Dubai: ICICI Bank, the largest private sector bank in India, expects a strong rebound in business including the non-resident Indian (NRI) business in 2010, bank Managing Director and CEO Chanda Kochhar told Gulf News in a recent interview.
"We expect strong growth in wealth management, remittances, deposits and home finance segment of our NRI business in 2010.
"Although the growth in remittance has been flat during the current financial year [April 2009 to March 2010], we have not experienced any drop in business from the UAE and the rest of the Gulf region," said Kochhar.
The bank expects asset growth of more than 15 per cent in the next financial year with significant growth to come from lending to infrastructure, manufacturing, project finance, corporate loans and home finance.
"The credit growth outlook is good as Indian economy is growing at a rapid pace," she said. "The home finance segment looks very promising while a number of large scale projects in manufacturing and infrastructure are in the pipeline across the country.
"In the wealth management business we expect larger NRI participation as India has emerged a strong global growth story."
Provisions
The bank faced a significant surge in non-performing assets (NPAs) in the unsecured lending category such as personal loans and credit cards business last year resulting in high provisions.
"For us the NPAs have peaked. Going forward, we see the burden of provisions to subside," said Kochhar.
The bank is shrinking the riskier side of its loan book in an effort to improve credit quality and shifting the balance of its lending away from consumers and toward corporate borrowers.
"We are going though some amount of de-leveraging in the unsecured part of our loan portfolios.
"We expect the credit quality to improve in this segment of the business as more credit data is available through the credit bureaus," said Kochhar.
She expects the lending rates to remain stable despite the recent 0.75 per cent hike in the cash reserve ratio (CRR) by the Reserve Bank of India.
"The CRR hike is not going to impact the lending rates. It is going to take away the excess liquidity of Rs360 billion [Dh28.3 billion] away from the banking system.
"But as the pace of lending picks up next year on rising demand, the rates are bound to go up. I see it as a purely demand-driven rate increase," she said.
For the third quarter ended on December 31, the bank reported a 22 per cent increase in its operating profits with a small dip in net profits.
"The net profit growth in last quarter has been flat. It's no profit no loss situation if we compare the one time treasury income that was on the books in the third quarter of last year."
For the fourth quarter, Kochhar expects the bank to perform better as a result of the improving net interest margins.
"We are expecting a small improvement in interest margins as we have been focusing on current account-savings account and deposits, a source of low cost funding."
