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Axis Bank evaluating the acquisition route to scale up microfinance business

Axis Bank managing director and chief executive Amitabh Chaudhry said the bank has studied the market but has not found a perfect match yet. "We are evaluating opportunities all the time," he said, adding that the microfinance firms, which are doing well and can be a good fit, are mostly overvalued. "Nothing is on the cards at present."

, ET Bureau|
Dec 11, 2019, 06.02 PM IST
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In terms of overall business expansion, Axis is in the process of opening more branches this fiscal. It has opened 250 in the first six months and is on course of opening another 300 by March to raise the tally from 4,284.
Kolkata: Private sector Axis Bank is evaluating the acquisition route to scale up microfinance books while its rivals such as Kotak Mahindra Bank and IndusInd Bank have already taken strides in this segment.

Axis Bank managing director and chief executive Amitabh Chaudhry said the bank has studied the market but has not found a perfect match yet.

"We are evaluating opportunities all the time," he said, adding that the microfinance firms, which are doing well and can be a good fit, are mostly overvalued. "Nothing is on the cards at present."

He said the bank has Rs 3,200 crore worth of microfinance portfolio.

IndusInd Bank's acquisition of Bharat Financial Inclusion has helped it expand its rural outreach and grow the micro-loan business. This was preceded by Kotak Mahindra’s acquisition of BSS Microfinance, and IDFC Bank’s Grama Vidiyal Microfinance deal in 2016 to mention a few.

In terms of overall business expansion, Axis is in the process of opening more branches this fiscal. It has opened 250 in the first six months and is on course of opening another 300 by March to raise the tally from 4,284.

The bank has raised Rs 12,500 crore in qualified institutional placement last quarter, which Chaudhry said is "good for 20% CAGR for the next three years".

He said merger of public sector banks would throw bigger opportunities for private banks to grow as merger takes long time to internalise.

He expects economic turnaround in next couple of quarters even as general stress in banking remained elevated. Axis is carrying funded and non-funded stress book of around Rs 10,000 crore.
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