPAs both haverisenby 10%

The bank has high exposure to infrastructure projects, power generation

companies, housing finance companies, NBFCs, agriculture, personal loans
and industry (small, medium and Large)
The GDRs issued by the Bank are listed on the London Stock Exchange (LSE)

2. Business Overview The bank business is divided into these segments:

Retail Banking: The savings bank deposits grew at a rate of 15% YOY to
reach `79,953 crores as on 31st December 2014. The Bank has also
maintained its approach in increasing the proportion of Retail Term Deposits

which grew at the rate of 24%. Likewise ,the Bank continued to focus on
increasing its share of retail loans in total advances. CASA and Retail Term
Deposits constituted 78% of Total Deposits as on 31st December 2014
compared to 74% last year . At the end of 31st December 2014, it had a
network of 2,558 domestic branches and extension counters and 12,874 ATMs
situated in 1,708 centres. Retail Fee Income grew 30% YOY and constitutes
38% of Total Fee Income
Corporate Banking/Business Banking: Under this division ,it provides
Normal Current Account and Trust accounts. It also provides services like
Private equity ,Mergers & Acquisitions, Advisory services, Capital Market
funding and E-broking .There is a strong franchise across liability and asset
businesses. It is a dominant player in syndication of debt and loans .
Corporate credit grew 23% YOY and stood at `1,26,184 crores and accounted
for 45% of net advances. SME advances (excluding non-retail agriculture
segment) grew by 15% YOY and stood at `40,651 crores

Treasury: The Bank has an integrated Treasury ,which covers both domestic
and global markets and funds the balance sheet across geographies. It plays
an important role in the sovereign debt markets and participates in primary
auctions of RBI.
The foreign exchange and money market group under Treasury is an active
participant in the
inter-bank/financial institutions space.It also maintains proprietary
positions to generate trading income for theBank.
An active Balance Sheet Management group within Treasury takes care of
asset-liability
mismatches and interest rate sensitivities of the Banks portfolio.
The interest rates and derivatives group provides derivative solutions to
customers for its balance sheet and currency exposures.
TheGlobal FinancialInstitutionsDivision(GFID)group
inTreasuryisresponsibleforfostering businessrelationshipswith financial
institutionsacross geographiesand undertakesforeign currencyfundraising.

Apart from this the bank is also into insurance ,investment banking, mortgage
financing,
credit
cards,
and
depositoryservicesandagriculture.TheBankalsosupportstheweakersectionsofsocietyt
hrough its lending to Micro Finance Institutions(MFIs).To improve credit delivery to
the target customers through smart use of technology, the Bank in the current year
has started Axis Sahyog, a social collateral lending initiative where in economically
active weaker section individuals are provided with micro loans for agriculture and
microenterprises.
Itisalsoregisteredonthefollowing
exchanges:
OTCEI
BSE
NSE
LondonStockExchange
Geographicalpre
sence:
One of the largest ATM networks in the private sector:12,355ATMS as on31stMarch2015
AxisBanknowhasaforeignnetworkofivebranchesatShanghai,
Singapore,
HongKong,DIFC-Dubaiand
Colombo(SriLanka),andtworepresentativeofficesatDubaiandAbuDhabi and an
overseas subsidiary at London, UK.

3. FinancialPerformanceandPeerComparison
1. NetRevenueand NetIncome:
Ax
ofRs
ro

isBankreportedRevenues
.445,655.7MnforFY15(upf
mRs.385,022.1MnForFY1
4
)

whic
e

hincludedIncomefromInv
stmentsofRs.

91,454.2Mn(vs. Rs.83610.7MnforFY14).
PATforFY15wasRs. 74,484.8Mn,comparedtoRs. 63,091.7forFY 14.
1,000,000
800,000

AxisBank
HDFC

SBI

200,00
0

ICICI

AxisBank

SBI

ICICI

HDFC

150,00
0

600,000
400,000

100,00
0

200,000

50,00
0
2009

2010
2011
2012
2013

2009
2010
2011
2012
2013

NetRevenue(inRs.
Mn.)

NetIncome(inRs.
Mn.)

2. DepositsandAdvances:
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000

AxisBan
k
SBI
ICICI
HDFC

2009

2010

2011

2012

TotalDeposits(inRs.Mn.)

2013

12,000,000

10,000,000
8,000,000
6,000,000

AxisBan
k
SBI
ICICI
HDFC
2009
2013

4,000,000
2,000,000

2010

2011

TotalAdvances(inRs.
Mn.)

