The Hindu Business Line : To continue focus on retail advances

Hyderabad, April 21 Riding on the impressive performance it posted in the last fiscal, Axis Bank plans to focus on retail advances, continuing the profitable business model being pursued at present.

“The strong growth in advances and decline in cost of funds coupled with increase in fee-based income were key drivers for growth in 2007-08. We hope to repeat the show this year too by focussing on growth in advances and retail business,” Dr P.J. Nayak, Chairman and Managing Director, Axis Bank, told Business Line over phone from Mumbai.

The bank would also continue to focus on bringing down the cost of funds further in the current fiscal. “While there was no big change in the interest rates on deposits, we could bring down the cost of funds to 5.82 per cent in the fourth quarter ended March 2008 from 5.92 in the corresponding quarter last fiscal. We will continue efforts in this direction,” Dr Nayak said.

The bank is also not alarmed by the trouble brewing in the derivatives transaction, cross currency options and swaps in particular. “Out of 188 outstanding derivatives transactions structured by us involving Rs 673.55 crore marked-to-market loss for companies, only two are in court and we have made full provision for it. I don’t foresee any trouble at this moment,” he said.

Axis, however, stopped selling cross-currency options and swaps while continuing other forms of derivatives business. It also believes that shedding of bulk deposits would be profitable in the long-run. “The 71 per cent and 35 per cent growth in the demand and terms deposits in 2007-08 will be taken forward,” he said.

FOCUS ON ASIA

To increase its global operations, Axis will specially focus its foreign business in Asia in view of the increasing economic activity in the region. “Next month, we will be opening our Web office in United Arab Emirates. There will be more action in the future,” Dr Nayak said.

The bank now has four international offices — branches in Singapore, Hong Kong and Dubai and a representative office in Shanghai.

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To continue focus on retail advances