Axis Bank’s MD & CEO Amitabh Chaudhry has a spring in his stride these days. The 57-year-old banker has recently completed an important acquisition that has the potential to catapult Axis Bank—the third-largest private sector bank in India—to the next level in retail banking. Axis has just picked up the consumer banking business of Citi in India for $1.6 billion, edging out rivals like Kotak Mahindra Bank. The acquisition is part of Axis’s ambition of becoming No. 2 among private sector banks by balance sheet size, a spot currently occupied by ICICI Bank. HDFC Bank is at No. 1. To be sure, Axis has narrowed the gap with ICICI Bank in terms of assets to Rs 2.36 lakh crore in FY22, down from Rs 3.68 lakh crore in FY20. But as Chaudhry tells Anand Adhikari, who gets you the cover story, Axis now sees itself as a “crouching tiger”, hungry for business and growth. “We need to raise our aspiration level. We are not happy with No. 3,” Chaudhry says candidly.
The Citi retail banking acquisition is an important step for Axis since it comes with high-quality, premium customers from the top 18 cities and powers the retail banking business of the bank, which currently contributes 56.5 per cent to total advances. Besides, Citi’s top-quality credit card portfolio will also once again help in reducing the gap with ICICI Bank which is currently in third place in credit cards, with Axis at No. 4. The Citi retail banking portfolio will also allow Axis to cross-sell and upsell to an existing base of engaged customers. But hungry for growth, Chaudhry is also eyeing further acquisition opportunities in general insurance and other segments. Over the past couple of years, as Chaudhry went about putting together Axis’s growth plan—he took charge at Axis in January 2019 after the exit of Shikha Sharma—he has made a number of acquisitions by picking up stakes in life insurance and stockbroking businesses (nearly 13 per cent in Max New York Life and trading accounts of Karvy Stock Broking) and then topping it up with the big Citi deal. Alongside, he has brought in top-flight talent from other banks and insurance companies to set up a formidable top management team. But there are speed bumps, too, which Axis will have to contend with: chasing high-rated corporates is a low-margin business. Besides, importing talent from outside could demotivate the internal cadre. How Axis navigates the future will be interesting to watch.
Elsewhere in this issue, Nidhi Singal helms a special report on digital transformation. With companies—large and small—realising the value of digitalisation, and the government focussing on e-governance in a major way, this package of stories takes a close look at some key aspects of this journey. Digital transformation also requires a big push in skilling, and Rajeev Chandrasekhar, Union Minister of State for Skill Development, lays down the government’s roadmap on that front.