Axis Bank well capitalised with self-sustaining capital structure to fund growth: MD

Axis Bank's Managing Director and CEO, Amitabh Chaudhry, has affirmed the bank's strong capital position and self-sustaining capital structure, enabling it to support organic growth. Chaudhry expressed confidence in the bank's ability to outpace industry average growth, particularly in the Micro, Small, and Medium Enterprises (MSME) segment, with an expected increase of 400-600 basis points in the current fiscal year.

To facilitate its expansion, the bank possesses ample capital resources for the ongoing financial year. Chaudhry elaborated, stating, “Our overall capital adequacy ratio, including profit, stood at 17.84 per cent with a CET 1 ratio of 14.56 per cent. The Bank accreted 18 bps of CET-1 capital in Q2 FY24 and 54 bps in H1 FY24. Axis Bank is well capitalised with a self-sustaining capital structure for funding organic growth.”

In March, Axis Bank successfully concluded the acquisition of Citibank's consumer business and non-banking financial company (NBFC) consumer business for Rs 11,603 crore. This transaction excluded Citi's institutional client businesses in India, bolstering Axis Bank's credit card portfolio to become one of the top three card businesses in the country, with a total card base of 8.6 million.

Regarding interest rates, Chaudhry acknowledged the persistence of high rates in the foreseeable future, a sentiment echoed by RBI Governor Shaktikanta Das. The central banks of various nations have raised key policy rates in response to rising inflation, with the Reserve Bank of India having cumulatively raised its short-term benchmark lending rate (repo) by 250 basis points since May 2022. However, the RBI paused its rate hike in February this year, maintaining the repo rate at 6.5 per cent.

(With PTI Inputs)