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Xavier Institute of Management

Bhubaneswar

STM Project

Submitted by: Group 8


Arpit
Bikram Das(UM15070)
Barsha Priyadarshini(UM15074)
Kunal Sharma(UM15089)
Rahul Kumar Jena(UM15101)
Swapnika Das(UM15117)

ACKNOWLEDGEMENT
We would like to express a whole-hearted gratitude to all those who have helped with the report or have been
associated with the report in any which way and made it a worth-while experience.
We are greatly indebted to our batch mates and our seniors for having shared their invaluable experience that
went a long way in the successful completion of our report.
We are thankful to everyone who helped us to collect valuable information and without their help and cooperation,
this project would not have been successful.
A special mention of Prof. Brajaraj Mohanty who has given us the opportunity for working on such a project, for his
incessant support, feedback& guidance leading it to successful completion.

Thank you.

Contents
1

Executive Summary................................................................................................................................................5

Industry Overview..................................................................................................................................................6
2.1

Nature and Size of the Industry........................................................................................................................8

2.2

Key Growth drivers for the industry..................................................................................................................9

2.3

Identification of Critical Success Factors (CSF).................................................................................................9

2.4

Market Analysis based on CSFs......................................................................................................................10

2.5

Axis Bank Benchmarks...................................................................................................................................11

2.6

PESTEL Analysis..............................................................................................................................................13

2.7

Porters Five Forces Analysis...........................................................................................................................16

2.8

Market Segmentation.....................................................................................................................................18

2.9

Buying Criteria Analysis of the Industry..........................................................................................................20

2.10 Key trends and future developments..............................................................................................................22


3

Company Overview..............................................................................................................................................23
3.1

Company background.....................................................................................................................................23

3.2

Timeline with key milestones and their strategic impact...............................................................................25

3.3

Vision, Mission, Goals, and Strategic Themes.................................................................................................27

3.4

Key Product and Service Portfolio...................................................................................................................32

3.5

Core Competencies of the firm.......................................................................................................................35

3.6

Business Model of the organization................................................................................................................35

3.7

SWOT Analysis................................................................................................................................................46

3.8

Competitor Analysis (identify competitors)....................................................................................................47

3.8.1
4

Based on Critical Success factors.............................................................................................................47

Future Growth Strategy for the organization........................................................................................................49


4.1

Portfolio Analysis............................................................................................................................................49

Based on BCG Matrix............................................................................................................................................49


4.2

Companys Strategic Roadmap for future.......................................................................................................49

1 Executive Summary
The objectives of this project analysis are as follows

To gain knowledge about the products and services of Axis Bank Ltd. and to compare it vis-a-vis other banks.
To identify the strategies adopted and critically analyze their impact on the organization as well as the industry.
To gain insight into the core competencies of the firm, how they have been utilized and the future prospects of
the organization based upon past data and current trends.

The banking industry has mainly been of interest owing to its complexity and importance in the financial sector and
in the economy of any country. With India well on its way to become a developed economy and programs like Startup India, Digital India, Make in India, etc. gaining the limelight, the banking sector has become even more central to
the realization of these dreams by providing a strong fiscal backbone.
Axis bank, the third largest bank of India has undertaken some very specific, calculative and distinctive measures in
order to distinguish itself from its competitors and carve a niche for itself. Formerly known as UTI bank, its rebranding
and consistent growth thereafter has been a major awe inspiring factor in the banking sector.
The main strategies of Axis Bank limited are1. Combining growth & profitability
Gain market share and maintain above industry profitability
Diversify revenue streams Strong retail deposit franchise
Robust asset quality
2. Aiming for balanced growth
Continue to build on key strengths of the franchise
Leverage relationships with customers with a complete product portfolio
Pursue growth opportunities in key businesses

Here we are critically analysing the financial, environmental and forecast information in order to summarize the
reasons behind the organizations envious growth, its expansion and innovation and its future.

2 Industry Overview
OVERVIEW OF THE INDIAN BANKING INDUSTRY
With 60% of the Indian population still unbanked and the increasing demands of a developing India. Banking
industry in India has a bright future.
With the potential to become the 5th largest industry in banking in the world by 2020 and 3rd largest by 2025
according to KPMG-CII report, Indias banking and financial sector is expanding tremendously. The Indian industry is
currently worth Rs. 81 trillion (US $ 1.31 trillion) and banks are utilizing the latest technologies like internet &
mobile devices to carry out transactions and communicate with the public.
The Indian banking sector comprises of 26 public sector banks, 20 private banks and 43 foreign banks with 61
regional rural banks (RRBs) and more than 90,000 credit cooperatives.
Credit off-take has been increasing ahead over the past 10 years, supported by strong economic growth, rising
disposable incomes, rapidly increasing consumerism and easier access to financial credit.
Total advances went up to US$ 1,089 billion by FY2015
Advances to non-food industries increased 9.75 % to US$ 1,073.4 billion in FY15, since the last year
Demand for both corporate and retail loans has seen a rise.

Strong growth in deposits.

2.1 Nature and Size of the Industry


History and Evolution of the
industry

Banking in India in the originated in the last decades of the 18th century. Among
the first banks were the Bank of Hindustan, which was established in 1770 and
the General Bank of India, established in 1786.Both are now defunct. The oldest
bank still existing is the State Bank of India (S.B.I). It originated as the Bank of
Calcutta in June 1806 and was renamed as the Bank of Bengal in 1809.
Theperiod between 1906 and 1911 saw establishment of banks inspired by
Swadeshi movement. A number of banks established then have survived till
now such as Bank of India, Canara bank, Bank of Baroda and Central bank of
India. Throughout the First World War (19141918) and by the end of
the Second World War (19391945), and two years thereafter till
the independence of India was a challenging period for Indian banking.

