It was around July 2018 when speculations around Amitabh Chaudhry taking over the reins from Shikha Sharma as the MD & CEO of Axis Bank first emerged. Many were quick to dismiss it because Chaudhry was the poster boy of HDFC Life Insurance’s turnaround and was basking in the success of its IPO, indisputably one of the most successful listings in the financial services space till date. By September, the speculation was put to rest and rumours were confirmed. Chaudhry was all set to lead Axis Bank as its new chief from January 1, 2019.
He way 54 years old when he took charge, which made him the youngest CEO among private banks at that time. Perhaps, by virtue of that, he was quickly tagged as the angry young man in the Indian banking sector. Some of the statements and promises he made back then were also reflecting his personality - for instance, his promises to deliver 18 per cent return on equity by FY22.
Axis Bank was at 8.09 per cent ROE in FY19, which dipped to 2.34 per cent in FY20, reflecting the bank’s full-year performance since he took charge. Meanwhile, the Covid shook the world and that was enough for the naysayers to shoot down Chaudhry’s estimates.
“I came with my eyes and ears open and knew there will be challenges. Covid, obviously, did not help. But going through this journey and working with a wonderful set of people has been a great journey, and I have no regrets whatsoever,” he sums up his experience at the bank.
Five years since, and a bit longer than what was estimated, he seems to have done it just right. Axis Bank is among the few stocks, which according to Bloomberg polls, has no sell recommendations; only two neutral views from analysts. Chaudhry had his eye set on retail and the corporate banking business simultaneously from the start. He brought in bankers from his alma matter and elsewhere to rehaul retail banking. Whether it’s the Silver Lining program for senior citizens or Burgundy banking for high net-worth individuals, the bank has something good for everyone today. At the back end, it has redefined its branch banking strategy to make it a deposit-mobilising machine.
None of this would have been possible had Axis not upped its customer service thresholds and, more importantly, its digital offering, which was having a rub off even on the corporate banking business as well – the trouble patch which cost the bank heavily from FY16, and which was a lingering pain even when Chaudhry took over.
You could say Axis Bank is playing the pricing game in corporate loans, especially with the well-rated ones. But the bank’s confidence to play this game, perhaps, has emerged from its tech stack, which probably is among the top three across banks. This has ensured that Axis Bank makes up from its transaction business for the pricing. In fact, the strength of the bank’s transaction banking suite gives it the advantage to be very choosy about whom to lend to and to walk away from a deal if it doesn’t match the terms. “We want to be seen as a crouching tiger because we have to watch what is happening in the market; be aware of the changes, the emerging risks, and react accordingly. But as a tiger you want to grab every opportunity, which potentially can come your way.” Watch your risk and react, that is Chaudhry’s mantra.
In the process of transition, a few Axis old-timers chose to move on. While that was some bit of negative press to handle, it didn’t deter Chaudhry from that path he had taken. Here’s a similarity between Sandeep Bakhshi, MD & CEO of ICICI Bank and Chaudhry. Both are life insurance men, practised writing daily cheques, which must be backed by at least 30-year long papers or more. Chaudhry tops with the advantage of technology background, thanks to his stint as MD & CEO of Infosys BPO in the mid-2000s. Did his diverse experiences help him at Axis Bank? Yes, affirms Chaudhry with a smile.
“Diversity helps because you have questions which don’t have easy answers. You can bring perspectives from outside, which people who have been working within the system for long lose because they are in it every day,” he says. “I worked for a foreign bank. I left it and I was out of banking for a long period of time. Banking had changed,” Chaudhry puts it very candidly. “There was a bit of a transition period along with Shika [Sharma], who was very supportive. That doesn’t mean I knew everything when I came on day one”.
Axis Bank and ICICI Bank were always reckoned as institutions among private banks, especially in the corporate lending space. What Chaudhry is working towards is ensuring that the bank be seen as an institution across businesses, and this explains his focus on getting the processes right. Meanwhile, what kept him in the limelight was his M&A pursuit.
Icing on the cake
At a time when critiques were questioning if the bank was indeed going through a turnaround as promised, Chaudhry was gunning for Max Life Insurance. The regulator was quick to water down the deal structure, and that probably showed him the mirror that bank prevails over para-banking. Chaudhry was also swift to change course and look at a more meaningful proposition – Citibank India’s retail business, which came with the plump credit cards business.
The acquisition has comfortably seated Axis Bank’s position as the fourth-largest player in the credit cards space and a prominent player in the wealth management business. Of course, it didn’t come easy for the bank, and it meant taking ₹12,490 crore of one-time hit. It landed the bank in net loss of ₹5,728 crore in March quarter FY23, but it’s turning out to be a price worth paying for in the long term.
“Customer retention has been very high,” says a proud Chaudhry, nearly 10 months after the deal completion. “The second phase, and we’ve hit the road on this, is when we transition from Citi technology system to Axis systems. That will happen sometime next year. There’s a huge team working to ensure that that transition goes well,” he adds.
He’s young and technically has 10 more years left at the bank. But Chaudhry is cognizant that it’s not for him to make the decision. Instead, he’d be happier meandering the bank through a right long-term path. “We should be taking decisions for the long term, and it will create an institution which can sustain itself much better. In the last five years, I’ve constantly reminded myself that if there is a choice between something short term and long term, let’s go with the long term, and if there is a hit which happens because of that, it is okay,” says Chaudhry.
And then what about his aspirations for the bank to move up the league table; something which could be challenged if a divestment-related deal, currently under works, materialises. “Scale is important, but it’s not the only thing, and in the desire for scale, bad things happen. I would like to focus on some specific areas, and scale will come automatically if I am the giving the best customer experience in the industry,” Chaudhry says confidently.
It’s at this juncture that one would wonder if Chaudhry has truly shed his angry young man tag. He’s pleasingly articulate and sophisticated with his thought process, demeanour and the way he puts across points emphatically. “It’s not that he’s any less aggressive than what he was five years ago, but he’s certainly channelised the energy to the bank’s advantage,” said a former senior executive of Axis Bank.
An avid reader and Kindle loyalist, books are Chaudhry’s detox. He’s hooked to Ray Dalio for now, but that’s only after he’s done catching up with his e-mails . “I do read my e-mails, and I don’t let anyone else do it. Especially because there are customer complaints,” says Chaudhry. His team say he’s up to date with every customer complaint, and won’t let go till it’s sorted. A passionate, focussed and measured banker – that should best sum up Amitabh Chaudhry.