If the sharp decline in the retail asset book in the past year in the case of Axis Bank is part of a deliberate business strategy, this could havesignificant implications (not necessarily negative) for the overall future profitability of the business.Despite the slower growth of the retail book over a period of time and theoutright decline seen in the past year, the bank’s fundamentals are quiteresilient. With the high level of
mid-corporate and wholesale corporatelending the bank has been doing, one would have expected the net interestmargins to have been under greater pressure. The bank, though, appears tohave insulated such pressures. Interest margins, while they have declinedfrom the 3.15 per cent seen in 2003-04, are still hovering close to the 3 per cent mark. (The comparable margins for ICICI Bank and HDFC Bank arearound 2.60 per cent and 4 per cent respectively. The margins for ICICIBank are lower despite its much larger share of the higher margin retail business, since funding costs also are higher).
Company History - Axis Bank
1993- The Bank was incorporated on 3rd December and Certificate of businesson 14th December. The Bank transacts banking business of alldescription. UTI Bank Ltd. was promoted byUnit Trust of India, Life Insurance Corporation of India, General Insurance Corporation of India and its four subsidiaries.- The bank was the first private sector bank to get a license under The new guidelines issued by the RBI. 1997- The Bank obtained license to act as Depository Participant with NSDLand applied for registration with SEBI to act as `Trustee to DebentureHolders'.- Rupees 100 crores was contributed by UTI, the rest from LIC Rs 7.5crores, GIC and its four subsidiaries Rs 1.5 crores each.
- The Bank has 28 branches in urban and semi urban areas as on 31st