Key Consumers of this industry and


their changing needs

While most of consumers believe that the financial institutions excel at


providing digital access and convenience, 77 percent of the consumers dont
believe banking meets expectations in basic banking areas such as fair and
transparent pricing. This implies that while the financial industry as a whole is
successfully delivering digital access solutions, there are significant
opportunities to build a stronger and long-lasting foundation for consumer
relationships. This can be achieved by fully leveraging the online, mobile and
social platforms to integrate with consumers lives through insight-driven alerts,
advisory services, planning tools and more.

Stage in the Industry Life cycle

There are Five stages in the Industry lifecycle namely Introduction Phase,
Development Phase, Growth Phase, Maturity Phase and Decline Phase. Total
lending and deposits increased at a compounded annual growth rate (CAGR) of
20.7 per cent and 19.6 per cent, respectively, during FY07-14 and are further
poised for growth, backed by increased demand for housing and personal
finance. Total asset size of banking sector assets is expected to increase to US$

28.5 trillion by FY25. Deposits have grown at a CAGR of 13.6 per cent during
FY0515 to an estimated US$ 1.47 trillion in FY15.
Total Available Market Size (National
and Global)

India has the potential to become the fifth largest banking industry in the world
by 2020 and third largest by 2025. According to the KPMG-CII report, Indias
banking and financial sector is expanding rapidly. The Indian Banking industry is
currently worth Rs. 81 trillion (US $ 1.31 trillion) and the banks are now utilizing
the latest technologies in internet and mobile devices to carry out transactions
and communicate with the masses.
The global banking industry today faces short-term uncertainty due to the debt
crises that challenge several major economies, but total industry assets are
forecasted to climb to an estimated US $163,058 billion in 2017 with a CAGR of
8% over the next five years.

Total Serviceable Market Size


(National and Global)

National US$ 1.46 trillion


Global US$ 150 trillion

2.2 Key Growth drivers for the Industry


Key Growth drivers

Rationale

1.Huge growth potential in domestic Over time, the banking sector is going to grow significantly faster than GDP in
market
these emerging economies as they develop. India is likely to emerge as the
third largest domestic banking market in the world by 2040 and could grow
2.Rise in GDP and Purchasing power faster than China in the long run. Retail banking sectors seem likely to see
particularly rapid growth, since mortgage and consumer credit lending is
generally not well developed yet in these markets compared with corporate and
government lending (although both these areas also offer considerable
opportunities as well).

2.3 Identification of Critical Success Factors (CSF)


Critical Success Factor identified

Rationale

CSF 1: Technology

The latest technologies play a very important role in the banking industry.
Technology can be used to lower the cost of transaction and improve the quality
of product.

CSF 2: Product Innovation

Since all the banks are offering similar products therefore differentiation is very
important for the future survival. Banks need to come with different innovative
product in order to differentiate themselves from other banks.

CSF 3: Brand Image

Brand image plays a huge role in select a product or the bank. City bank and
bank of America have huge resources as well as market share. Because of their
brand image most of the people want to be their customer.

CSF 4: Location and convenience

It is important to note that convenience attracts customers. A bank having


wider network will be convenient for a customer to make transactions easily.

2.4 Market Analysis based on CSFs


Region

CSF 1: Technology

CSF 2: Product Innovation

CSF 3: Brand Image

CSF 4: Location and


convenience

India

Banks nowadays have


changed
in
their
operations and moved
towards
universal
banking along with the
increased
usage
of
technology
and
technology-based
services
which
offer
alternate channels such
as smart cards, ATMs,
usage of the internet,
social,
and
mobile
banking. Banks have
started deploying core
banking,
human
resource
management
(HRM) and enterprise
risk (ERP) management
and
process
reengineering
etc
to
improve
on
their
performance
and
productivity. Majority of
banks are insisting on
cashless and paperless
payment
modes.According to a
KPMG
study,
as
of
FY2014,
non-cash
payments
contributed
91 per cent in value

Prior to the financial


crisis, innovation within
banks and many other
financial institutions was
sporadic.
However
nowadays
Banks
are
coming up with different
innovative
product
in
order
to
differentiate
themselves from other
banks. Technology now
allows banks to create
what looks like a branch
in a business buildings
lobby without having to
hire human resource for
manual operations. These
branches are operating on
the concept of 24 X 7
working made possible
due to Tele banking,
Internet Banking, ATMs,
Mobile Banking and Ebanking.

Economic
reforms,
increased
infrastructure
investment and a greater
focus
on
tackling
bureaucracy
have
boosted
economic
forecasts and investor
confidence, laying the
foundations for Indias
brands to grow. State
Bank of India continues to
lead the field as Indias
most valuable banking
brand. It has added $2.5
billion to reach a total of
$6.6 billion. Its growth is
not reliant on Indias
economic
performance
alone.

Customers
want
convenience
more
than
any
other
attribute from their
banking
experience.
Customers
devote
much emphasis on
electronic
services
(ATM)
which
gives
them
quick
and
convenient access to
the
bank
services.
Factors
such
as
parking facility, free
delivery of demand,
phone banking, and
free
home
cash
delivery suggest that
consumers
want
convenience
in
banking and they want
to save time.

terms as compared to 88
per cent in FY in 2012
and 48 per cent in terms
of value from 35 per
cent in FY 2012.

Note: Use data for the year 2013-14

2.5 Axis Bank Benchmarks


Metric

201
1

201
2

201
3

201
4

201
5

Market
Capitali
zation

576
344

473
614

608
668

686
208

132
796
6

Total
Deposit
s

180
060
8

207
795
2

234
101
6

265
385
6

309
887
0

P/E

20.4
9

13.9
8

11.5
5

10.1
0

16.3
1

P/Share

280.
77

229.
24

260.
14

292.
10

560.
20

Dividen
ds

1.4

1.38

1.37

.82

Revenu
e

97.1
0

133.
28

157.
75

164.
68

189.
08

Profit
Margin
bef.
provisio
ns

49.5

49.0

50.1

52.9

53.8

Net Int.
margin

3.37

3.27

3.31

3.56

3.61

ROA

1.58

1.60

1.67

1.74

1.75

ROC

6.72

6.50

6.13

6.05

5.83

OWNERSHIP OF AXIS BANK


Ownership Type

%age as on 21/02/2016

Investment advisor

64.06

Government

27.00

Insurance Company

7.07

Other

1.55

Individual

0.15

Bank

0.09

Hedge Fund Manager

0.06

Pension Fund

0.02

2.6 PESTEL Analysis


Category

Description

Political

Banking
sector
is
greatly influenced by
the political forces.
There is a change in
policies every time
the
government
changes.
The
business
decisions
are tailored to a great
extent based on the
individual preferences
of the new leadership.

