The Hindu Business Line : ICICI Bank sees slowdown in retail credit growth

TITANIUM MASTERCARD: (From left) Mr Udayan Bose, Chairman, Thomas Cook; Mr Nitin Gupta, General Manager, South - Asia, MasterCard Worldwide; and Mr V. Vaidyanathan, Executive Director, ICICI Bank, at a press conference in Mumbai on Thursday. - Paul Noronha

Mumbai March 8 ICICI Bank is seeing a slowdown in the growth of its retail loans to 20 per cent this fiscal, against the previous year's jump of 40 per cent.

"In the past five years, ICICI Bank has seen a growth of 40 per cent in retail loans which has slowed down to 20 per cent this fiscal. The interest rate increases through the year have reduced the incremental growth in disbursements," said Mr V. Vaidyanathan, Executive Director, ICICI Bank. The growth of retail loans will, however, be sustained at 20-25 per cent next fiscal, he added.

Mortgage finance

He said the growth of mortgage finance, which is the largest contributor to the retail portfolio, had also fallen due to a rise in property prices. "The number of transactions in the property market has now hit a plateau. However, the average ticket size of loans has increased from Rs 12 lakh last year to Rs 15 lakh," he said.

The share of home loans, which stands at 30 per cent of ICICI Bank's loan book, will shrink as a percentage of incremental business, he added. ICICI Bank's home loan outstandings stand at Rs 60,000 crore.

The bank will now look at other avenues of income and modify its business model with the changing times. He said with the disbursement of retail credit slowing down, the bank will now push fee based income through third party distribution of products and also focus on international banking.

The impact of the hike in interest rates will not affect the flow of auto loans as they have a shorter tenor, Mr Vaidyanathan explained.

Tie up for credit card

Thomas Cook India Ltd today launched the "Titanium Mastercard" with ICICI Bank. A consumer using this credit card at any of Thomas Cook India's outlets will be rewarded on purchase of airline tickets, holiday packages, hotel bookings and travel insurance.

ICICI Bank has a credit card base of 7 million, which will expand to 9 million by the end of the fiscal, said Mr Sachin Khandelwal, Head, Cards Product Group, ICICI Bank.

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