Axis Bank plans to bridge the gap in its branch network with rivals ICICI and HDFC Bank, both of whom have over 5,000 branches across the country.

The bank sees an opportunity to grow its business in the backdrop of the ongoing merger of public sector banks and is looking to add around 550 branches in the current year to its existing tally of 4,284 branches as on September 30, 2019.

“The strategy is being driven by the realisation that there is a need for a physical presence.

“When the economy is down, it might be a perfect time to invest because NBFCs and smaller banks are suffering and bigger banks are using the downturn as an opportunity to invest more and prepare ourselves for the economy to revive,” said Amitabh Chaudhry, managing director and CEO of Axis Bank, on Wednesday.

“We will add 400 branches by December and another 150 will come up by the fourth quarter,” he said adding that the branches will look to generate business and be profitable. “Before we open a branch we do a lot of work to ensure that on day one, a certain number of accounts and assets are there,” he said.

The bank has raised Rs 12,500 crore in the second quarter and Chaudhry said it is good for the bank to grow at a 20 per cent CAGR (compounded annual growth rate) for the next three years.

The bank, which saw it slippages increase in the second quarter, is hopeful of a revival in the economy despite the rising instances of corporate frauds leading to stress in the banking system.

“One is hoping that the negative trend in the economy should settle down in one or two quarters and hopefully from thereon it should pick up. It can’t be said anything about frauds but the stress of the promoters should start reducing a little bit and we should see some improvement,” he said.

“The government has announced a number of actions, but it will take time for them to design and implement. The sentiment has become negative. Global macro economic factors are not helping,” he said.