ICICI Bank plans to rejig assets portfolio

Bank to pare retail loans to 40% of assets.

ICICI Bank's retail loan book has swelled the most as the banking sector's lending for home purchases and personal needs has exploded in the last couple of years.

The country's second largest bank now wants to bring about an equilibrium in its loan portfolio.

ICICI Bank has decided to bring down the share of retail loans to around 40 per cent of total loan assets in two to three years from nearly 65 per cent now.

ICICI Bank sources said the bank aimed at having about 40 per cent retail loan assets and around 25 per cent international assets.

The remaining will be corporate, agriculture, SME and other loan assets.

The bank expects companies in the expansion mode to start accessing funds from the banking sector from 2006-07 and investments in infrastructure to increase.

"These developments will help the bank balance its loan portfolio, which is currently tilted heavily towards retail lending," the sources said.

ICICI Bank had retail loans of Rs 78,500 crore on December 31, 2005, about 65 per cent of its total loan portfolio.

Home loans were as much as 50 per cent of retail loans, automobile loans around 30 per cent and the balance included personal loans and credit cards.

In the first nine months of 2005-06, the bank's retail loans increased by a whopping 70 per cent, after a sizzling growth in 2004-05.

The bank's management expects the base effect to set in in 2006-07 and lead to an increase in retail loans at a rate closer to the industry's growth.

ICICI Bank tapped the growth potential in retail lending over the last couple of years and also simultaneously launched its international franchise operations in countries like the UK and Canada. It has now set its sights on agriculture and rural lending.