Axis Bank to review it’s International Strategy, by closing operations of its British subsidiary to focus on the Indian Banking Sector. By end of April 2021, the Axis Bank fully wind down and stop operations of its subsidiary in Britain deciding on to surrender the banking license. As a part of this, the bank has decided to move with the objective to focus on the Indian banking market and harness the potential there.
The plan has been reviewed by both the British regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), says the Axis Bank. The bank added, it is committed to giving optimum value for all its stakeholders in association with the main principles and the local policies as applicable.
Axis Bank UK Limited is not a material subsidiary of the bank concerning the listing regulation. Also, the decision will not have any material impact on the financial position or on the operations of the bank. The bank will make sure it maintains translucency and fairness in dealing with all its customers and employees of Axis Bank UK Ltd throughout the winding down process.
Over the last few years, Indian banks have been shutting down their foreign subsidiaries, and branches. So as to try to conserve capital in a challenging economic environment, like the Covid-19 crisis. The state-owned Bank of Baroda closed down its Ghana branch. Also surrendered its license, last month. Bank of India ( BoI) last December closed the banking license of its wholly-owned subsidiary, Bank of India (Botswana) Ltd and it has been surrendered to the Bank of Botswana.
The rating of Axis Bank and some other Indian non-bank financiers were downgraded by the S&P Global Ratings on 26 June due to degrading operating conditions caused by the Covid-19 episodes. Axis Bank’s issuer credit rating was cut one notch to BB+, indicating junk status. The rating action reflects its expectation that heightened economic risks facing India’s banking system will affect the lender’s asset quality, and financial performance added S&P.
Axis Bank Ltd is currently trading at Rs 428.20 up by Rs4.65 or 1.1% from its previous closing of Rs 423.55 on the BSE. That is, the Axis Bank stock settled at Rs 423.55 on the BSE, down by 2.24 percent from the previous close.
