ICICI Bank sees profit in corp credit

Healthy corporate credit demand will help ICICI Bank to grow its balance sheet despite slowdown in the consumer growth, according to its Chief Executive K V Kamath.

"There is a slowdown in retail credit from over 40 per cent witnessed six-seven years ago to 20-25 per cent now. It (slowdown) is the combination of base effect and rising interest rate on loans. However, this has not impacted the demand from the corporate segment," Kamath told reporters on the sidelines of a seminar organised by Confederation of India Industry here.

The consumer credit boom (high growth) started on a small base and after a point (on a large base) the growth in percentage terms will be slow. The pace of growth has declined a little faster than expected (about five per cent). 
 

ICICI PORTFOLIO Retail loans as on Dec 31, 2006
Rs crore
Home loans	59,700
Auto loans	19,400
Commercial business	14,000
Personal loans	10,800
Credit cards	4,600
Dealer funding	3,000
Two wheelers	2,700
Professional equipment	1,100

The consumer credit is expected to grow by $40-50 billion every year in India, he said.

The pipeline of corporate and infrastructure loan is about $450 billion and the bank didn't see any need to rebalance its growth strategy, he emphasised. The private sector bank has identified consumer loan, corporate segment, SME, rural and international banking as growth engines for future.

On the impact of high interest rate on the asset quality, he said, as of now there was no adverse impact on the quality of assets due to rising interest rates. The interest rates have shown a rise due to signals being given to banks (read RBI's monetary tightening).

Referring to market speculation on splitting stock, he clarified that the bank has no plans to split the stock (face value Rs 10).