Message From the MD & CEO


We have embarked and made rapid progress on the ‘One Axis’ ideology which focuses on projecting the Bank’s various businesses and subsidiaries together as ‘One’ that can offer a comprehensive suite of products, services and solutions to the customer.

Dear Shareholders,

As we complete our 25th year of operations, I feel honoured and proud to lead the Bank – a neighbourhood bank striving to serve a billion lives everyday in a meaningful and humane manner. Trust and customer centricity have always been the hallmark of the Bank’s association with its customers.

The Bank has over these years stood by customers as a reliable friend in need – by not only being approachable and available at all times, but also helping them to meet their needs and life aspirations. I would like to thank all my predecessors over the years – Ms. Shikha Sharma, Dr. P. J. Nayak and Mr. Supriya Gupta, for their vision and contribution towards building this great institution.

It is the same feeling of warmth and friendliness that is reflected in the Bank’s culture; and was one of the first things that struck me when I joined the Bank six months ago. I believe that our culture is one of the biggest unsung strengths of Axis Bank. This has been one of the key driving forces for us to build a great institution and also ensured that we survive tough times.

Over the last decade, the Bank has gone from strength to strength, and in addition built a lot of hidden gems among its businesses. Let me spell out some of them. The Bank has an extremely strong current account and savings account (CASA) deposits franchise and has grown its loan book over five times in the last ten years to `494,798 crores. Amongst the private sector banks, we currently have the third largest branch network and the highest number of ATM machines in the country. In the credit cards business, where we were not present some ten years back, we are now a strong number four player and have been growing at a much faster pace than the industry leaders in the last five years. We have the country’s third largest merchant acquiring business. In mobile banking, we feature amongst the top players in terms of innovation. We are the largest issuer of foreign exchange cards in the country and are a number three player on the UPI side of the business.

On the Wholesale Banking side, we have built deep relationships across the spectrum with corporates, Small and Medium sized Enterprises (SMEs) and government clients. Our SME business has been built brick by brick into an enviable franchise with extremely healthy metrics. We have one of the largest franchises amongst the private banks in dealing with the government and its various arms. The Bank continues to remain at the top of the leader board in the Debt Capital Market segment for the last thirteen years.

Similar achievements can also be witnessed for the Bank’s subsidiaries, even though we started our innings later than many of our peers. As a group, we are engaged in businesses that are contiguous to banking, such as non-banking finance, retail broking, asset management, and institutional equities & investment banking. Axis AMC set up in 2009 is now among the top 10 mutual fund houses in India. Our broking business, Axis Direct, established in 2011, currently ranks amongst the top three players in terms of active client base. Axis Capital continues to remain one of the best equity capital market franchises in the country. Axis Finance is one of the fastest growing non-banking financial companies (NBFCs) with some of the best returns in the industry. Axis is the only Bank with two Fintech companies as subsidiaries, one in the payments space and the other in the digital invoice discounting space. All these businesses complement the parent Bank’s strategy and allow us to offer our customers a comprehensive offering under the umbrella of ‘One Axis’.

We intend to get our winning mind-set back, re-claim our growth momentum and get our fair share of business from our customers.

However, I must also acknowledge that in the recent years, the Bank has faced some headwinds, especially on the asset quality front due to corporate slippages. The Bank’s strategic bet on project lending to infrastructure sectors like steel and power in the 2010-12 period turned out to be its Achilles’ heel. There was also an increase in operational risks in recent years. Though we have done exceedingly well in some segments, we have not executed well on all fronts consistently. We are not yet out of the woods, but we are cautiously optimistic about the future. We need to learn from the mistakes of the past and ensure that they are never repeated again. We realise changing ourselves will be arduous and time consuming but we also strongly believe we are ready for the battle ahead and have the team in place to overcome any odds.

Over the last six months, I have spent time extensively with the various business units across the Bank. I have also met many of our large corporate customers. Based on these interactions, I do believe there is lot of potential for us to grow and be among the top few players in each of our business segments and aspire for larger market share.

am pleased to state that we have taken some strong and positive strides towards defining our priorities, the goals that we want to accomplish and how we will get there. We intend to get our winning mindset back, re-claim our growth momentum and get our fair share of business from our customers. We also want to strengthen our core technology platform and improve our execution. To achieve these, we came out with an Execution Strategy 2022 for the Bank earlier this calendar year. The strategy pivots around delivery of three important vectors – Growth, Profitability and Sustainability.

At the same time, we have embarked and made rapid progress on the ‘One Axis’ ideology for the Bank and its subsidiaries, which focusses on projecting the Bank’s various businesses and subsidiaries together as ‘One’ that can offer a comprehensive suite of products, services and solutions to the customer. The focus for our subsidiaries would be to attain size and scale, for which we would continue to invest in them over the next few years.

As we embark on achieving the goals set in our 2022 vision, the strategic direction of ‘One Axis’ will serve as a bedrock to drive brand synergies across the Bank and all its subsidiaries. We will start by delivering a consistent brand identity across our branches, subsidiaries and all our digital touchpoints. Over the next few months, the messaging across our products and our verticals will also align with the above strategic direction so that we create a force multiplier effect for the brand. More importantly, we are an industry built on the foundation of trust and one of the best ways to improve trust is to come across as consistent and unified in our language and approach to our customers.

