Mumbai: With $700 billion to be invested by corporate in the next three years, ICICI Bank expects its lending to the sector to grow faster than the industry.
“On corporate side we will grow faster than the industry. We will grow at least by 35%,” ICICI Joint Managing Director Chanda Kochhar told PTI.
“I think the investment pipeline, which we estimate to be about $700 billion, will be the growth engine for GDP, for the banking sector in general and particularly for ICICI Bank. Half of these investments is manufacturing and half infrastructure,” she added.
Assuming a debt-equity ratio of 1:1, a sum of $350 billion is required as credit over the next three years of which ICICI Bank is eyeing to corner a large part.
“Our involvement will be large as traditionally we have been a project finance company. However, not all of it will be on our balance sheet as a major part of it will be through syndication with other banks,” she said.
Corporate and international business of ICICI jointly comprise 32% of its total loans and advances. Retail still maintains a dominant share of 58%, while the remaining was debt to SMEs and agriculture.
“Earlier, we were riding only one engine of growth (retail) for five to six years which was growing upwards of 30-35%. Now, we have an additional engine of growth (corporate),” she added.
“Investments in projects are being planned. We have not seen anybody withdrawing. Implementation period has also become shorter,” she said.
She said that the bank’s retail business too will grow but at a smaller pace of about 12-13%, in line with the industry. However, in total terms retail will still hold dominant share in advances.
“Retail credit base itself has become so large and with interest rates and real estate prices higher than what they were two to three years ago, rate of growth of the segment should be around 12-15% for the industry,” she said adding corporate credit will grow upwards of 25%.
She said the bank was poised to grow faster than the industry as it had quickly added capabilities of investment banking and syndication.
“We have geared ourselves up much earlier than other banks. The opportunity is now and other banks cannot quickly build the expertise which we have built in investment banking and syndication,” Kochhar said.