Shikha Sharma, managing director and chief executive officer of Axis Bank, says the merger of the investment banking and equities businesses of Enam Securities will help Axis offer a whole suite of investment banking products. It will make the bank one of the strongest in corporate banking, she tells Sumit Sharma. Edited excerpts:
Where does this acquisition fit into the bank’s game plan?
We have always been a strong corporate bank with strong commercial banking and debt capital markets franchises and Enam has a great equity capital market franchise. That’s what creates a great bouquet of clients. This (acquisition) gives us a whole suite of investment banking products. It makes us a full-service commercial and investment bank. It’s a great strategic fit, it’s a fantastic franchise, and there’s great cultural fit too.
As India creates opportunities for next several decades, what’s going to be required in financial space is a great combination of corporate banking, commercial banking and investment banking.
Does it complete the suite or are there still some missing links?
It pretty much completes the suite.
Does it bring you on par with some of the biggest banks in India in terms of the suite of products?
It makes us one of the strongest in the market place in corporate banking.
What kind of revenues or returns do you expect from this transaction?
We do not expect the transaction to be RoE (returns on equity) accretive or earnings-dilutive as we are acquiring a profitable business.
Did you evaluate any global investment bank? What prompted you to settle for a local one?
I have been asked whether we will look at an acquisition ever since I moved to Axis Bank. I have been very consistent with the answer. We believe Indian banking is in a sweet spot because India is in a sweet spot and there’s going to be a lot of growth domestically and of Indian companies going overseas. Our strengths are in building a strong corporate banking franchise, besides investment banking and SME franchises.
There are enough organic opportunities. Acquisition for sake of an acquisition is going to distract and we don’t want to be distracted. Enam was such a perfect fit that it was too tempting not to go for it.
Do you plan any overseas alliances or tie-ups?
There are lots of opportunities in India. We are focused to becoming a very strong Indian bank.
