BackChanda Kochhar says ICICI targeting 18% return on equity
The company will continue our focus on secured retail loan products to increase market share
Premium(Abhijit Bhatlekar/Mint)
Mumbai: ICICI Bank Ltd will look at ways to increase its return on equity (RoE) to 18% from 15% currently, managing director Chanda Kochhar said.
“We will continue our focus on secured retail loan products to increase market share. Having crossed 15% RoE, our next aspiration level of RoE is 18%," Kochhar was cited as saying at a global investor conference organized by Motilal Oswal Securities Ltd in Mumbai.
RoE expressed as a percentage is the amount of net income returned as a percentage of shareholders’ equity. It reveals how much profit a company generates from shareholders’ money.
In the quarter ended June, ICICI posted a 25% increase in net profit on higher demand for loans from individuals and a surge in other income.
Kochhar said loans to individuals will continue to remain the bank’s focus. “Composition of portfolio, selective underwriting and close monitoring have helped us in risk management," Kochhar was cited as saying in a note by the brokerage.
ICICI’s stand-alone profit rose to ₹ 2,274 crore, or ₹ 19.61 per share, from ₹ 1,815 crore, or ₹ 15.71, in June last year.
“There has been overall moderation in loan growth, retail loan growth is holding up. Our credit growth rate is in line with the GDP growth. In India, more projects need handholding," Kochhar said.
Shares of ICICI Bank rose 2.81% to ₹ 826.90 on Monday on BSE, while the exchange’s benchmark Sensex gained 1.43% to 18,886.13 points.
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