Citi has analyzed the operational performance of Axis Bank, highlighting key aspects that could impact its near-term and long-term growth. The report notes a rise in delinquencies within personal loans (PL), credit cards (CC), and linked accounts, although wholesale, SME, and secured portfolios remain stable. Citi expects a stabilization period of 8 months for personal loans and 15 months for the cards portfolio.
The bank’s aggressive write-off policies have accelerated credit cost management but may moderate growth in retail unsecured loans. In terms of deposit growth, Citi suggests it will constrain loan growth, with deposit mix changes likely impacting deposit costs as the bank aims to stabilize the loan mix.
Citi also highlighted Axis Bank’s rural and small business focus, alongside SME and mid-corporate banking, as key areas of interest. However, seasonal agri stress during Q1 and Q3, coupled with treasury gains potentially impacted by new investment guidelines, could weigh on performance.
The bank’s strategy prioritizes core operating profit while maintaining discipline in deposit cost and quality over quantity to achieve sustainable growth.
Disclaimer: The above is for informational purposes only. Please consult a financial advisor before making any investment decisions.