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Business News›Industry›Banking/Finance›Banking›Axis Bank expands corporate play beyond loans, shuns price war

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Axis Bank expands corporate play beyond loans, shuns price war

Synopsis

Axis Bank is broadening its corporate banking services beyond just lending. The lender targets fee income and low-cost deposits from corporate ecosystems. It handles collections, payments, trade finance, and salary accounts for businesses. Investment banking and wealth management services are also offered to companies and their promoters. This strategy aims to build liability and fee franchises by managing more corporate cash flows.

Reuters

Mumbai: Axis Bank is widening its corporate banking platform beyond lending, targeting fee income and low-cost deposits from corporate ecosystems while refusing to chase loan growth through aggressive pricing, its wholesale banking head Vijay Mulbagal said.



He told ET in an exclusive interview that the lender is targeting business beyond corporate credit by handling collection, payments, trade finance, taxes and salary accounts while also offering investment-banking and wealth-management services to companies and their promoters.



Also Read: Banking sector in strongest position to undertake reforms, high-level panel coming soon: FM Sitharaman

"Every corporate allows us an opportunity to take care of not only its requirements but also its ecosystem, which includes dealers, suppliers and employees, as well as its buyers and sellers outside India," Mulbagal said. "Everybody has a wallet, but a corporate wallet is a lot more diverse."



Axis Bank is using its corporate salary franchise, investment-banking arm Axis Capital and Burgundy Private wealth-management platform to expand relationships across corporate groups.




The bank is also pursuing supply-chain opportunities through factoring, dealer financing and supplier financing. As more corporate cash flows pass through Axis Bank, the lender expects to build its liability franchise, earn transaction fees and generate floats.

Also Read: Axis Bank commits Rs 104 crore to Ashoka University to strengthen interdisciplinary sciences & research excellence

"Credit growth is also able to give us a good share of liabilities because I handle collection, payments, trade, corporate salaries and taxes," Mulbagal said. "As more and more cash flows go through us, we are able to build our liability and fee franchises."



Axis Bank, however, does not intend to pursue corporate loans solely by undercutting competitors on interest rates.

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