3. Margins:
Overtheyears,AxisBank has consistentlyreportedsuperioroperating
andnetincomemargins overitspeersintheIndianbanking
sector.Thisisdrivenbythreereasons:
Lower provisionsagainstbadloans
Highernetinterestincome
Robustfeeincome

2012

35.00
30.00
25.00
20.00
15.00
10.00
5.00
-

AxisBank

SBI
HDFC

ICICI

100.0
0

AxisBank

SBI
HDFC

ICICI

80.0
0
60.0
0
40.0
0
FY 2009 FY 2010 FY 2011 FY 2012
FY2013

20.0
0

NetIncomeMarg
in

FY 2009 FY 2010 FY2011 FY 2012

FY2013
OperatingMarg
in

4. Returnmeasures:
30.00

AxisBank

25.00

SBI
HDFC

ICICI

20.00
15.00
10.00
5.00
FY2009 FY2010 FY2011 FY2012
FY2013
Returnon
CommonEquity

3.5
0
3.0
0
2.5
0
2.0
0
1.5
0
1.0
0
0.5
0
-

AxisBank

SBI
HDFC

ICICI

FY2009 FY2010 FY2011 FY2012

FY2013
Returnon
Assets

Net
Net
Total
Total
Net Income
Rs Cr
revenue
Income
deposits
advances
margin
ROE ROA
2014
154903.7 10891.1 1394408.5 1209828.7
SEBI
2
7
1
2
7.03% 9.20 0.65
13.4
ICICI
54606.02 9810.48 331913.66 338702.65
17.97%
0 1.74
19.5
HDFC
49055.17 8478.38 367337.48 303000.27
17.28%
0 2.00
18.2
Axis
38502.21 6310.12 280541.07 232381.73
16.39%
0 1.78
Net
Rs Cr
revenue
2015

Net
Income

SEBI
ICICI

61267.27

HDFC
Axis

57466.25
43843.60

11175.3
5
10215.9
2
7357.82

5. Otherkey metrics:Ashima

AxisBank
SBI
ICICI
HDFC

AxisBank
SBI
ICICI
HDFC

NetInterestMarg
in% 2010
2009
2012
2013
2.87
3.05
3.09
2.48
2.35
3.06
2.15
2.70
4.69

2.19
4.13

NetNPARati
o % 2010
2009
2012
2013
0.40
0.40
0.36
1.79
1.72
2.10
2.09
0.77
0.63

2.12
0.31

2011
3.1

3.04

2.86
2.34
4.22

3.38
2.40
4.19

2011
0.29

0.27

1.63
1.11
0.19

1.82
0.73
0.18

AxisBank
SBI
ICICI
HDFC

AxisBank
SBI
ICICI
HDFC

48.40%

AxisBank
SBI
ICICI
HDFC

Costof
Funds%
2009
2010
2012
2013
5.74
4.03
5.62
5.72
5.14
5.72
4.55
6.92

4.18
4.66

ProfitperEmployee(R
2009 s.Mn) 2010
2012
2013
1.00
1.20
1.50
0.47
0.45
0.65
1.10
1.40
0.42

0.90
0.60

CASARat
io
2012
2013
41.54%
44.38%
46.64%
46.50%
43.50%
47.4%

2011
4.1

5.29

4.67
3.59
4.64

5.35
4.32
6.06

2011
1.40

1.40

0.39
1.00
0.74

0.53
1.10
0.80

4.
AxisBankinthenewsinthepast6months
1)
Suvidhaa
Prepaid
Card:Axis
Bank,
in
partnership
with
SuvidhaaInfoserve, announced the launch of Axis Bank- Suvidhaa Prepaid
Card, on April 20, 2015, a first of its kind initiative in the Banking Industry,
which leverages the e-KYC platform for INSTANT onboarding, cash deposit
and withdrawal for the customer. Under the Axis Bank Suvidhaa program,
the customer gets an Axis Bank Prepaid Card issued instantly at any
Suvidhaa Business Correspondent (BC) outlet, through the AadhaareKYC
platform. This allows the customer to load funds into the card immediately
at the BC outlet; the card then can be used at any POS terminal, ATM or BC
outlet anywhere in the country and also can remit money to any other
domestic bank account through the BC network.
2) Axis Bank signed MoU with the Indian Army to ofer Power Salute salary
account. Its a unique salary account designed exclusively for defence
Personnel. The exclusive ofers include Family Banking facility for family
members of the Personnel with bundled Online PPF account and a
concessional loan rates ofering of up to 200 bps, available at more than
2500 Axis Bank branches at over 1700 locations. The ofering also includes
account number portability & a state of the art mobile banking service,
crafted to the needs of travelling defence personnel.
3) Axis Bank revised its Base Rate from 10.15% p.a. to 9.95% p.a. with efect
from April 13, 2015. Accordingly, the efective rate applicable to various
fund based credit limits which are linked to the Banks Base Rate will reduce
by 20 basis points.
4)

Axis Bank launched free Wi Fi service across 128 branches. It plans to

extend the service to over 1000 branches going forward.

5) The bank opened its first All women Branch in Patna, Bihar in December,
2014. Women play an important role in managing household savings and

the bank believes that this all Women Branch will help increase the
participation of this segment in the banking industry.

5.Cultur
e
TheGood
(Collectedfrom
website,reviewsfromemployees)
1.
2.
3.
4.
5.
6.

