Banks have traditionally depended on corporate lending and bulk advances. But increases in non-performing assets (NPAs) and stressed assets of these banks have led to an erosion of their capital base. This has prompted banks to take different strategies to grow. Focussing on the untapped retail customers by offering them attractive options to borrow is one such.Rajiv Anand, executive director, retail banking, Axis Bank, explains its plans.
Retail banking is growing very fast. How is Axis Bank poised to leverage this?
Retailisation has always been at the core of our vision. We strongly believe that digitisation is hygiene, not a delight any more and hence we would pivot all products, services and processes which aren’t native to digital. Payments would continue to be a predominant lever in this space.
Axis Bank has seen only steady progress in the retail business — six years ago, 20% of assets belonged to this segment; today it is about 45%. Why this change now?
We have organically built ourselves as a market leader in retail franchise. With proliferation of technology and digital, one could expect a long tail strategy to reach otherwise niche segments, in addition to reaching the mass through branch expansion. The growth in the retail customer base has been strong at 27% CAGR and so has been our market share since 2012. Distribution combined with product capabilities and digital thought leadership has contributed to strengthening our market share in retail, which today stands at 46-48% across advances, deposits and fee income.
With disposable income levels rising and consumption going up, are you witnessing a commensurate rise in retail loans? Your retail customer base has grown 14% between 2013-2017.
Factors like increased disposable income, increased discretionary spends and high consumer confidence index did have a positive impact across our retail businesses including payments. These factors combined with effective use of big data and analytics help us offer…