Monopoly of
public sector
banks could be
over

Capitalisation of
public sector
banks based on
efficiency

The economic boom


in India particularly in
the last decade has
played a significant
role in charting the
success
of
the
company. Increase in
industrialization has

Increase in GDP
growth Rate

Increase in
Global player

Liberal
economic
policies

Economic

Key factors for


analysis

Rationale
The near-monopoly of public sector banks, which
accounted for over 77 % of the loan market, could
well be over. There could be reduction of the public
sector banks, increased number of niche banks that
offer only specific products or cater to a particular
group of customers and more private universal
banks. The recent decision of the government to
capitalise public sector banks based on their
efficiency could go a long way in reducing the
muscle power that the state-run banks enjoy if the
government decides to sticks to the strategy of
selective infusion of capital. The data compiled by
the finance ministry shows that the public sector
banks combined market capitalisation is only 36% of
the banking sector's total market cap even though
they control 77% of the loan market, while their
average price-to-book value (P/BV) is 0.67. In
contrast, private sector lenders' market cap is 74
per cent with average P/BV at 2.35.
The Indian banking system comprises of 26 public
sector banks, 25 private sector banks, 43 foreign
banks, 56 rural banks, 1,589 urban cooperative
banks and 93,550 rural cooperative banks. In
addition there is also the presence of cooperative
credit institutions. Public-sector undertaking banks
control nearly 80 % of the market, leaving
comparatively much smaller share of the market for

been brought about,


which
has
always
been a catalyst for
sectoral
sprinting
growth.

Social

India as a country and


its people are poised
for
a
giant
leap
towards
economic
growth
and
prosperity.
People
have started realizing
how important it is for
the
economy
to
develop for their own
betterment. Levels of
awareness have gone
up drastically and the
people
are
much
more
open
to
industrial growth for
the
economic
betterment.

Huge growth
potential for the
domestic market

In August 2014 Indias New Prime minister had


declared Prime Ministers Jan Dan Yojana it is an
innovative initiative taken by the new government.
Under this new scheme launched in India, every
Indian family will be enrolled in a bank for opening a
zero balance account. This scheme not only provides
the Indian families a bank account but it also offer
various benefits for the poor families. This new
scheme is the first step towards bringing economic
equality in the country.

Technologic
al

Banking
Sector
in
India is to a great
degree
driven
by
technological

Enhancing core
banking values

Investment in
business

The gradual shift towards internet banking is fuelled


by the changing dynamics in India. By 2020 the
average age of the population of India will be around
29 years and this young consumer base is internet

Ease of doing
business in the
country

its private peers. Global rating agency, Moody's has


upgraded its outlook for the Indian banking sector
from negative to stable rating based on its
assessment of the five drivers which includes
improvement in the operating environment and
stable asset risk and capital scenario.

developments
and
innovations. It has
directed its earnest
efforts
towards
improving
its
technological prowess
to meet the changing
requirements of a
growing economy.

Environmen
tal

Laws
regulating
environmental
pollution, endangered
species,
attitudes
towards
green
solutions, renewable
energy
utilization,
climate
change,
waste management,
recycling
are
just
some
of
the
environmental factors
which
we
should
considered in order to
estimate
the
challenges
and
opportunities in the

intelligence

Technology in
training and elearning

Slowdown in
global economy

Slowdown
recorded in
balance sheet
growth by the
banking sector

savvy and wants real time online information. RBI


has also encouraged banks to adopt Business
Intelligence to increase transparency and control
over the banking business. The Automated Data
Flow (ADF) initiative has been a strategic step in this
direction, looking to ensure the submission of
correct and relatively consistent data from the banks
systems to the RBI without any human intervention.
The increase in investment in the training and
development process of the employees by the banks
in India is caused by a variety of motives, which
includes new technology adoption, responding to
skills deficiencies, productivity, new hire inculcation,
and staff performance management.
During the year gone by, central bankers across the
globe other than the US, moved towards monetary
easing measures to boost the economy. However,
the global economy continued to remain fragile and
depressed with the second largest economy China
witnessing a huge slowdown. Even crude oil prices
continued to slide sharply on oversupply issues and
this has further weighed down on the ongoing global
recovery. The International Monetary Fund lowered
its global growth forecast to 3.3% in 2016. In light of
the continued weakness, the Bank of Japan & the
European Central Bank have decided to extend their
quantitative easing programs. The US Federal
Reserve, on the other hand, raised the interest rates
by 0.25% for the first time since 2006.
The banking sector recorded slowdown in the

business context.

Legal

Nowadays
no
company wants to be
unethical
in
its
activities and to be on
the wrong side of the
law. The media in
India is very proactive
and the smallest of
irregularities
or
misconduct is noticed
and
reported
by
them. This can ruin
the image of the
company hugely, so
banks need to be
extra careful.

balance sheet growth for the fourth year in a row in


FY15. The slowdown was on account of sluggish
credit off take that slipped to single-digits during the
year. But on the back of controlled operating
expenses, the sector managed to post incremental
profits during the year. However, profitability
remained low with the Return on assets (RoA)
continuing to linger below 1% during the year.

High regulation
in banking
sector

Increase in legal
expenditure

According to the Global Financial Integrity Report the


total amount of illicit money moving out of India rose
to 439.58 billion USD (nearly 28 lakh crores INR)
from 2003 to 2012. In 2012, India ranked third
globally, with an estimated 94.75 billion USD (nearly
6 lakh crores INR) in illicit wealth outflows. Like
many developing economies, India also has an
informal financial system consisting of loan brokers,
NGOs, self-help groups, share brokers and traders,
pawnbrokers, etc. Given the heterogeneous nature
of entities and activities, consistent database of
customers and transactions is not available. Most of
the Informal financial agencies are also not
considered very reliable in terms of customer
protection.

