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 2.5 million rupees ($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.
S&P Global Ratings lowered Axis Bank’s credit rating to below investment grade in June, citing concerns that the Covid-19 pandemic would challenge the lender’s asset quality and profitability.
The Reserve Bank of India forecasts that the capital-adequacy ratio for lenders -- a measure of available capital meant to ensure the bank can absorb a loss -- could fall to as low as 11.8% by March from 14.6% a year earlier, close to the minimum requirement of 9%.
Still, Axis Bank, Kotak Mahindra Bank and ICICI Bank are among private lenders that have raised about $9 billion by tapping equity markets to protect themselves and prepare for future business. The capital raising will also give them a greater ability to cope with bad loans even as they extend credit.
Representatives for Axis Bank, HDFC Bank, ICICI Bank didn’t immediately respond to emails seeking comments.