Amitabh Chaudhry, as the chief executive of Axis BankNSE 0.40 %, is yet to deliver his first quarterly earnings. But the stock is up 25% since he chose banking over insurance.
Such investor trust in one’s leadership is a dream start, but it can be as much a burden when it comes to meeting expectations.
Change is writ all over. From priorities, to new management team, and to the dos and don’ts –– all are new to a bank that moved from being a conservative lender to an aggressive financial conglomerate focused on growth under Shikha Sharma for nearly a decade.
Targets are set. Deliver a return on equity of 18% on a sustainable basis, up from the 7.3% in December 2018. A conservative provisioning policy that can depress profits now, but comforts investors. No more infrastructure and project funding. Raise share of working capital loans to industry average of 60% from 35% now. And in retail, reduce the mortgages where returns are getting squeezed.
“He’s driving us all hard,” says an insider who did not want to be named. “It’s result oriented. B ..
What does an investor think?
“New management is making the right moves,” says Kunal Shah at Edelweiss Securities. “The structural changes will strengthen the bank’s robust franchise.”
THE TRANSFORMATION
Many managers carry the continuity mantra for the organisation to keep going without disturbing the existing structure. But Chaudhry is different. He’s turning Axis Bank on its head.
Its management structure is undergoing a transformation that’s com ..
“The bank has reorganised the reporting structure and while doing so, has yanked out the compliance, risk management and audit functions out of the business (both coverage and products), reporting directly to the MD & CEO,” says Nilanjan Karfa at Jefferies. “Separately, the bank has also segregated jointly reporting groups of audit and risk to create ownership.”
A vital hire in the entire set-up is 64-year-old Deepak Maheshwari, a banker who cut his teeth at State Bank of India, and ..
“A number of insurance companies have approached us to take a large stake in their businesses and become a manufacturer,” says Chaudhry. “There is value in being a manufacturer. If you want to be a long-term partner, commit ourselves into a company where we have a large equity stake, then we need to get some share for that as well. A number of options are on the table.”
Axis is already the biggest distributor of insurance policies of Max Life. The banking channel contributes more than h ..
Such investor trust in one’s leadership is a dream start, but it can be as much a burden when it comes to meeting expectations.
Change is writ all over. From priorities, to new management team, and to the dos and don’ts –– all are new to a bank that moved from being a conservative lender to an aggressive financial conglomerate focused on growth under Shikha Sharma for nearly a decade.
Targets are set. Deliver a return on equity of 18% on a sustainable basis, up from the 7.3% in December 2018. A conservative provisioning policy that can depress profits now, but comforts investors. No more infrastructure and project funding. Raise share of working capital loans to industry average of 60% from 35% now. And in retail, reduce the mortgages where returns are getting squeezed.
“He’s driving us all hard,” says an insider who did not want to be named. “It’s result oriented. B ..
What does an investor think?
“New management is making the right moves,” says Kunal Shah at Edelweiss Securities. “The structural changes will strengthen the bank’s robust franchise.”
THE TRANSFORMATION
Many managers carry the continuity mantra for the organisation to keep going without disturbing the existing structure. But Chaudhry is different. He’s turning Axis Bank on its head.
Its management structure is undergoing a transformation that’s com ..
“The bank has reorganised the reporting structure and while doing so, has yanked out the compliance, risk management and audit functions out of the business (both coverage and products), reporting directly to the MD & CEO,” says Nilanjan Karfa at Jefferies. “Separately, the bank has also segregated jointly reporting groups of audit and risk to create ownership.”
A vital hire in the entire set-up is 64-year-old Deepak Maheshwari, a banker who cut his teeth at State Bank of India, and ..
“A number of insurance companies have approached us to take a large stake in their businesses and become a manufacturer,” says Chaudhry. “There is value in being a manufacturer. If you want to be a long-term partner, commit ourselves into a company where we have a large equity stake, then we need to get some share for that as well. A number of options are on the table.”
Axis is already the biggest distributor of insurance policies of Max Life. The banking channel contributes more than h ..
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