2.7 Porters Five Forces Analysis


Porters Five

Description

Key factors for analysis

Rationale

Forces
Buyer Power

Supplier Power

Existing
Competition

We ask here how


easy it is for
buyers to drive
the prices down.
If one deal with
few,
powerful
buyers, then they
are often able to
dictate terms to
it.

Multiple sources of supply

Large no of options from


competitors

Margins and volumes

We assess here
how easy it is for
suppliers to drive
up prices. The
fewer the supplier
choices one has,
and the more one
need
suppliers'
help, the more
powerful
ones
suppliers are.

Role of RBI

Providers of funds

Rise in investment
avenues

What is important
here
is
the
number
and
capability
of
competitors.
If
one has many
competitors, and
it offer equally

Total No of firms (Listed


as well as Unlisted)93
No of large firms 19

Stiff competition from


foreign competitors

low price sensitivity

High bargaining power of the customers


on account of the fact that most banks
render uniform services to the clients.
Nowadays almost all banks like to
provide requisite information very easily
by way of Internet and Mobile banking to
the customers. Also customers move to
the banks that offer the most attractive
lending and saving interests.
Low bargaining power of suppliers on
account of RBI regulatory benchmarks.
Banks have to meet numerous regulatory
standards created by RBI.

High competition of account of number


of prominent public, private, foreign
along with cooperative banks.

attractive
products
and
services, then it
will most likely
have little power
in the situation.
Threat to new
entrants

Threat to
substitutes

Power
is
also
affected by the
ability of people
to
enter
our
market. If it costs
little in time or
money to enter
the market and
compete
effectively,
if
there
are
few
economies
of
scale in place or if
there exists little
safeguards
for
key technologies,
then competitors
can easily enter
our market and
weaken
our
position.

Entry/ Exit barriers and


costs

Huge capital
requirements

This is affected by
the
ability
of
customers to find

Conservative customers

Close customer

Low threat of new entrants on account of


banking regulations. Before setting up of
a new bank, it is essential for the bank to
take the consent of RBI.Payments banks
have very limited scope of services which
it can offer to its customers and will
particularly not have access to sticky low
cost deposits which the traditional banks
have along with capacity to lend. They
cannot compete with banks, as they are
not full- service entities and don't have
adequate customer switching costs.

Medium menace from substitutes like


NBFCs, Mutual funds, Government
securities and T-bills. No real threat of

a different way of
doing what you
do. If substitution
is
easy
and
viable, then it
weakens
the
power.
Effect of
Competitors

relationship

This is the affect


competitors have
on the company.

Switching costs

substitutes as far as deposits or


withdrawal however insurances, mutual
funds fixed income securities can be
substituted by non banking companies.

Too many players of same


size

Banking industry is considered highly


intense and competitive.

Competitors have similar


strategies

2.8 Market Segmentation


PERSONAL BANKING
Criteria for segmentation
Demographics

Occupation

Geographical

Segments

Senior citizens

Minors

Tech savvy individuals

Business persons

Salaried class (Both government and private)

Working women

Metros

Psychographic

Divisional cities

Lifestyle

CORPORATE BANKING
Segments
Approach taken
Medium Enterprises
Group

Small Enterprises Group

Supply Chain Finance

TARGETING
Corporate banking market

Capital market

Retail banking market

POSITIONING

Relationship based approach

Sales and Relationship based


approach

Corporate Anchored Business

Key products

Working capital finance

Term loans

Non-fund based facilities

Templated products

Working capital finance

Working women

Factoring

Vendor

Dealer finance

Axis bank has positioned itself as a bank which gives higher standard of services through product and
services innovation for the diverse needs of
Parameter
Details
End-user
Significanc
individual and corporate clients.
Segments
e Attached
(Low,
Positioning strategies are based on
Medium,
product/service attributes & quality/value.
High)
Positioned as an organization which is inclined
Loan Term
It is the loan
Individual
High
towards
for Banking duration over
Customers
Sector
which the
Customer centricity
Loans
borrower has to SMEs
High
Service orientation
repay the loan.
Corporate
High
Convenienc
e

Location of
office/direct
deposit

Individual
customers

Medium

Low fees/
minimum
balance
requiremen
ts
Range of
services

Lowest fees
required for
services

Individual
consumers
SMEs

High
Medium

Ability to obtain
many services
at one place

Entire target
base

Medium

Safety

Absence of risk

Individual
consumers
Corporate/SM
Es

Medium
High

Personal
relationship

Recommendatio
ns by friends,
family
Friends, family
working there

Individual
consumers

Medium

Product innovation
2.9 Buying Criteria Analysis of the Industry
Impact of buying criteria on consumer choices
Listing of key buying criteria for different
consumer segments
The impact of the buying criteria is graded on the
basis of the intensity and duration of their impact on
the current market landscape. The magnitude of the
impact has been categorized as described below:
Low - Negligible or no impact on the market
landscape
Medium - Medium-level impact on the market
High - Very high impact with radical influence on
the growth of the market

2.10 Key trends and future developments

Key Trends

Impact on Industry (Low, Medium,


High)

Trend 1-Nationalism and globalism

High (New economic issues might Medium


push countries to practice defensive
trade approaches. This would affect
the banking industrys ability to get
into or get out of markets and
restrict ownership structures and
reflow of funds.)
Medium (state involvement in both High
the structure and daily operations of
the banking industry is growing
dramatically, this shift will also
generate new business models as
governments with less or limited
resource welcome partnerships with
institutions to be able to provide
ideas, funds and other operational
skills.)
High (Because most trade takes High
place within regions, global banks
will be required to utilise the
expertise
of
strong
regional
partners, they will also be known for
their good quality service standards
and
long-lasting
client
relationships.)

