BW Real 500: Digital Edge

Faced with multiple challenges of a slow corporate sector affecting asset quality and profitability, the banking sector didn’t have a smooth sailing last year. But despite the headwinds, a tactical shift towards higher-rated borrowers and a focus on retail credit has seen ICICI Bank chart an outlier’s journey in the competitive world of banking.

ICICI Bank has been working on three fronts simultaneously — improving its credit framework, providing enhanced digital offerings, and sprucing up its growth inclusion activities for the masses. And its strategy seems to be paying off.

In the bread-and-butter business of loans, the banking conglomerate has seen its loan portfolio grow by 23.3 per cent, which now accounts for over 46.6 per cent of total loans. The bank took a conscious decision to grow its corporate portfolio focusing on higher-rated clients with a revised limit framework with a view to cut back on concentration risk in its portfolio.

ICICI Bank’s MD and CEO Chanda Kochhar said, “We focused on capitalising on growth opportunities while at the same time taking necessary steps to address challenges in the environment. We continued to enhance our franchise, and maintained our financial strength with robust capital levels.”

Enhancing its liabilities franchise has been a priority for the bank as cash is raw material for any banking business. The bank added Rs 193.70 billion to its low-cost savings deposits and Rs 93.5 billion to current account deposits. Its CASA ratio was 45.8 per cent as on 31 March 2016. Besides, the bank also ramped up its branch network to 4,450 branches and 13,766 ATMs making among the biggest banks in the country in size. Little surprise then, in its core operating parameters, the bank delivered a robust operating profit growth of 21 per cent.

ICICI Bank is sprucing up its digital offering continuously to reduce costs and at the same time to improve customer experience. The bank leverages technologies and was among the first banks to use smart phones for contact less mobile payments in the country. The bank launched a digital wallet ‘Pockets’ that has seen over 4 million downloads, while its app-based banking platform ‘iMobile’ has over 165 services.

In August 2016, the bank also launched UPI on its mobile banking applications, which enables customers to send and receive money using a virtual payment address. “ICICI Bank is delighted to have partnered with NPCI to introduce UPI. We are the largest player on the IMPS and NUUP platforms and have also played a key role in conceptualising this new initiative along with the NPCI. We have already received encouraging responses from users including non-ICICI Bank customers on creating their VPA using Pockets,” said Kochhar during the launch.

The bank has launched Express Home loans, which fully processes and sanctions home loans over the Web. To be able to capitalise on future loan growth, ICICI Bank has a strong tier-1 capital adequacy of 13.09 per cent and total capital adequacy of 16.64 per cent.

On the bank’s future growth, Kochhar notes, “The Indian economy is poised to build on the progress made in the last two years to move ahead on its growth path. The ICICI Group is well-positioned to address the challenges in certain sectors and capitalise on the opportunities that will arise out of India’s growth and transformation.”