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Introduction
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AXIS bank (formerly UTI Bank) is the first new generation private sector bank to be established in India under the overall reform programme initiated by the govt. of India in 1991.
The bank promoted by Unit Trust of India, the largest mutual fund in India, holding 87% equity.
Axis banks first capital raising post inception was in 1998through public offering.
GIIC & four PSU Insurance 5.28% companies Non promoters Holding Foreign Shareholding 16.96% 40.09%
SHIFT IN STRATEGY
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Initial business model: the bank started to give more corporate loans, as they offered higher yields during FY96 to FY99. But the overexposure to corporate loans impacted the banks asset quality. In 1999, the banks net NPAs to advances ratio jumped to 6.3% in FY99 from 3.7% in FY97. Realizing the risk of overexposure to this segment, AXIS bank started shifting its concentration to retail finance, which presented immense growth opportunities.
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Strategy shift: AXIS Bank started focusing on both physical & technology infrastructure, which it thinks are key to acquire customers in retail finance segment. Braches increased to 450 from just 35 in FY99. It is the 1st Indian Bank to have a remote disaster recovery management system to protect its business from any eventualities.
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Powerful back office hubs Banks centralized phone banking center Zonal level Nodal officers Know your customer norms
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2. Risk management:
Risk limits are set according to number of criteria including relevant market analysis, business strategy & management experience.
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3. Dealing with regulations:
The bank calculates capital charge on operational risk under both the Basic Indicator Approach & the standardized approach.
The bank has simultaneously undertaken internal studies on several lines of business for an evaluation of the risk profile, capturing of losses incurred & identifying the key risk indicators.
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4. Keeping pace with the technology :
The banks IT system developed a process called SETU ( Seamless Electronic Transfer to AXIS Bank)
The sale & redemption of 58 AXIS Mutual Funds Schemes was an additional service through the ATM channel.
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5. Product & service innovation:
Bank set up low cost rural ATMs at Anand. A channel finance hub was created
Revise as needed in the light of actual erformance, changing conditions, new opportunities , & new ideas
Growth Strategy
Objectives
Increasing the market share in various business resulting in an enhancement in its core income streams. Improve the quality of its income streams.
with Maruti & Hyundai For selling car loans. Co-financing pact with India In infrastructure Finance Company Ltd.(IIFCL) for infrastructure projects. Tie-up with Bajaj Allianz General Insurance Tie-up with Metlife as Bancassurance Partner. ATM sharing based on alliances with other banks such and multi-bank shared payment networks. Economic Times Remit2India for money transfer.
Evaluation Of Growth
Year
2004-05 2005-06
Net Profit
334.58 485.08
% increases
---44.98