Financial Daily from THE HINDU group of publications
Friday, Feb 13, 2004

News
Features
Stocks
Cross Currency
Shipping
Archives
Google

Group Sites

Home Page - Private Banks
Money & Banking - Credit Market


Kamath says demand for bank funds will rise

Poornima Mohandas

Mumbai , Feb. 12

THE ICICI Bank Managing Director and Chief Executive Officer, Mr K.V.Kamath, expects the demand for bank funds to rise sharply in the medium term. The deployment of the Rs 3,500-crore that his bank is planning to raise from the public is, therefore, not an issue.

"We see great demand from infrastructure, manufacturing and of course, there is the retail mantra too", Mr Kamath told Business Line. " Besides, the (capital) market is good and stable."

He is certain that the resurgence in the economy is not a blip but rather a trend. "What we are seeing today is not a temporary phenomenon caused by global markets or commodity prices but due to reinventing of manufacturing set-ups which also translates into better clients for banks.''

Retail disbursement for the bank is expected to be upward of Rs 25,000-30,000 crore this year; the manufacturing sector as it gets efficient and globally competitive is also expected to require credit; the infrastructure sector is set to boom with the Pradhan Mantri Gram Sadak Yojana, a programme for rural roads connectivity. Therefore credit offtake is not considered an issue at ICICI Bank unlike in the rest of the banking sector submerged in an environment of excess liquidity.

"The retail market is growing at 50 per cent and we have to grow at least at that rate if not faster than market,'' he said.

ICICI Bank could have done without the public issue for another year or so "... but when you look at a company you have to look at what steps to take with a five to eight-year horizon,'' Mr Kamath said.

"We did it in 1996 and then in 1999 but there have not been frequent dilutions. People say that it came as a surprise, there is always a degree of surprise, one cannot let go of one's strategy.''

The increase in capital base will also safeguard the bank from any takeover bids by foreign players in the medium term. "We have grown to a sizeable scale and I do not expect that there will be any poaching by foreign players in the next three to four years. If it were to happen it would have happened much earlier when we did not have the scale.''

Foreign holding in ICICI Bank now stands at 72 per cent and is expected to come down to 65 per cent following the public issue in April.

The bank has no plans to divest its stake in the Kerala-based Federal Bank and South Indian Bank. It holds 20.44 per cent stake in the former and 11.38 per cent in the latter.

The share price of South Indian Bank closed on the BSE at Rs 74 on Thursday and that of Federal Bank closed on the BSE at Rs 278.95.

More Stories on : Private Banks | Credit Market

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



Stories in this Section
No landing charges for small aircraft, copters


Will political parties benefit?
Corporates go slow on ECB plans — Ratings upgrade on cards; domestic tap also attractive
Wockhardt prescribes 1:2 bonus, higher dividend
Low output buzz props up sugar
And now `grey' revolution, says Jaitley
DoT bid to prevent sell-off in Telecom Consultants
Kamath says demand for bank funds will rise
IFCI staff prefer IDBI to PNB



The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line