Trend 2-State capitalism

Trend 3- Trade flows

Certainty of Impact (Low probability,


medium probability, high
probability)

Trend 4- Demographics

Medium
(Demographics
will Medium
influence the future of banking.
Forecasts
indicate
that
global
population will cross 8 billion by
2030.
We need new banking business
models to serve this aging, and
increasingly urban, demographic.)
Analysis of Trends with High Impact and High Certainty to be carried out.
Impact on strategies or business models to be highlighted.

3 Company Overview
3.1 Company background
Axis Bank is one of the first new generation private sector banks to have begun operations in 1994. The Bank
was promoted in 1993, jointly by Specified Undertaking of Unit Trust of India (SUUTI) (then known as Unit
Trust of India), Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), National
Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and
United India Insurance Company Ltd. The share holding of Unit Trust of India was subsequently transferred to
SUUTI, an entity established in 2003.
Axis Bank India, the first bank to begin operations as new private banks in 1994 after the Government of India
allowed new private banks to be established. Axis Bank was jointly promoted by the Administrator of the
specified undertaking of the Unit Trust of India (UTI), Life Insurance Corporation of India (LIC) and General
Insurance Corporation of India (GIC).
The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai.
The bank was formerly known as UTI Bank; it changed its name to Axis Bank in July 2007.
AXIS bank is the 3rd largest private sector bank in India.

The Bank offers the entire spectrum of financial services to customer segments covering Large and MidCorporates, MSME, Agriculture and Retail Businesses.
The Bank has a large footprint of 2589 domestic branches (including extension counters) and 12,355 ATMs
spread across the country as on 31st March 2015.
The overseas operations of the Bank are spread over nine international offices with branches at Singapore,
Hong Kong, Dubai (at the DIFC), Colombo and Shanghai; representative offices at Dhaka, Dubai, Abu Dhabi
and an overseas subsidiary at London, UK. The international offices focus on corporate lending, trade finance,
syndication, and investment banking and liability businesses.
The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry
practices internationally in order to achieve excellence.
With a balance sheet size of Rs. 4,61,932 crores as on 31st March 2015, Axis Bank has achieved consistent
growth and stable asset quality with a 5 year CAGR (2010-11 to 2014-15) of 21% in Total Assets, 18% in Total
Deposits, 22% in Total Advances and 24% in Net Profit.

ORGANIZATION STRUCTURE

3.2 Timeline with key milestones and their strategic impact


1. 1993- Axis Bank (erstwhile UTI Bank) opens its Registered Office in Ahmedabad and Corporate Office in
Mumbai
2. 1994- Banks first branch inaugurated at Ahmedabad by Dr.Manmohan Singh, then Hon'bleFinance
Minister, Government of India.
3. 1998- Successfully completes its IPO in 1998 and gets itself listed on NSE and BSE.
4. 2001- Deposits base crosses Rs.10,000 crores

5. 2002- Banks 100th branch opens at Tuticorin, Tamil Nadu


-The Bank opens an ATM at the GolDak-Khana, (New Delhi GPO), the first ATM at any post office in the
country
-Bank launches corporate iConnect - the internet banking facility for corporate customers
6. 2003- The Banks debit card base crosses the one million mark
-The Bank opens its ATM at Thegu near the Nathula Pass in Sikkim. This ATM is at the highest altitude
in India.
-First Indian bank to launch the travel currency card
-The Bank opens its 1000th ATM
7. 2005- Bank gets listed on London stock exchange
-The Bank and Visa International launch mobile refill facility for all Visa card holders in India
8. 2006- Opens its first international branch at Singapore
-The first Indian Bank to successfully issue foreign currency hybrid capital in the international market
-Opens Representative Office in Shanghai
-Launches credit card business
-Opens the first of its kind Priority Banking lounge in Pune
9. 2008- Launches Platinum Credit Card, India's first EMV chip based card
-Opens its Dubai Representative Office
10.

2010- Opens its 1000th branch at MET Bandra Reclamation, Mumbai

11.
2011- Launches India travel card - India's first and only Indian currency prepaid travel card for foreign
nationals

-The Bank inaugurates Axis House, its new Corporate Office at Worli, Mumbai.
12.

2012- Opens the 10,000th ATM - Largest ATM network amongst private sector banks in India
-Reached 2 lakh installed EDC machines the highest for any bank in India
-Becomes the first Bank in the world to reach $2 billion loading on prepaid Travel CurrencyCards

13.

2013- 'Bank of the Year' at the Money Today FPCIL Awards 2012-13
-Best Financial Website - India Digital awards

-Axis Bank voted for Most Trusted Private Sector Bank in the country in the Most Trusted Brands survey
2013 by Brand Equity.
14. 2014- Axis Bank becomes the first Indian Private Sector bank to set up a branch in China
-Axis Bank signs MoU with China Development Bank
-Axis Bank features in Forbes Asias FAB 50 list for the fourth time
-Axis Bank opens its first 'All Women Branch' at Patna, Bihar
-Axis Bank has splits its face value from Rs 10/- to 2/15. 2015-Axis Bank becomes Indias third largest private sector bank
-Axis Bank Ltd raises Senior Notes in the International Market
-Axis Bank, Suvidha Infoserve join to introduce pre-paid card
-Launch of the Display variant Debit Card for its NRE customers
-Axis Bank to offer electronic signature facility to its customers
-Axis Bank and Vistara join hands to introduce cobranded credit card

-Axis Bank opens its representative office in Dhaka to strengthen its International
presence

3.3 Vision, Mission,Goals, and Strategic Themes


MISSION:
Customer service and product innovation tuned to diverse need of individual and corporate clients
Continuous technology up gradation while maintaining human values
Progressive globalization and achieving international standards
Efficiency and effectiveness built on ethical practices
VISION 2015
To be the preferred financial solutions provider excelling in customer delivery through insight, empowered
employees and smart use of technology
CORE VALUES
Customer Centricity
Ethics
Transparency
Teamwork
Ownership

STRATEGIC THEMES:
Strategy for Axis bank has aimed at-

Consistent growth trajectory


Above industry profitability
Diversified fee income franchise
Expanding retail deposit franchise
Pan-India multi-channel presence
Robust asset quality

MARKETING MIX
The service marketing mix of Axis bank discusses the 7Ps of Axis bank and how the bank is using an effective
marketing mix to increase its customer base and rise in the banking industry.

