With green shoots becoming visible, Axis Bank expects double digit growth in credit in the next 18-24 months, according to Rajiv Anand, Deputy Managing Director, Axis Bank.

India’s third largest private sector lender sees GDP and credit growth at 9.5 per cent and 7 per cent, respectively, in FY22. In FY23, Axis Bank has estimated GDP and credit growth at 8.2 per cent and 8 per cent, respectively.

Anand observed that credit growth will be back in double digits by FY24.

“We are clearly seeing growth come back fairly strongly across various sectors of the economy... We do expect this growth to continue into FY23.

“From Axis Bank’s perspective (organisational and balance sheet perspective), we are well positioned to capture opportunities that the market will bring to us over the next many, many years,” he said.

‘Well-capitalised’ bank

He emphasised that Axis Bank is well-capitalised at this point in time and it has the people, processes and technology to be able to service its clients.

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“Tech has been at the core and centre of everything that we do…. We want to leverage this to become India’s leading digital wholesale bank,” Anand said.

“We have also been able to put together what we call ”One Axis” whereby we holistically serve customers across the capital structure and transaction banking franchise,” he added.

Clear growth trends

Anand noted that most high frequency indicators have turned deep- green, showing clearly that growth momentum is well and truly here. This is expected to continue into the months going forward.

“Axis Bank is seeing fairly strong capital expenditure (capex) in renewable energy around productivity linked incentive (PLI) schemes where some of the large corporations have jumped in to be able to create capacity around electronics, solar cells, roads, ports, speciality chemicals and data centres,” Anand said.

“It is fairly widespread at this point in time. It may not be headline grabbing……We do believe that private capex demand in FY23 will be much stronger than we have seen over the last three to five years,” he added.

Positive impact financing

Axis Bank has set a target of incremental financing of ₹30,000 crore for positive-impact sectors by FY26.

This financing, which takes into account environmental, social and governance (ESG) factors, is expected to lead to a more inclusive and equitable economy, thriving community and a healthier planet.

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Under ESG, Axis Bank has also set a target of incremental disbursement of ₹10,000 crore by FY24 under Asha Home Loans for affordable housing.

Further, the bank wants 5 per cent of its retail two-wheeler loan portfolio to be electric by FY24. Axis Bank is offering 0.5 per cent interest discount for new electric vehicle loans.

As part of ESG, Axis Bank is integrating ESG into risk management at the enterprise level, expanding ESG risk coverage in credit appraisal, and scaling down exposure to carbon-intensive sectors in its wholesale lending portfolio.

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