ICICI to securitise Rs 10,000 crore in 2005

Kamath sees upward movement in interest rates

ICICI Bank proposes to securitise an asset portfolio of Rs 10,000 crore in the coming fiscal, which will help release capital funds for furthering business growth.

At the same time, the leading private sector bank has to repay about Rs 10,000 crore of liabilities of the erstwhile ICICI Ltd, said ICICI Bank deputy managing director Kalpana Morparia, adding that the liabilities carry a coupon rate of about 10 per cent.

Morparia was speaking to reporters on the sidelines of the bank's roadshow for its forthcoming Rs 3,500 crore public issue in Mumbai on Saturday. ICICI Bank intends to securitise part of its agricultural loans in addition to corporate loans, auto loans, personal loans and some portion of its mortgage book.

"There is a healthy appetite for securitised paper from banks, insurance companies and mutual funds. The securitisation would release resources for further business growth," said Morparia. ICICI Bank has in the current fiscal securitised a portfolio of about Rs 8,000 crore.

Meanwhile, K V Kamath, ICICI Bank managing director and chief executive anticipates a rise in domestic interest rates. Though seen to be stable today, Kamath added that any rise in rates would be determined by global trends and the pick up in the credit demand. He expects global interest rates moving up.

The bank's MD is equally optimistic of a revival in corporate demand for funds in the coming months. "The equity issue is to fund new business opportunities in the economy not there earlier," said Kamath.

He also pointed out that this is the first public issue of ICICI Bank after the reverse merger, since the earlier issue was a divestment from the erstwhile ICICI.

Qualifying the need to raise what is perceived as the largest issue of fresh capital, Kamath said that the bank did not wish to keep coming to the public and preferred to raise adequate funds to see it through for the next few years. "We have become leaders in retail banking. Our international and insurance operations have equally fared exceedingly well and we need more resources to maintain performance," he added.

Part of the requirements would be utilised to meet capital requirements of the insurance subsidiaries "" ICICI Prudential Life and ICICI Lombard General Insurance Company.

ICICI Bank proposes to expand its international banking operations to Bahrain and Bangladesh shortly. In addition as Indian Inc is increasingly expanding its presence abroad, ICICI Bank sees immense opportunities in the areas of trade finance, said Morparia.