Axis Bank Aims to Boost Retail Operations in Smaller Cities

Strategic Insights -

Axis Bank, the country's third-largest private sector bank, is seeking to increase its retail operations by targeting smaller cities. The bank plans to raise the share of retail loans to 30% of total loans from the current 21% in the next three years. This move is expected to benefit the bank's consumer banking business, which is driven by credit cards, auto, and home loans. With a strong presence in smaller towns, the bank aims to tap into its large customer base of about 1.3 crore to sell retail loan products.

Key Takeaways:

  • Axis Bank aims to increase its retail loan share to 30% of total loans from 21% in the next three years.
  • The bank has set up 85 retail lending offices to process loans in towns such as Bhavnagar, Belgaum, Jhansi, and Rohtak.
  • Tier II and Tier III centers and smaller cities have emerged as drivers of incremental loan growth, with around 60% of new business coming from these centers.
  • The bank has a customer base of about 1.3 crore, which will be tapped to sell retail loan products.
  • Credit cards, auto, and home loans are expected to drive the consumer banking business of the bank.
  • The bank entered the credit card business in 2007-08 and has about 8 lakh card customers, with an amount outstanding on cards of approximately ₹500 crore.
  • The bank has seen a revival in credit card business after the 2008 downturn, with spend per active card increasing to ₹7,500 from ₹6,000 crore in the past 15 months.
  • The net credit loss for the industry in cards business had slipped to a low of 8% from the peak of 25% in 2008.

Statistics:

  • 30%: Share of retail loans in total loans Axis Bank aims to achieve in the next three years.
  • 21%: Current share of retail loans in total loans for Axis Bank.
  • ₹29,343 crore: Axis Bank's retail loan portfolio at the end of September.
  • 60%: Proportion of new business coming from Tier II and Tier III centers and smaller cities.
  • 1,200: Number of Axis Bank branches, with half of them located in smaller towns.
  • 85: Number of retail lending offices Axis Bank has set up to process loans.
  • 8 lakh: Number of Axis Bank credit card customers.
  • ₹500 crore: Amount outstanding on Axis Bank credit cards.
  • ₹7,500: Spend per active Axis Bank credit card in the past 15 months.
  • ₹6,000 crore: Spend per active Axis Bank credit card before the 2008 downturn.
  • 8%: Net credit loss for the industry in cards business after the 2008 downturn.
  • 25%: Peak net credit loss for the industry in cards business in 2008.

Sources:

  • Axis Bank sources: no specific date or publication mentioned.
  • Axis Bank spokesperson Jairam Shridharan: no specific date or publication mentioned.