Cuts dependence on direct selling agents to sell loans, branches back in focus.
As it shifts gears to enter an expansionary phase and prepares to expand its loan book after six successive quarters of contraction, ICICI Bank is making changes in its retail banking administration structure.
The changes are aimed at pushing the sale of retail loans through the lender’s 1,700-odd branches, which were hitherto used mainly for acquiring retail deposits.
The country’s largest private sector lender has carved its retail banking franchise into four geographic zones and has created a new layer of managers to head these blocks.
The zonal heads will oversee both retail assets and liabilities and will report to Rajeev Sabharwal, the newly-appointed head of retail banking, and Maninder Juneja, head of branch banking.
The north zone will be headed by Kumar Ashish, west zone by Sanjeev Sehrawat, south by Suresh Badami and east by Anirudh Kamani.
All new zonal heads have been designated as general managers, except for Kamani, who is a joint general manager. The changes took effect from April 1.
In the past, ICICI Bank’s retail operations were heavily geared towards loans and the retail assets vertical would stretch right up to the level of a senior general manager, one level below an executive director. The branches would focus on deposits, while an army of third-party agents were responsible for selling loans. Over the past few months, the lender has sharply reduced its reliance on direct sales agents and cut spending on third-party selling to Rs 31 crore in the quarter ended December 2009 from a peak of Rs 385 crore. The bank has said it will sell retail loans predominantly through its branch network, which will soon be 2,000 branches strong.
According to an ICICI Bank spokesperson, the changes are in line with the bank’s strategy to integrate retail assets sales into the branch banking structure.
“We always had a regional management structure for our branches, which focused primarily on liability product sales and servicing. We have now integrated our asset product sales with this structure. This will enable a single-point ownership and management of customer relationships… In order to ensure appropriate level of leadership in this new structure, we have strengthened the regional leadership with senior leaders who will look at an integrated strategy for various geographical markets,” the spokesperson said.
The changes in the bank’s retail operations will bring it organisational structure closer to other banks in the country.
According to an analyst with a Mumbai-based brokerage, there is a shift in ICICI Bank’s approach to manage the expanding branch network. The emphasis on reorganisation around geographical lines was similar to the model followed by public sector banks, he said.
From a peak retail loan book of about Rs 122,500 crore, the bank has worked fast to reduce its consumer assets to Rs 80,700 core as of December 31, 2009. It’s overall loan book has also reduced to Rs 179,300 crore from a peak of around Rs 222,000 crore. However, the lender has said its loan book had grown sequentially in the last quarter of the financial year ended March 31, 2009.
It expects a growth of about 15 per cent in its loan book in 2010-11.
On the retail side, the focus is clearly on mortgages and auto loans, and the bank demonstrated its readiness to compete with other active players by offering teaser loans in these segments.
“While mortgages and vehicle loans would be the major products in terms of volumes, we would also selectively offer credit card and personal loan products,” the spokesperson said.
