In the wake of the Covid-19 pandemic, Axis Bank Ltd’s digital channels have aided the private bank’s deposit and retail lending business. According to the bank’s investor presentation for Q2 FY21, the share of digital sourcing for deposits and loans increased significantly. During the first half of this year, 73% of the banks’ fixed-deposits, 72% of savings accounts, 58% of personal loan disbursements and 52% of credit cards disbursed or opened were sourced digitally. In comparison, around 59% of fresh savings accounts and 43% of fresh personal loans were sourced through digital channels in the previous year.

“During the quarter we launched our tech transformation project. We continue to invest heavily in the digital side and make progress on our digital banking strategy. We are focused on scaling direct to consumer digital products and to enable our staff digitally,” Amitabh Chaudhry, managing director and CEO, said during a media call. The bank now has an in-house tech team of 110 people, he added. 

• Mobile Application Spends: Up by 71% to over ₹2.33 lakh crore in Q2FY21, from a little over ₹1.36 lakh crore in Q2FY20, with 87% of transactions during the quarter taking place digitally up from 80% in the previous year
• UPI transactions: Processed over ₹1.04 lakh crore transactions in Q2FY21, up by 166% YoY, compared to around ₹39,340 crore in Q2FY20. The bank says has 20% market share in volume terms as of September 2020 compared to 12% as of September 2019

Debit Card and Credit Card spends

Rebounded to ₹11,071 crore in Q2FY21 from ₹7,492 crore in Q1FY21, on a year-on-year basis debit card spends have reduced from ₹12,672 crore in Q2FY20. On the other hand, overall credit card spends stood at ₹12,026 crore in Q2FY21 which is slightly higher from ₹8,055 crore in the previous quarter. Compared to the previous year, overall credit card spends are down by 33% from ₹19,181 crore as of Q2FY20.

The banks’ market share in the credit card space has waned, in terms of cards-in-force, to 11.5% in Q2FY21 from 12.6% in Q2FY20, primarily since corporate credit card issuances and spends have slowed down compared to the retail credit cards.

“The retail credit card spends has been going up quarter and quarter, whereas in line with the soft economy [last year] we reduced limits and de-focussed on the commercial credit card segment. Last year, commercial credit cards contributed 39% to total spends which has reduced to 14%,” said Sumit Bali, president of retail lending and payments, Axis Bank.

Financial snapshot

• Net profit stood at ₹1,684 crore (up from a loss of ₹112 crore)
• Net interest income stands at ₹7,326 crore (up by 20% year-on-year)
• Advances stood at over ₹5.76 lakh crore (up by 11% year-on-year)
• Deposits grew to over ₹6.35 lakh crore (up by 9% year-on-year)
• Gross non-performing assets stood at 4.18% (down from 4.72% in Q1FY21 and 5.03% in Q2FY20)