Axis Bank plans to close down the physical branches of Enam?s retail broking division, Enam Securities Direct, two people familiar with the matter said. Enam Securities Direct is a wholly-owned subsidiary of Enam Securities and has 12 own branches and another 48 franchisee-operated ones in major cities. All these branches could eventually be closed down.
In November last year, Axis Bank had entered into a R2,067 crore all-stock deal to take over the investment banking and equities (both institutional and retail) businesses. These businesses will be demerged from Enam Securities and become a wholly-owned subsidiary of Axis Bank.
While the demerger process is still on, pending a few regulatory approvals, market observers believe that the integration process between the two firms is nearly complete. ?It is clear that the Axis management is taking the call to close down the branches,? said the managing director of a broking firm who didn?t want to be identified, adding that a few branches had already shut shop.
A spokesperson from Axis Bank, however, said that ?there are no such plans to close down branches.? An email sent to Enam Securities remained unanswered at the time of going to press.
?Operating standalone retail broking branches is expensive and it makes sense for the bank to utilise its bank branches instead,? said the CEO of broking firm, on condition of anonymity. ?Closing down the Enam branches will not impact the continuity of the retail clientele,? said another senior broking official. Axis Bank has over 1,000 brick-and-mortar branches. In January, Axis Bank had forayed into retail broking through AxisDirect, its online trading platform. AxisDirect is a product of Axis Securities and Sales, a 100% subsidiary of Axis Bank.
It is not yet clear whether Axis Bank wants to focus purely on an online retail broking model or operate both online and offline, a model adopted by ICICI Securities. Axis Bank did not respond to an email asking it to elaborate on its future retail broking strategy.
Of late, a number of public and private sector banks have revived plans to set up retail broking divisions. Profit margins of many retail brokers, however, have been severely hit in the last quarter as cash volumes on exchanges have touched historic lows and retail participants have continued to stay away.