Country's largest private lender ICICI Bank has said that its credit will grow at a hefty 18 per cent this fiscal, contrary to a meagre 1.8 per cent expansion in the first half, largely on account of buoyant corporate and retail businesses.
"Last quarter (July-September) was the first quarter after nine quarters that the decline in retail business was arrested...our domestic corporate sector business has grown at an annualised rate of 30 per cent in the last quarter. So that growth would sustain," ICICI Bank CEO Chanda Kochhar said.
It may be recalled that ICICI Bank had posted a 19 per cent growth in net profit to Rs 1,236.27 crore during the second quarter. In the same period a year ago, it had witnessed a flat growth at Rs 1,040.13 crore.
"From here, what will happen is that our retail business will start growing...international growing at single digit and corporate sector growing at much healthier rate. I still expect that for the year as a whole we should end with 18 per cent growth rate," Kochhar said.
ICICI Bank asset grew just by 1.8 per cent during the first six months of the current fiscal at Rs 1,94,200 crore against Rs 1,90,860 crore at the end of September, 2009.
Banking on retail portfolio picking up in the coming months, Kochhar said, "In a way second quarter was beginning of the growth, so to say. While the number itself look small, if you break it into segment wise this number came about in spite of the fact the retail business had not grown and the international business was growing at a very moderate level."
Kochhar said, "I see a lot of positive trends for ICICI Bank from here on because for us the peak of NPAs is behind us and we reached very healthy level of CASA (current accounts savings accounts) deposits. We have started growing assets from here and our provisioning costs are coming down."
So, in terms of operating trends each one of the trend has become quite stable, she said. On interest rates, Kochhar said, "there is an upward bias on interest rate. How they move up. To what extent they move up and at what rate they move up - will partly depend on how credit growth rate in the system picks up."
RBI had earlier this month raised key rates at which it lends (repo) and borrows (reverse repo) short-term capital from commercial banks by 25 basis points each in its bid to tame inflation.
"Clearly, the fact is that the liquidity is being managed tightly. The fact is that deposit cost have gone up and therefore as credit demand picks up there would be upward bias on interest rate," she said.