PRODUCT
The main products of AXIS Bank are Saving Account, Current Account and Demat Account. The other
products are Home loan, personal loan, Insurance, Credit cards, etc.
For better marketing of products, the products are categorized under Axis Bank and Axis Sales.
Products under Axis Bank are Savings Account
Current Account
Forex Department
Salary Accounts
Products under Axis Sales are
Home loan
Personal loan,
Demat Account
PRICE
The price of the product depends upon the services provided by the Bank on the respective product to the
customers. Detailed pricing changes from time to time and the same can be found on the website of Axis
bank.

PLACE
Place plays an important role in making the service offerings tangible. Quality of service is perceived by
many customers in the form of place of delivery- locational appeal, interiors, ambience, etc. If a bank is

located in a crowded market, the place or location will be act as a deterrent in terms of tangibility. Providing
excellent tangibles in the form of place or location and interiors is particularly important for appealing to the
customers segment. More recently, some of the private banks in India like AXIS Bank are providing very
attractive tangibles in the form of their locations, exteriors and interiors.
PROMOTION
Promotion can make services tangible in different forms:
Visualization
Association
Physical representation
Documentation.
Visualization makes the services tangible through hoardings, TV and print campaigns or advertisements.
Physical representation in services has a good promotional appeal to customers like use of colours to
symbolize wealth and status. Service providers use documentation in their promotions in support of their
claims for dependability, popularity and responsiveness.

PEOPLE

People are a common factor in every service. And people make services tangible. Good people (means good
performance) make good or successful services. Bad performers deliver bad services.
PROCESS
Customer defined business process- Process innovations and continuous improvement through people
involvement.
Result oriented approach- Each process has been designed by first planning the desired results.
Axis Bank is constantly taking initiatives to offer the best in class service that seek to enhance customer
experience.
PHYSICAL EVIDENCE
Reduce paper usage- Due to technological innovations such as use of Finacle software for core banking
solutions.
It has positioned itself as a bank which gives higher standard of services through product innovation.
Satisfies the diverse need of individual and corporate clients.
It is customer centric, and service oriented.

3.4 Key Product and Service Portfolio

SERVICES

1. RETAIL BANKING
In the retail banking category, the bank offers services such as lending to individuals/small businesses subject to
the orientation, product and granularity criterion, along with liability products, card services, Internet
banking, automated teller machines (ATM) services, depository, financial advisory services, and Non-resident
Indian(NRI) services. Axis bank is a participant in RBI's NEFT enabled participating banks list.

Deposit schemes

Loans and advances


- Personal Loans
- Housing Loans
- Cards
- Consumer durables
- Auto Loans

2. PERSONAL BANKING
Accounts
- Terms deposits
- Fixed deposits
- Recurring deposits
Cards
-

Different variants like: Gold plus cards, silver and silver plus cards.

3. TREASURY OPERATIONS: The Banks treasury operation services include investments in sovereign and
corporate debt, equity and mutual funds, trading operations, derivative trading and foreign exchange
operations on the account, and for customers and central funding.
4. CORPORATE BANKING:The Bank offers to corporate and other organisations services including corporate
relationship not included under retail banking, corporate advisory services, placements and syndication,
management
of
public
issues, project
appraisals, capital
market related
services
and cash
management services
Accounts

Normal current a/c

Trust/NGO savings a/c

Services
-

Private equity, mergers and acquisitions

Advisory services

Capital market funding

E- broking

5. NRI SERVICES: Products and services for NRIs that facilitate investments in India.
6. BUSINESS BANKING: The Bank accepts income and other direct taxes through its 214 authorised branches at
137 locations and central excise and service taxes (including e-Payments) through 56 authorised branches at
14 locations.
7. INVESTMENT BANKING: Banks Investment Banking business comprises activities related to Equity Capital
Markets, Mergers and Acquisitions and Private Equity Advisory. The bank is a SEBI-registered Category
I Merchant Banker and has been active in advising Indian companies in raising equity through IPOs, QIPs,
and Rights issues etc. During the financial year ended 31 March 2012, Axis Bank undertook 9 transactions
including 5 IPOs and 2 Open Offers.
8. LENDING TO SMALL AND MEDIUM ENTERPRISES:Axis Bank SME business is segmented in three groups:
Small Enterprises, Medium Enterprises and Supply Chain Finance. Under the Small Business Group a subgroup
for financing micro enterprises is also set up. Axis bank is the first Indian Bank having TCDC cards in 11
currencies.
9. AGRICULTURE BANKING: 759 branches of the Bank provide banking services, including agricultural loans, to
farmers.As on 31 March 2013, the Banks outstanding loans in the agricultural sector was INR 148 billion,
constituting 7.5% of its total advances.
10. ADVISORY SERVICES: They have been developed to advise public and private sector clients on capital
structuring and funding options with a view to help the clients to help them reduce the cost of funds. The

Group has also been active in advising the central and various state governments or their agencies in
privatisation and bid process management. The Group has successfully worked on some of the benchmark
transactions in infrastructure development & manufacturing sector covering an entire range of projects across
roads, railways, airports, urban infrastructure maritime, power, oil and gas, petrochemicals, cement, sugar,
textiles, steel & allied sectors, auto ancillaries, paper, Information Technology, etc. Source:
https://en.wikipedia.org/wiki/Axis_Bank

3.5 Core Competencies of the firm


High level of service Quality through Product Innovation.
Rapid pioneering in available IT platforms& infrastructure

3.6 Business Model of the organization


KEY PARTNERS

MOTIVATIONS

GAINS

1. Vistara

Tap new markets and avenues

Travel is a key spend category for


customers and is growing at a rapid
pace and a partnership with Vistara
will help in further strengthening
their travel product suite with a
compelling proposition.

