ICICI banks on foreign currency, retail loans fall
Healthy growth in infrastructure and domestic corporate segments are the positives. Retail loans are a source of worry.<br /><br /> <br /><br />
At Citi India Investor Conference, ICICI Bank was in for a reality check. Here are some broad indicators.
ICICI Bank expects that loan growth is likely to stay in line with the industry standard of 19-20% in FY12. Key drivers for loan growth are likely to come from increased demand from foreign currency loans by corporates as well as a healthy growth in infrastructure and domestic corporate segments.
The retail loan growth is likely to trail the overall portfolio growth at around 15-17%, especially due to a moderation in the mortgage level. The bank feels that its strong branch addition of 1,500 to 2,500 since FY09 would lead to a deposit growth momentum, since these branches would ultimately take the productivity curve up.
The current account and saving account (CASA) ratio, which is currently hovering above the 45% mark, could hold down slightly. The medium term target is to maintain it at above 40% even with a higher balance sheet growth.
Costs may provide the bank something to cheer about. Credit costs are expected to fall further by 80 basis points for FY12. Thanks to its well-thought out project and risk procedures, the stress level from the exposure to the infrastructure segment is much less.
Microfinance (the Rs 1,000-crore exposure) could turn out to be a blip as the bank faces some slippages on this count. The management expects operating costs to remain largely stable with cost/asset ratio of around 1.7%.
There has been some rise in employee costs though. This was because the bank is trying to catch up this year after wages last year grew at a pace which was relatively low.
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