Chanda Kochhar, managing director and chief executive of ICICI Bank, said on Friday she expects loans to grow by 20% this year and the asset quality to remain stable. Kochhar said on a conference call after the results announcement that large projects need to be monitored. Excerpts
ICICI Bank?s slippages in the September quarter were higher than levels seen earlier…
This quarter, the slippages of about R1,220 crore, included R500 crore for one particular account. Otherwise you have seen lower slippages, in line with earlier quarters and that is how we expect it to be over the next few quarters.
Do you see any risks from you current exposure?
We cannot take any particular sector and say that all loans in the sector will come under stress. I have said even in the past that some of them could require restructuring, the way the economy is moving, and you could always have something added to the NPA. But we do see anything that is going to throw up very large negative surprise. We feel that the provisions required for the year will be within the range of 0.75% of loans.
What is you loan growth target for FY2012-13?
We expect the domestic book to grow by about 20%, within which the retail will grow between 15-18% and the corporate book will grow a little higher by about 20%. On the corporate side, growth will come from the working capital demand because revenues of companies are still going up and there is a pipeline of the existing sanctions which are not been drawn down.
Will ICICI?s net interest margin (NIM) improve in the second half of the financial year?
We will maintain our NIMs and work towards improving it a little bit. As far as the NIMs expansion is concerned it will come mainly from the international side, which is where we can slightly improve our NIMs. The improvement might not be significant.
Do you think corporates are in real trouble ?
Some projects are definitely getting delayed on the implementation side and some are getting delayed due to unavailability of raw materials at the price or in the form anticipated by the promoters. Cash flows from many of the projects will get deferred for some reason or the other. But again broadly my feeling is that in a project normally repayment is due only in two years, after the project starts. Initially only the interest needs to be serviced and even if the cash flows take a little time tocome through, companies will have the capability to service the interest. Some may require restructuring but I don?t think most of these projects, especially the ones which are under us, will create too much of a negative impact.