2. Suvidha Infoserve

Enable financial inclusion

In order to provide easy and safe


access to banking service for the
under banked segments in the
country, the Axis Bank Suvidha
Prepaid card is another initiative that
will take the bank closer to their
Vision of reaching out profitably to
5% of the country's bankable

population and will help many more


customers to enter the Banking
network.
3. China Development Bank

Optimization and economy

This helps Axis Bank to support its


corporate clients by funding them at
competitive pricing and also give the
Bank an opportunity to work closely
with
Chinese
companies
in
facilitating them in their domestic
requirements in India.

4. Miles & More

Acquisition of particular resources


and activities,

The strong customer base and wide


reach of Axis Bank and the expertise
in the Miles based loyalty program
will be a win-win situation for both.
The strength and expertise required
to deliver world standard loyalty
programs along with customer
oriented rewards to customers to
enhance the growth and profitability
of both companies was the main
motivation behind the initiative.

Tap new markets.

5. Schroders

Reduction of risk and uncertainty,


Tap new markets, Gain expertise,
Acquisition of particular resources
and activities

The transaction provides Axis AMC


access
to
Schroders
global
distribution network and to advise
overseas funds invested in Indian
securities. Axis Bank gets the
opportunity
to
partner
with
Schroders
in
building
asset
management business.

6. Max Life Insurance Co. Ltd.

Reduction of risk and uncertainty,


Tap new markets, Gain expertise,
Acquisition of particular resources
and activities

7. NGOs and educational


institutions

Building brand equity and brand


image

Max Life Insurance's flexible product


suite,
service
excellence,
and
financial strength and internationally
benchmarked training processes,
which ensure delivery of true value
of life insurance to customers while
maintaining Axis Banks core values
of
customer
centricity,
ethics,
transparency,
teamwork
and
ownership
In order to further its corporate
social responsibility as well as
distribute wealth in the society, the
bank has partnered with several
NGOs and educational institutions
and has taken up several causes
under its umbrella.

KEY ACTIVITIES
The below diagram depicts the interaction and transactions of customers at a branch of Axis bank.

KEY SUBSIDIARIES

VALUE PROPOSITIONS
Axis banks key value proposition is based on differentiation on the basis of Max Area Coverage.
1. People - aligning interests
Axis Banks focus on people is core to the client experience it wants to offer.
The biggest challenge in the wealth management industry today is recruiting and retaining the right people,
especially RMs (relationship managers).
2. Product - delivering value
Product is the second cornerstone of Axis wealth management proposition. With consumer research, it was found
that one of the key attributes of the banks brand was its colour being regarded as exclusive and having stature.
Wealth management should meet a clients financial requirements on a single platform. Clients can do their
banking and investments through the retail bank platform, invest in direct equities through Axis Securities, meet
their business fundraising needs through Axis Capital, and satisfy leverage requirements, including IPO funding and
stock option schemes, through Axis Finance.
The bank also tries to provide the best products to its clients in a simple, seamless manner. There is an elaborate
due diligence and research process to distribute only the best investment products across all asset classes.
3. Making research count
Research is the third pillar on which Axis builds value.
The bank has an elaborate process for conducting research and due diligence for all the wealth management
products that it distributes to its clients. A quarterly report is sent to all clients with the banks views on the macro

variables and various asset classes. It also covers key events like the Union Budget and monetary policy
announcements.
4. Building a brand
Brand is the fourth critical element of Axis proposition, as it is essential to the bank expanding its customer base.
It has held special events for Burgundy clients, including opportunities to meet fund managers on the banks
platform to get their views on financial markets.
In practical terms, the wealth management business aims to gain customers from other parts of the bank through
a dedicated acquisition channel.
5. Future proofing
Axis is also preparing for future business models, both in terms of the ways in which it interacts with clients and
how it can use technology to better facilitate these relationships.
A focus on digital is another element of Axis forward-looking approach. The bank also aims to use big data to
segment customers to tailor investment solutions to their stage of life. Commitment to legal and compliance
probity is an issue that Axis believes can also add to its business.
All of this very clearly speaks to the core philosophy of Axis Progress On.

FACTORS AFFECTING CUSTOMER SATISFACTION:

CUSTOMER RELATIONSHIPS
Types of
customers

Type of relationship

Corporate
clients

Formal, business oriented

Individual
account
holders

Close, advisory,
interactions

Customer
Segments

Creation of value for


corporate clients as well as
individual clients
Most important customers
are high net worth
individuals seeking advice
regarding investments as
well as organizations
having long lasting
relationship or partnership
with the bank.

Needs

Quick, hassle free decision making and transactions


Access to information, expert advice and consultations
Reliability
Services offered
Quality of service
Speed of delivery
Rate of services
Ease of doing business

Mass Market- For individual account holders


Niche Market- For special high net worth individuals, as well
as customers belonging to categories like travel oriented,
business investment oriented, etc.Facilities to preferred
customer include
No AQB charges
Relationship Manager
No waiting
3rd Party deposit charges
No draft charges
Special Discounts(extra discounts on gold)

Segmented- Demographic and psychographic segmentation


to tap all segments while catering to each segments
specific needs.

Key
Resources

Channels

Human resources required


should be qualified and
trained.
Intellectual
resources
should be reliable and
verifiable.
Customers mostly want to
be reached via ATMs,
mobile banking, internet
banking, etc in urban
areas.
In rural areas, customers
still prefer the personal
interactions while visiting
banks

LEVELS OF SERVICE

Diversified- The bank offers a wide range of products and


services in order to enable financial inclusion.
Types of resources
Physical presence in terms of ATMs, branches, etc.
Intellectual financial data, forecasts, trends, economic
information
Human capital as in the 37,901 employees
Financial resources and liquidity.

The Bank has a large footprint of 2589 domestic branches


(including extension counters) and 12,355 ATMs spread
across the country as on 31st March 2015.
The overseas operations of the Bank are spread over nine
international offices with branches at Singapore, Hong
Kong, Dubai (at the DIFC), Colombo and Shanghai;
representative offices at Dhaka, Dubai, Abu Dhabi and an
overseas subsidiary at London, UK.

