Anticipating an increase in capital investment and are optimistic about the SME sector: Rajiv Anand, Axis Bank’s executive director
Globally, a portion of the stimulus pushed in by central banks will go toward consumption, while another portion will go into infrastructure construction.
While most other banks aim to take it easy, Axis Bank aspires to become a wholesale banking leader. Why is this the case?
As the economy continues to gather up momentum, all the corporate banks, including Axis Bank will have to play a vital role. We have the franchise, the capital, the risk appetite, the people, and the products to assist our corporate clients in growing their businesses.
When do you predict the CAPEX cycle will soar up?
Globally, a portion of the stimulus pushed in by central banks will go toward the consumption of capital investments, while another portion will go into infrastructure construction. As a result, we will see demand for a variety of products and services. In this scenario, India will experience an increase in private capital expenditure as well as capital investment. Capex in industries such as steel and cement is increasing.
We saw that you are focused on mid-corporates and have an operations plan for the same. Is there a strategic move toward mid-sized corporations?
Mid-corporate clients are those with a turnover of Rs 250 to Rs 1,000 crore. When compared to the total lending share, we have a lesser share here. This is something we are working on. This market appeals to us for a variety of reasons. The possibility of capital investments is vast and diverse, spanning regions and industries. This is consistent with our primary idea of granulating risk. We also plan to add to this market our best-in-class transaction banking capabilities.
We will continue to cooperate with significant corporations that we have known for a long time. We aim to provide a wide range of services to them and have invested in people and technology. We strive to be the preferred transaction bank for our business clients. The fact that our market share in goods like FX, LCs, GST payments, and so on. Last year, A- and better clients received % of our total loans. This will not change.
Do you think your wholesale book will do better this year than last? Will you be able to increase by double digits this year?
We routinely tell the Street that we will outperform the industry by 500-600 basis points (bps). And we are convinced that we will do so in the future.
How do you think the second wave will affect asset quality?
Corporate credit books have been recognising stress on their portfolios for a long time. Corporate balance sheets have been strengthened by raising and deleveraging. We do not see high levels of risk on corporate portfolios under these conditions.