India’s third-largest private lender is joining its larger rivals in offering pay hikes to staff even as the economic fall out of the coronavirus pandemic threatens profit growth.
Axis Bank Ltd. will increase staff salaries between 4% and 12% from Oct. 1 based on performance, according to people with knowledge of the plans. The Mumbai-based lender, which has about 76,000 employees, also paid bonuses to its staff, the people said, asking not to be identified because the matter is private.
HDFC Bank Ltd., the country’s largest private lender by assets, boosted salaries in April based on performance and also paid bonuses, other people with knowledge of the matter said
ICICI Bank Ltd., the second-biggest privately-held lender, gave about 80% of its 100,000 employees a bonus and pay rise from July, according to different people aware of the plans.
The pay rises come as the coronavirus pandemic forces some local and global peers to cut jobs and pay. Many Indian lenders are seeking to save costs as the coronavirus is expected to push soured assets to a two-decade high.
Executives earning more than $34,109 at India’s fourth-largest private lender, Kotak Mahindra Bank Ltd., will take a 10% salary cut, while senior management will take a 15% reduction.
Meanwhile, HDFC Bank Managing Director and Chief Executive Officer Aditya Puri has assured employees of the country's largest private sector lender that their jobs and bonuses are secure.
Even as the COVID-19 pandemic rages on, Puri, who retires later this month, said the bank is doing well, has sufficient capital and does not have any strain in the loans that it has made. He also hinted that the bank may post a strong set of quarterly numbers in the recently ended July-September period and quarters ahead as well.
The COVID-19 pandemic has resulted in job losses, especially in the organised sectors, as businesses suffered due to economic activity coming to a halt in lockdowns. HDFC Bank and its private sector competitors have met hikes and bonuses commitments since the start of the pandemic.
"Not only are your jobssecure, your increment is also secure. Your bonus and your promotion are secure," Puri told over 1.15 lakh employees of the bank, in a video message last week.
Puri, who has led the bank for over 25 years since its inception, said he is giving the assurance on behalf of the management team including his successor Sashidhar Jagdishan.
"Thebank is doing well. We have all the capital that we need. Our portfolio is not under strain. We are aggressively using our distribution and technology advantage," he said.
He urged employees to work as a team, follow the vision the lender has set out for itself and beat competition.
Puri was speaking ahead of the launch of festive offers by the lender in its second edition.
Competing banks have also launched similar aggressive offerings, eyeing larger share of transactions amid slowing consumption.
He said the bank has not accepted defeat in the face of the coronavirus outbreak and delivered good results for two quarters, and added that projections for the upcoming quarters also say the same.
Asking the employees to share messages about the festive offers on their social media handles and promised a 10-minute video chat with the employee securing the highest number of 'likes' on a post.