PremiumPrivate sector lender Axis Bank will keep its focus on scaling up subsidiaries to let these companies gain more prominence in their respective segments, chief executive Amitabh Chaudhry said in its FY21 annual report.
“...our focus still continues to be on further scaling up the subsidiaries so that they gain higher market share in their respective businesses," said Chaudhry in his message to shareholders.
The bank has eight domestic subsidiaries, one in the UK and another step-down subsidiary in the US.
He said the bank is currently one of a kind full-service wholesale bank that offers varied solutions across all financial services. These include traditional banking products, debt capital markets, investment banking to non-banking financial company (NBFC) and retail banking products like Burgundy wealth management, salary and trust services, forex and commercial credit cards.
“During the year, our various business segments within retail and wholesale bank collaborated with our subsidiaries to provide solutions to our clients, thereby deepening the customer relationships further," he said, adding that the bank has, over the last two years, strengthened capabilities across subsidiaries by strengthening the senior management teams, developing innovative product offerings and widening the distribution reach.
According to Chaudhry, the rigour and rhythm and concerted efforts made by teams collectively as “One Axis" have started reflecting in the superlative financial performance of the domestic subsidiaries that together delivered total profits of ₹833 crore, up 75% year-on-year (y-o-y).
“Axis AMC continued to grow faster than the industry to deliver 2x growth in profits while our retail brokerage subsidiary delivered 10x growth in profits. Axis Capital continued to maintain its dominance in equity capital markets with 52 deals. Axis Finance too delivered profitable growth with return on equity (RoE) of 14.6% and healthy capital adequacy ratio of over 20%," he said.
Even as investments in operating subsidiaries over last two years have remained flat at ₹1,815 crore, these operating subsidiaries delivered 17% compounded annual growth rate (CAGR) in net worth, said Chaudhry.
He said that during the year, Axis Securities acquired the customer trading accounts of Karvy Stock Broking to become the third-largest player with total customer base of 3.6 million. The bank also completed acquiring a stake in Max Life Insurance to become a co-promoter in India’s fourth-largest insurance company.
That apart, he said that the bank has made strong progress in digital banking initiatives. The bank now has 800-plus people fully dedicated to digital transformation, including an in-house full-stack technology team of 110 people in roles across design, front-end and back-end development, DevOps, quality assurance, among others.
“During the year, we started a multi-year technology transformation programme that will accelerate our journey towards our goal of being a sustainable future-ready bank," said Chaudhry.
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