REVENUE STREAMS
Loans

Rate of
Interest

BPLR

14.75%

Housing loan

8.75%

Floating (up to 30 lakhs)

9.25%

Fixed (irrespective of
the amount > 30 lakhs)

14%

Personal Loan

14 21%

Car Loan

9.5 15%

3.7 SWOT Analysis


Strength

SWOT Analysis:Axis Bank


1. Axis Bank has a good image among urban population.
2. It has been showing good growth in the banking industry sector. It delivered a strong 18% growth last
fiscal.
3. It has a diversified portfolio of products and services like consumer banking, credit cards, corporate
banking, finance and insurance, investment banking, mortgage loans, private banking, private equity,
wealth management, mobile banking etc.
4. There has been a constant increase in the market share of Axis in rural markets. It is among the largest
bank in India providing agricultural loans.
5. Axis Bank is among the top three positions with respect to growth in private sector banks.

Weaknes
s

6. It has 2,589 domestic branches and 12,355 ATMs spread across the country. The overseas operations of
the bank are spread across 9 international offices.
1. It has limited branches as compared to its direct competitor like SBI and HDFC.
2. It has less global presence.
3. The share prices of Axis bank have crashed almost 40% in the last 1 year.

Opportu
nity

Threats

4. The market capitalisation is still low.


1. Emerging markets are fast growing regions of the world which will enable Axis bank to grow rapidly.
2. International markets offer Axis bank new opportunities to expand business and increase sales. It can
look to increase its presence to more than just 9 countries it is operating in.
3. With increasing penetration of internet in rural areas Axis can look to increase its presence in the
untapped rural markets.
1. It is facing stiff competition from new entrants. In 2014 RBI gave 23 banking licenses. The intensity of
competition is only expected to go up.
2. Competitors are hard pressed on delivering innovative products and services.
3. The banks business is also affected by an increase in the level of Non-Performing Assets. Given that a
major slice of the income in this major is agriculture and livestock dependent, the incidence of unpaid
loans and NPAs is much higher.

3.8 Competitor Analysis (identify competitors)


3.8.1 Based on Financial indicators
SBI:

Biggest Name in Indian Banking

One of the oldest players in Indian Banking and hence most trusted

Largest network of 13000 domestic branches and 190 offices in 36 countries

Largest employee force with 220,000 people

Manages 390 Billion USD

HDFC Bank:

Largest Market Capitalization of Rs 261,226 crores

Ranked 45th among top 50 banks of India.

Lowest numbers of Non Performing Assets (NPAs)

Continuous innovations in Product offerings and technology up-gradations

ICICI Bank:

Largest and one of the oldest Private player in India

2nd largest bank in Country

Largest Credit issuer in India

Strong Portfolio of Retail and Corporate portfolio.

Strong Industry network

Known for strict lending policies

Kotak Mahindra Bank:

Spectacular Growth due to mergers and acquisitions

Newest big scale player in banking industry.

Highest P/B, P/E, Net Interest Margin(NIM) and Tier 1 Basel Requirement

Payment Banks:

Will redefine banking in India with new means of reaching customers

Entry of big players like Aditya Birla, Reliance, Airtel,Tech Mahindra, Vodafone etc.

Offer saving and remittances services at low transaction cost

Low cost platform suitable for acquiring rural customers

Effective mode of transferring subsidies (DBT)

Metric

Axis Bank

Industry Low

Industry
Median

Industry High

Est P/B

NA

0.68 (SBI)

1.13

3.48 (KTK)

Est P/E

11.16

8.25(ICICI)

11.16

31.65(KTK)

NIM

3.61

1.79(IDBI)

2.78

7.06(KTK)

ROI

17.87

3.65(OBC)

9.80

21.27(YES)

Tier 1 Ratio
(%)

12.14

7.53(UBI)

9.67

16.20(KTK)

4 Future Growth Strategy for the organization


4.1

Portfolio Analysis

BASED ON BCG MATRIX

With almost 24% growth in the net profit in the previous financial year and a relatively high market share, Axis
Bank can be considered to be a star in the BCG Matrix.
4.2 Companys Strategic Roadmap for future
Near Term (<- 2 years)

Mid Term (2-5 years)

Long Term (5-10 years)

Growth Areas

Rural Lending

Corporate Credit

Lending to Small
Medium Enterprises

High Level Tasks

Area centric approach in To provide cost effective Extending working capital,


agriculture intensive areas long term borrowings in term loan, trade finance
with
the
presence
of form
of
infrastructure and
project
finance

and

Potential Benefits to be
achieved

decentralised area offices


following a hub and spoke
model.
Increasing
the
retail
customer base through
financial inclusion.

Rewards

The bank can consolidate


its position in government
to consumer payments,

Risks

Increase in the number of


non Performing Assets.

Key Success Factors

Governments
focus
on
agricultural
and
rural
sector.

bonds

facilities to Small and


Medium Scale industries.

Actions by cooperates to
improve
their
liquidity
position by selling non-core
assets provides the bank
an opportunity to show
higher growths.
Loan to Indian corporate
and
their
subsidiaries,
which has already shown a
growth rate of 22% in the
Financial year ending 2015.
Economic slowdown may
hamper
the
future
prospects of the corporate.
With the Corporate taxes
set
to
come
down,
Corporate will be more
focused on expansion.

Growth in SMEs and MMEs


advances.

Bank can achieve the


Priority
sector
lending
requirements.
Risks of
debts.

increasing

bad

Governments
boost
to
SMEs and MMEs in the
budgetary allocation.

KEY CONCERNS FOR THE FUTURE:

Further downturn in economic activities and growth may act as a vicious cycle on investment in Capex and
consumer income and spending, which may impact the earnings of the Bank and its asset quality.
Recent increment in provision on restructuring as per the RBI new guideline may impact the profitability.
Issuing of new Banking license may increase competition which may affect the Banks margin.