We now have the entire senior management team in place to execute the strategy and convert our aspirations into reality over the next three years. We have reoriented the organisational structure that would enable us to streamline and simplify our functioning and bring in greater

accountability, productivity and efficiencies. We have also made considerable progress in building cost consciousness across the Bank, and expect to improve our cost efficiency over the next few years.

We have incorporated the learnings from the last credit cycle to improve our policies and processes. We have raised the bar further for the credit filters applicable to new credit proposals and strengthened our early warning systems. As a Bank, we are looking to move towards a more conservative view on provisioning, compliance and risk. In retail, our provisioning norms are more conservative than the RBI prescribed norms, on the wholesale side, we are increasing the level of provisions we hold against some weak, yet standard stressed assets.

Moving on to financial performance, the profitability and the asset quality metrics for the Bank in fiscal year 2019 improved materially after having witnessed two consecutive challenging years. The Axis franchise delivered healthy operating performance with core operating revenue growth of 21% and moderation in operating expenses growth. The Bank continues to have a strong balance sheet with one of the best provision coverage and capital adequacy ratios of 77% and 15.84%, respectively. Our subsidiaries had another good year as they continued to gain scale and market share in their respective segments.

On the wholesale side of our business, we have been focussing on portfolio diversification, reduction in concentration to select sectors and project loans and have further increased our focus on transaction banking and working capital business. The performance of the corporate segment in fiscal 2019 improved as compared to the past few years with steady decline in the low rated ‘BB & below’ outstanding pool, significant decline in corporate slippages and stabilisation of corporate credit linked fees.

We have reoriented the wholesale segment. The credit underwriting function has been taken out from the businesses and has been made an independent function. Product specialists and business relationship responsibilities have also been segregated to ensure sharper focus on client coverage and product groups. We follow a risk adjusted return philosophy in the wholesale bank and would focus on growing our midcorporate and commercial banking book. In the commercial banking segment, we are focussing on building a relationshipbased model with SME and current account business customers to drive growth across both assets and liabilities.

Execution Strategy 2022


The first deliverable we put out has been to improve our deposit growth materially to fund our strong loan growth aspirations. We want to step up growth in the Wholesale Bank, sustain the momentum in the Retail Bank and want to scale up our subsidiaries materially. We also want to be in a leadership position on the payments side of the business.


We intend to make significant portfolio mix choices based on an assessment of Risk Adjusted Return on Capital, or RAROC. We will relentlessly focus on cost rationalisation and reduce the Bank’s credit costs sustainably below its long-term averages.


We would focus on disciplined execution, and aim to build a sustainable and credible business model. We intend to invest in strengthening our core around technology, processes, operations, digital and analytics. An important element in building a sustainable franchise is to embed conservatism in our internal policies and practices.

The Bank’s retail franchise continues to remain robust with a healthy growth in loans, fees and retail deposits. Axis continues to remain a strong customer centric bank and has shifted its deposit strategy to focus on getting higher CASA plus retail term deposits from earlier focus on CASA. During the year, we added 347 branches to take our domestic branch distribution network to 4,050 branches. For us, branch banking continues to be an integral part of our growth strategy given the role of branches in deposit mobilisation from new customers, driving the Bank’s acquisition strategy across products and providing customer service and building trust. However, the branch formats continue to get smaller with enhanced productivity led by automation and digitisation of service operations.

While delivery of growth and profitability is important, sustainability forms the foundation of the Bank’s strategy

Our wealth management business Burgundy with assets under management of over `132,702 crores, has done exceedingly well over the last few years and now features amongst the top wealth management businesses in the country. We intend to expand the franchise and build a leadership position in the space. The Bank’s ability to innovate and offer right product proposition to its customers has helped the retail loan book to grow over five times in the last ten years to `245,812 crores, with a 50% share in total advances. We have achieved significant diversification within our retail portfolio mix with a strong risk management architecture that has ensured that our asset quality in retail has been much better than peer average. The Bank has always been ahead of the curve in terms of building its digital capabilities and has made significant investments in technology and digital analytics to underwrite, manage risk outcomes and optimise costs. During the year, the Bank increasingly started offering preapproved loans and stepped up the pace of digital lending. The contribution of digital lending in personal loans increased to 43% from 22% in the last one year.

Axis Bank continues to remain committed towards promoting a less-cash, digital economy and enjoys strong market position across most digital payments spaces in India. The Bank continues to engage in partnership driven innovations to provide its customers with a differentiated payments experience and drive the Digital India mission. During the year, the Bank’s Kochi1 Card, became the country’s first inter-modal transit card while the Raipur Smart Card project was also initiated to offer digital payment solutions to the citizens of Raipur. The Bank also launched ‘Axis Tap & Pay’, a mobile application for making contactless payment at merchant terminals; as well as India’s first of its kind in-home ‘Smart bill pay’ initiative that allows users to pay their utility bills by scanning a QR code.

