MC Exclusive | Third term as Axis Bank chief will be about continuing our journey: Amitabh Chaudhry

How will your third term be different from the first two?

We had set an agenda when I joined the bank in 2019 and we called it the GPS strategy - growth, profitability and sustainability.  It came to be known as House of GPS. An 18 percent return in equity was on matrix. We delivered that in eight of the nine quarters, as we look back from here, partly helped by benign credit cost. But one of the most important elements of that strategy was not only making the bank more relevant but more sustainable, creditable and an all-weather franchise. The only way you can get there is by improving the overall market positioning. We were the No 3 bank at that time and still is. But, can we look at some businesses where our market share on an incremental basis moves to No 1, and become No 1? That was what we wanted. It's a long journey. A lot of what we are doing is not a 3–6-year target. We have a  great franchise, a great platform. I tell my teams that we just need to win more and more as we've come a long way. The third term will be all about just continuing that journey. Execute better, create more sustainability, win and become number one in more businesses, continue to invest for the future and find those opportunities which will present themselves. For example in the merchant acquisition business, we were ranked a distant third. But, in the last two years, our incremental market share has been upwards of 30 percent and now we have moved to No 1 position. We have 20.6 percent market share. We now have 31.5 percent market share in the UPI space. It was 16–17 percent when I joined. We need to keep expanding that space more, so that our competition feels more uncomfortable.

How would you want your investors, regulator and other stakeholders to remember your nine-year tenure at the bank?

Going after market cap might not be the best thing to do, because then you might end up taking decisions which are more in the short term and not in the long run. We just need to ensure that the House of GPS is achieved and market cap could come as an outcome of that strategy. We have definitely proved to investors that we are a proposition they need to look at quite seriously in terms of returns they can make. We need to bring in more consistency in our numbers. Our volatility is a bit more than what I would want. Second, there is a lot more that we can do as a franchise on the corporate salary side for deposits. As far as regulators are concerned, we want to be perceived as a bank where Axis Bank will not do something, which the regulator will look at and wonder why this is happening in this bank. We have restructured and added people on our board which reflects that intention. We will continue to go in that direction.

After six years as MD and CEO of Axis Bank and another term to go, how important is scale to now?

We have to be aware of where we stand, in context with some of the others out there. It is not just about size or market cap, though all of them are important. But it's also about the respect, what customers think about you, and so on. That's why we launched the customer obsession project. In our defined spaces, let's say in customer obsession, I want to become number one. Can we get there? It’s the journey we have traversed and how far we have come, and it's only a matter of time that if we keep executing, we will get there. It is no rocket science. It's just a lot of hard work and intent.

Max life is rebranded into Axis Max life. Your stake is at 20 percent now. Would you want to increase your stake to beyond 50 percent at some point?

It will involve a lot of capital to increase Axis’s stake to 50 percent at this stage. It might not make sense. We're quite happy where we are with Max; we have the right to appoint the chairman and a few more board seat. We see our role as shareholders, partners, and as someone who they can learn from based on our experience. They (Max) are the ones who said that they would want to rebrand themselves as Axis Max.

What about the other subsidiaries, especially Axis Capital and Axis Finance?

We don't see a problem in Axis Capital as such. There is retain brokerage done in one subsidiary and institutional brokerage in another. Let's see what the RBI comes back with. On the NBFC side, the RBI is quite clear that the demarcation between NBFCs owned by the bank, and the bank should be very clear.

Are you open to merging Axis Finance with the bank?

We have still not decided that and it will be too early to speculate now. We have been infusing equity into Axis Finance consistently. The RBI has been telling us that they would not like us to continue putting money into this subsidiary. At some stage, we (RBI) would like you (Axis Bank) to dilute your shareholding. This particular circular (October 2024) is asking for even more clear denunciation.