The Hindu Business Line : Global operations doing well, says ICICI Bank

Going forward
Overseas operations contributed about 7% of the revenues in 2006-07
Housing loan: `With increase in property prices, affordability had come down'

Chennai June 18 All international operations of ICICI Bank, comprising branches and wholly owned subsidiaries outside India (except its wholly owned Canadian subsidiary), have broken even, according to Ms Madhabi Puri Buch, Executive Director.

She was responding to a question on the profitability of the international operations of ICICI Bank during a press conference to announce the public offer of equity shares (issue size of Rs 8,750 crore).

ICICI Bank has a presence in 17 countries.

ICICI Bank's foreign operations accounted for 19 per cent of its consolidated balance sheet.

According to information provided in the offer document on geographical segmentation, foreign operations, comprising branches having operations outside India and offshore banking unit in Mumbai, contributed the equivalent of Rs 2,027 crore or about seven per cent of the revenues in 2006-07. Asked about the deceleration in housing loan segment, Ms Buch said that with increase in property prices, affordability had come down.

This had led to a number of people deferring their purchase, but demand would come back in some form, giving the underlying need for housing, she said.

Asked about the bad loans in this segment caused by higher rates, she said that it had not had much impact.

Pointing out that salaries had gone up during the past four years, even as interest rates moved up, she said, that the value of property had also doubled or trebled in many cases.

"This is why delinquency has not shown any change," she said.

She said the country was still only in its fourth year in the growth cycle. Many economists had predicted this phase of the cycle would run for a decade more, going by the experience of other countries.

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