ICICI Bank first pvt lender to surpass Rs 2 trn in mortgage loan portfolio

The bank has witnessed the highest ever disbursement in the mortgage portfolio in October

Private sector lender ICICI Bank on Wednesday said its mortgage loan portfolio has surpassed Rs 2 trillion, making it the first private sector bank in the country to achieve the milestone. In 2016, the segment had crossed the Rs 1-trillion mark.

The bank said it witnessed highest-ever disbursements in the portfolio in October, following the trend set in September when it surpassed the pre-Covid-19 levels both in terms of the number of customers and value.

The bank is expecting to reach the next trillion in less than four years, the management said.

Digitisation of the mortgage process along with the use of Big Data analytics to offer loans has driven the growth and nearly one-third of the new home loans disbursed by the bank are processed digitally. It aims to process 75 per cent of its new mortgage loans digitally in the next few years.

Also, affordability of customers has gone up, aided by factors such as attractive interest rates, low property prices, and a reduction in stamp duty in many states.

The bank has also expanded outside the metro cities. “Anticipating rapid growth in demand in upcoming cities for real estate, especially in the affordable segment, we have expanded our footprint far and wide. Now, we are present in 1,100 locations, including tier 2, 3 and 4 cities as well as fast-growing outskirts of metro cities,” said Anup Bagchi, executive director, ICICI Bank.

The bank has scaled up its credit processing centers from around 170 to over 200 in past two years in the new markets for efficient processing and quick turn-around for customers. 

Bagchi said transfer of accounts to other financial institutions — where a borrower moves their loan account to get a lower interest rate — have contributed materially to the growth. He, however, declined to specify the numbers.

“We have no bias when it comes to the customer segment. And, in mortgage portfolio, the collateral is very good, which is why it is the safest lending. But, there is an element of confidence in the salaried class customers compared to the self-employed class,” the bank management said.