The Bank has traditionally used Savings Accounts as a product to start its relationship with customers and then build on it by cross-selling other products and services. Though that has not changed substantially over the last ten years, we are increasingly looking beyond deposit base for customers. We are now looking to leverage other platform businesses of the Group for cross-sell opportunities.

We plan to invest significantly in setting up a Digital Bank. Our idea here is to have a full team with all the requisite banking as well as digital expertise and skill sets required to rethink traditional banking processes. It will start afresh, end-to-end customer journeys, which will be completely digital. This will, however, take time to fructify and we will share our progress over the coming years.

The Bank continues to invest in enhancing employee capabilities and provide career development opportunities to its employees. We have made sure that the communication on GPS strategy and vision of creating ‘One Axis’ is consistent within the internal organisation as well, and that everybody in the Bank knows what they have to do. The organisation structure and the KPIs have been realigned to ensure direct accountability, greater differentiation and focus on developing relationship-based long-term business model instead of focussing on shorter term targets.

During the year, the Bank revamped its internal job posting process to allow internal talent to take on leadership positions based on their merit irrespective of age and tenure. The Bank also launched an internal portal to allow employees to seek careers across departments and subsidiaries within the Axis Group.

Axis Bank has always believed that its long-term success depends on the progress of communities and the people we serve. The Bank continues to play an active part in extending credit to the economically active but under-banked rural population, particularly women, through its retail microfinance initiative ‘Axis Sahyog’. Axis Bank Foundation, in its 13th year of operations, continues to work towards providing sustainable livelihoods and creating value for the target communities through its various integrated rural skill development and educational programmes.

During the year, ‘Axis Dil Se’ -- the Bank’s CSR initiative in partnership with 17000 ft Foundation, 108 schools in the Leh and Kargil districts of Ladakh were adopted by 20 senior Axis Bank leaders for a period of three years – completed its second phase. Under this initiative, the Bank installed ‘Digi Labs’ in schools, which would enable access to the digitised curriculum both for the students and the teachers. Also during the year, the Bank played active part in providing disaster relief to over 400 flood affected families in four regions in Kerala.

In the recent years, driven in part by some unexpected negative surprises at the Bank, we have dented the trust of investors. We need to win it back.

The Bank won the ‘Excellence’ certificate in Corporate Social Responsibility category at the prestigious CII ITC Sustainability Awards 2018 and was included in the prestigious FTSE4Good Emerging Index for the second consecutive year in 2018 in recognition of its Environmental, Social and Governance (ESG) practices.

In recent years, driven in part by some unexpected negative surprises at the Bank, we have dented the trust of investors. We need to win it back. The only way to win it back is to have a business model, which sustains and generates credible financial outcomes quarter after quarter over a long period of time. Our aspiration is to deliver around 18% return on equity (ROE) on a sustainable basis. The reduction in credit cost to below our long-term averages, portfolio choices driven by a risk-adjusted returns framework and improvement in operational efficiency would be the key drivers for RoE improvement over the next three years. Though it seems a tall order, the Bank had been delivering ROEs in excess of 18% few years back and hence we aspire to do it again - on a sustainable and consistent basis.

India continues to be a fast-growing economy with significant opportunities and possibilities. From the perspective of the financial industry as a whole, the liquidity issues faced by some of the nonbanking financial companies and housing finance companies over the last year can create some friction going ahead, but it presents opportunities for banks. The banking industry has seen return of credit growth and pricing power on account of shift in credit demand from NBFCs and bond markets back to banks. Banks with a healthy capital position, NBFCs with a robust parentage and financial intermediaries with significant market share are well placed to grow profitably, at a faster pace than their peers in their respective industries. In this context, ‘One Axis’ Franchise with its presence across business segments is uniquely positioned to leverage this opportunity and grow at a faster pace. Great product mix, vast physical footprint, cutting-edge digital capabilities, robust corporate governance practices and one of the most valuable brands in India - all these combined open many possibilities for the Axis Franchise in the near future.

I believe that Axis Bank is a great franchise with great culture and great set of people. If we execute well, we have the potential to improve our market share rankings without sacrificing anything whatsoever on our credit and risk management practices. While delivery of growth and profitability is important, sustainability forms the foundation of the Bank’s strategy. We want to build sustainability in our business performance and operations with disciplined execution and conservatism at the core. However, one thing that still concerns me is the level of control and confidence we have on operational risk parameters. Any large bank will have a vast number of systems and processes and to reach the level of efficiency, control and monitoring that we have in mind will take time, but we are at it relentlessly everyday, improving bit by bit. We also need to ensure that the quality of our wholesale book improves materially over the next few years. We cannot afford a repeat of what we went through in the last few years. That would also require a change in how we think about risk and how we proactively manage it. Another area of work would be the tone from top on compliance. We cannot compromise on doing things right and doing them right all the time, even at the cost of losing business. We need to do a better job of saying no to businesses and deals.

I would like to take this opportunity to thank my colleagues for believing in Axis and the vision for the Bank. I am also deeply grateful to all the customers and shareholders for having stood by us and showing their faith in us all these years.

Warm Regards,

Amitabh Chaudhry