SBI pips ICICI to turn largest retail lender
State Bank of India (SBI) Chairman O P Bhatt's strategy of regaining market share has led to the bank decisively becoming the largest retail lender, overtaking ICICI Bank, which in the private sector had created a culture of mass retail banking over the past decade and held sway.
ICICI Bank, the country’s second largest lender by assets, has now paused expansion of its loan book, particularly on the retail side, as it corrects its funding sources, leading to its retail loans being staggered over the last two years.
ICICI Bank’s retail loans outstanding shrank to Rs 1,06,200 crore at the end of March 2009 from Rs 1,27,689 crore at the end of March 2007. SBI, the country’s largest lender, adopted an aggressive lending strategy while the rest of the industry froze on its tracks. It saw its retail loan portfolio grow past its immediate rival’s to Rs 1,06,950 crore.
A senior SBI official, who did not want to be identified, said “the lead now is marginal but we will continue to march ahead. We will continue to be an aggressive lender to individuals, particularly with the extension of our 8 per cent home loan scheme till September 2009.”
SBI’s home loan portfolio at the end of March 2009 was Rs 54,063 crore.
According to Chanda Kochhar, Managing Director & CEO of ICICI Bank, the bank would sustain a policy of capital conservation and raising of deposits while being moderate on loans.
SBI has seen a significant increase in its deposits as depositors found safety in the largest bank, while taking in a shift of home loan borrowers away from costlier lenders as it dropped interest rates.