ICICI looking for Loan portfolio of European Banks
ICICI Bank looking to buy loan portfolio’s of European banks. “The opportunity to pick up some good assets at good pricing clearly exists. So, that’s what we are looking at all the time and exercising it whenever we see the right opportunity,”.
We have picked up some which are India-related assets, but I would say not very large number, because given the fact that on the other hand the ability to raise funds currently has also become more expensive,” she said.
European banks are strugling to raise their capital cushions to become more resilient against future shocks, which they can do by increasing equity they hold or by shrinking their asset base.
The European Banking Authority has said banks need more than 100 billion euros of new capital, but the International Monetary Fund warned in September EU banks faced possible losses of 300 billion euros as a result of sovereign and interbank lending risks.
Ceo, who was ranked fifth in Fortune’s 50 most powerful women in business, ruled out the acquisition of any European bank.
INDIA ON SOUND FOOTING
ICICI sees good credit momentum in India from car loans, mortgages and working capital, Ceo said.
However, credit demand for new corporate projects was slow, she said, and warned of slowing overall loan growth in the fiscal year 2014 if new projects do not start over the next six to 12 months.
Indian companies have been delaying investment plans as rising interest rates make projects expensive. Indian policy interest rates are at their highest since the global financial crisis in 2008.
ICICI is looking to push retail loans after lying low for about two years, Ceo said, as it has cleared its unsecured loan portfolio.
The lender, which had aggressively sold unsecured credit cards and personal loan in the heady days before the 2008 crisis, saw its non-performing loans rise more than 5 % in 2010 as a large number of customers defaulted.
ICICI was also India’s most prolific card issuer during the boom but halved its cards portfolio to about 48 billion rupees ($1.08 billion) at end-March 2011 from 2008.
“From hereon you will actually see a net increase in retail business taking place because we are done with the reduction that we needed to do. Our unsecured lending will be very, very selective compared to what it has been in the past,” she said.
The bank has not cut off lending to any particular sector, but is selective about real estate and power projects.
Shares of ICICI Bank, which the market values at nearly $16.5 billion, closed down 2.5 % at 726.7 rupees.
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