SWOT analysis of Axis Bank

Here is a SWOT of Axis Bank – One of the fastest growing banks in India.

Strengths

• Axis bank has been given the rating as one of top three positions in terms of fastest growth in private sector banks
• Financial express has given number two position and BT-KPMG has rated AXIS bank as the best bank with some 26 parameters
• The bank has a network of 1,493 domestic branches and 8,324 ATMs
• The bank has its presence in 971 cities and towns
• The banks financial positions grows at a rate of 20% every year which is a major positive sign for any bank
• The company’s net profit is Q3FY12 is 1,102.27 which has a increase of 25.19% growth compared to 2011

Weaknesses

• Gaps – Majorly they concentrated in corporate, wholesale banking, treasury services, retail banking
• Foreign branches constitute only 8% of total assets
• Very recently the bank started focusing its attention towards personal banking and rural areas
• The share rates of AXIS bank is constantly fluctuating in higher margins which makes investors in an uncomfortable position most of the time
• There are lot of financial product gaps in terms of performance as well as reaching out to the customer
• There are many fraudulent activities involved in credit cards as the banks process credit card approval even without verification of original documents
• Their financial consultants are not wise enough to guide the customers towards right investments
• Customer service has to improve a lot in order to be in race with other major players

Opportunities

• Acquisitions to fill gap

• In 2009, Alliance with Motilal Oswal for online trading for 10 million customers
• In 2010, acquired Enam Securities Pvt Ltd – broking and investment banking
• In Sep 2009, SEBI approved Axis Asset Management Co. for mutual fund business
• No. of e-transactions increased from 0.7 million to around 2 million
• Geographical expansion to rural market – 80% of them have no access to formal lending

• 46% use informal lending channels
• 24% unregulated money lenders
• Now number of branches increased to 1493 from 339.
• Last quarter there were 48 new branches opened across the Nation
• Since it’s a new age banking there are lot of opportunities to have the advance technicalities in banking solutions compared to existing major players
• The assets in their international operations are growing at a very faster pace with a growth rate of 9%.
• The concept of ETM (Everywhere teller machine) by AXIS Bank had a good response in terms of attracting new customers in personal banking segment

Threats

• Since 2009, RBI has increased CRR by 100 basis points
• Increased repo rate reverse repo rate by 50 points – 11 times of late
• Increasing popularity of QIPs due to ease in fund raising
• RBI allowed foreign banks to invest up to 74% in Indian banking
• Government schemes are most often serviced only by govern banks like SBI ,Indian Banks, Punjab National Bank etc
• ICICI and HDFC are imposing strong threats in terms of their expansion in customer base by their aggressive marketing strategies