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ICICI Bank plays safe with retail focus

Retail loans grow 25% during first quarter, personal loans log in highest growth of 61.19%; Lender reducing concentration of the its top corporate borrowers

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ICICI Bank CEO Chanda Kochchar
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ICICI Bank, the largest private sector lender by assets, will continue to put its thrust on retail loans, which have grown by over 25% during April-June to Rs 170,900 crore. 

The mortgage loans and the unsecured portfolios of the bank have reported robust growth. 

The year-on-year growth in personal loans has been the highest, growing 61.19% over the previous year to Rs 7,519.6 crore. The other unsecured segment which has reported robust growth is the credit cards which grew 15% over the same time last year to Rs 4,101 crore. 

Home loans that comprise 54.9% of the total retail and about 43% of the total loan book of the bank, have grown 26.4% over the previous year to Rs 93,824.1 crore. Its auto loans grew 21% to Rs 30,591.1 crore at the end of the first quarter ended June 30, 2015.

Chanda Kochhar, chief executive officer and managing director, ICICI Bank, said in a media conference call last week, "We have seen very good growth in our retail portfolio including our unsecured loan book, but the percentages look high as the base earlier was lower. But we will continue to grow these portfolios."

She said that ICICI Bank was growing its retail loans faster than the corporate loans and was reducing concentration of the its top corporate borrowers.

The incremental loan book grew Rs 12,000 crore in the first quarter of this fiscal. Majority of this included retail loans and loan to top rated public sector companies, taking the total loan book including corporate loans to Rs 399,700 crore. 

Retail loans, however, will continue to be the mainstay of the bank as the external environment continues to be volatile and the corporate loan demand may take more than two quarters to stabilise.

“The growth in retail loans will continue to be in the excess of 20% for the rest of the year, loans to companies will start from working capital requirements and then move to capital expenditure,” Kochhar said.

Reliance Securities said in a report, “The loan book of the bank grew 15.2% over the previous year, led by a strong retail growth. The retail loans also grew 3.2% over the preceding quarter.” 

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