OpenCulture,Transparency
GrowthOpportunities
Great team camaraderie,supportivestaff
Performancebased rewards
PersonalImpact
CommitmenttoSociety

TheB
ad
1. Timings,longhours
2. HardTaskmaster
Quoting
from
BusinessTodaysSurvey
BestPlacesto Workfor:

of

Itisa
marketsavvyprivatesectorbankwithayouthfulimage :theaverageageofits37,901
employeesis29years.RajeshDahiya,
President,HumanResource,Axisbanksaysmanaginga
youngworkforcerequiresan
attitudechangeandunderstanding
fromleaders."It'sachallenge
andanopportunity.
Youhavetoalsoempowerthem,"headds.
Withsomanyyoungpeopleonitsrolls,
thebankisgoingthatextramiletounderstand them andengagewith them.Ithas
setupaninternalsocial
networkingsystemcalledJAM,
which
alreadyhas5,000peoplehooked.Oneseniorbankofficial,
P.Mukherjee,headofLarge
CorporateandInternational
Banking,
hasbeenusingJAMtoholdfocuseddiscussionson
businesswithhisproductteams.Peopledon'tjusttalkwork,
butalso
postmoviereviewsor writeaboutcricket onthesite.
The bank's young and open culture is evident when you walk into
its
headquarters
in
Mumbai.
Thenewbuildinghasanauditorium,agymnasiumwithyoga andaerobics,
alibrary,
breakout
zones,trainingrooms,in-house

doctorsandrestingrooms."Theworkplacemeansa
lot,"
saysDahiyaof
theneweight-floor
headquarterswherethebankshiftedinJanuary2011.
"Communication hasbecomemuch easier".
Thegroundfloor
auditoriumtoobuzzeswithactivity.Eminentcorporateleadersareoften
invitedtodeliverguestlectures,
whichhelp
theyouthbrigade
broadenitshorizons.Recent
guestshaveincludedN.Chandrasekaran,
ManagingDirector
and
CEOofTCS;AdityaGhosh,
PresidentandExecutiveDirector,IndiGoAirlines;andKirthigaReddy,Head,Facebo
okIndiaNot

surprisingly,thebankismanagingitsattritionratewell."Weareninepercentina
world where20-plusis anorm,"says Dahiya.
OneofthebiggestattractionsatIndia'sthird-largestprivatesector
bankin
termsofassetsisits
emphasisoncreatingandnurturingleaders.Thepurposeof
developingsenior
leadersisto
ensuresuccessionplanning."Wehaveidentifiedthetop500people
fromManagingDirector to vicepresidents," saysDahiya."Eachof thesepeople
shouldbetrained to takeon their bosses' rolesat somepointoftime,"headds
Thebankmaintainsa male tofemaleratioof 3:1 and encourages
womentofillgapsatthe midandsenior levels.
Headds
that
abank's
operations
arenot
just
about
processesandtechnologies,but alsoservice andcustomers.Thatis thereason
whyAxispaysspecialattentiontotrainingitsstaf,andMD
and
CEOShikhaSharmaoftenremindspeoplethatthebankisactuallyin
thebrancheswhere
thereisacustomerinterface."Ourbeliefsandvaluesystemareheldverycloselybyt
hetop
management,"says
Dahiya.

Growth Ladder in AxisBank

6.Outlook,Opportunities,Improvemen
tareas - Divya
AxisBankcontinuestobeoneofthepremierprivate
sector
banksin
Indiawithrobustgrowth
prospects.Banksmajorstrengthshavebeenitsabilitytogrowitsretail
business(bothassets andliabilities).Growthdriversfor themediumtermremain
withloangrowthlikelyto
besteady
withalmoststableNIMs.Feeincomegrowthshouldbroadlytrackassetgrowth.Asset
quality toohasbeenmaintainedandCAR remains adequate.
Thereisencouragementby1)
growingretail
advances2)
sustainabilityinNIMs.But
apprehensionsabout1)Restructuringofloansgiven
itsretailandindustrialexposure
which
mayslipintoNPAs2)Retail
profitabilityisstill
lowaftermorethan15yearsofexistenceand
suchalargebranchspread.Exposureto
infrastructureremainshighat8.99%of
totaladvances
(includingpoweritis16.5%)exposingtheBanktorestructuringandNPArisks.Mana
gement is lookingto increaseitsretail exposureto reach35%byFY15
whichislikelyto providesupportto NIM inthelongerduration.
Axisremainsexposed
to
creditrisk,
givenitsrelativelyhighexposureto
infrastructureand
stressedcorporate.
The
bankhas
beenable
tonavigatethroughan
extremelychallenging domestic macroeconomic
environment.Whilechallengesdopersistintermsofslowingcredit,
theworst
onasset quality seems tobe behindit.
Astableand reformoriented Governmentshouldresultin reduced
infrastructureand
powersectors
andcouldmake
Bankoneofthekeybeneficiaries.

stresson
Axis

7.LastYearAutumnsPlacement Divya (add some details of the process

through the transcript)
Name
SanujDag
a
DipikaRa
o
LaxmikantKabra

Profile
Treasury ,derivativestructuring
CorporateCards-RetailBanking
RetailLiability :Priority accounts
analysis