Icici Bank Ads Chunk For Loans

ICICI Bank has lined up an amount of Rs 500 crore for provision of line of credit to various corporates as part of its strategy to grow via asset building.

This money is part of the $175 million raised by the bank through an American depositary shares (ADS) issue in late March. However, this would also mean that the bank has decided to put its plan of acquiring a bank on hold.

H N Sinor, managing director and chief executive officer of ICICI Bank, said, "A large number of credit proposals have been examined and the bank has decided to disburse Rs 500 crore of the ADS money in the near future rather than retaining it. The corporate portfolio is expected to be expanded further during the year."

 

In line with its past strategy the bank has also targeted to increase the number of corporate relationships by 500 this year. Currently ICICI Bank has a total number of 180 corporates on its portfolio and could be expected to step up its marketing efforts for getting the required amounts of loans across. It is likely to leverage on the large number of corporate relationships possessed by its parent company, ICICI in order to increase the corporate portfolio.

The bank has not yet identified any segments on which it would be concentrating and instead would not be exposing itself to any industrial segment to more than 10 per cent of its outstanding loans as a norm for risk mitigation. In the present scenario the bank has less than 4 per cent exposure in any industrial segment though once the loan portfolio is expanded this could also be expected to increase.

Although the bank's decision to utilise the ADS money to increase the loan portfolio means that an acquisition will not be immediately effected, the bank continues to search for a strategic partner for expansion of its businesses. "Strategic fit would continue to be explored and growth through acquisition has not been ruled out," Sinor said.