Management meeting: geared up for growth
We met Ms Chanda Kocchar, MD & CEO of ICICI Bank. The bank seems
confident of restarting balance sheet growth, and believes the internal
systems and processes are now very much in place for that. Growth will be
circumscribed by a focus on profitability and quality, but could be
disrupted by potential action by competitors.
• Loan growth... Management is targeting 15-18% loan growth, with a
focus on mortgages, cars, working capital loans, and project finance.
The growth is broadly decomposed into ~20% on the domestic book and
<10% on the international book, including the UK and Canada subs.
• …with quality focus: Management continues to focus on quality even
as the bank returns to growth, with a target of capping wholesale term
deposits at 30%. The strengthened credit systems will not be diluted for
growth, according to management, and high-risk products such as
unsecured loans will stay on the back-burner. Even in the international
book, there is a focus on greater contribution from retail deposits.
• Asset quality trends remain positive: Management flagged that there
is further scope for asset quality improvement, in line with our forecast
trends. A key point was that the outlook for wholesale asset quality is
quite stable, provided the economy maintains its current strength.
Management’s overall tone on asset quality was confident for both the
retail and wholesale segments.
• Maintain Neutral: ICICI Bank remains one of our top picks on a twoto-
three-year horizon, but we maintain our Neutral rating as we are
concerned about near-term triggers and valuations (2.3x P/BV and 19x
P/E, one-year forward).
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