Chanda Kochhar on ICICI Bank's performance

ICICI Bank's Managing Director and CEO, Chanda Kochhar, spoke to Business Standard after announcing the bank's second-quarter results. Excerpts:

You had said you would look to expand your loan book once the Casa ratio (proportion of current and savings accounts' balance to deposits) reaches 30-32 per cent. Now that you have exceeded the target, will you increase your loan book?

Yes, we are clearly focused on increasing our loan book in segments such as auto loans, home loans, commercial vehicles finance and corporate loans.

And do you expect to grow faster than the estimate of 0-5 per cent?

Yes, but in segments we are focusing on. On a net-net basis, it may be difficult as we are very conservative on unsecured loans. We will look to shrink the share of unsecured loans in the loan book to around 5 per cent from around 7 per cent at the moment.     

Punjab National Bank has overtaken ICICI Bank in terms of the business to become the second-largest in the country.

This is of no relevance as you do not use only deposits to fund business. You also have other borrowings. Also, along with advances, you have investments. You should look at the balance-sheet size and we are still bigger.

Can you give us a break-up of your retail and corporate loan book?

Retail loans accounted for around 45 per cent of the portfolio.

Will the share of corporate loans increase to around 60 per cent?

That much correction is possible, though I do not expect it to go beyond that since we will also be offering home loans and some other retail loans.

The Reserve Bank of India appears to be worried about slippages. Are you seeing some pressure on restructured accounts?

This quarter, our restructuring was of the order of Rs 800 crore (Rs 8 billion), as against Rs 1,500 crore (Rs 15 billion) in the previous quarter. The performance is in line with expectations.

RBI has sought a loan-loss coverage of 70 per cent, while your coverage ratio was around 52 per cent at the end of the first quarter. What is the coverage ratio now and how much pressure will the new norms put?

The coverage ratio remains around 52 per cent. As for the 70 per cent ratio, we have to wait for the detailed guidelines.

Your credit-deposit ratio is still around the 100 per cent level and RBI has expressed some concerns over a potential asset-liability mismatch.

The overall number may be 100 per cent but if you look at the domestic operations, it is closer to 75 per cent. The overall number is higher because of international operations, where you deal with long-term funds. You should also look at our sources of funds as we have a high level of equity capital. Our capital adequacy ratio has improved to 17.69 per cent.