As it looks to further enhance its return on equity, ICICI Bank will focus on leveraging technology to deliver innovative banking solutions and on capitalising growth opportunities as the economy grows, Chief Chanda Kochhar has said.
She also said that the bank’s focus on improving the core operating parameters has helped it absorb the higher credit costs.
“Despite the higher credit costs, we were able to achieve an improvement of 10 basis points in the return on assets to 1.86 per cent (in last fiscal ended March 31, 2015) compared to 1.76 per cent in fiscal 2014,” Kochhar said.
“At the ICICI Group, we will continue to focus on leveraging technology to deliver innovative and convenient banking solutions, capitalising on the growth opportunities that will arise as the economy grows, and sustaining our operating parameters as we grow, to further enhance our return on equity,” she said.
Addressing the shareholders in her annual letter, the bank’s Managing Director and CEO said that the the economy entered a new phase with several policy initiatives and positive trends in a number of macroeconomic indicators, but the corporate and SME sectors continued to experience challenges given the prolonged slowdown and gradual pace of recovery during the last fiscal.
This resulted “in continued additions to non-performing and restructured loans for the banking sector. Against this backdrop, we continued our calibrated approach to lending in these segments and maintained our approach of balancing growth, profitability and risk management,” she said.
Kochhar said that the formation of a stable government with a strong mandate had a major positive impact on sentiment and the medium-to-long term economic outlook last year.
Elaborating on the bank’s performance in the last fiscal, she said the bank focused on continued strong growth in the retail portfolio, maintaining a robust funding profile, and further improving our key operating parameters â€“- including margins and operating efficiency.
“Our non-banking businesses also achieved healthy growth and we continued to maintain a very strong capital position.”
The bank’s retail advances portfolio grew by 25 per cent year-on-year, while it mobilised about Rs 22,000 crore of current and savings account (CASA) deposits in fiscal 2015.
The CASA ratio improved from 42.9 per cent at March 31, 2014 to 45.5 per cent at March 31, 2015.
The bank’s standalone profit after tax crossed the Rs 10,000 crore mark for the first time, while its consolidated profit after tax grew to Rs 12,247 crore and the consolidated return on equity was 15 per cent, she said. KOCHHAR 2 LAST
“ICICI Bank has been at the forefront in leveraging technology including the current and emerging transformational trends of mobility, digitisation and rapid growth of social media, to bring value to our customers,” Kochhar said.
“We have leveraged our technology capabilities to facilitate faster and convenient processes, create best-in-class technology platforms and reduce transaction costs.
“Our innovations in recent years have enhanced our customer franchise and improved the overall customer experience. At March 31, 2015, we had 101 fully electronic Touch Banking branches across 33 cities.
“We have a strong presence in social media through banking on Facebook, which we further strengthened by becoming the first bank in Asia to introduce payment services on Twitter.
“We have also invested in our corporate internet and mobile banking platforms to improve the customer experience and to provide value-added solutions to the government sector,” she said.
Chanda Kochhar said that the ICICI bank expanded distribution network with addition of 297 branches and 1,136 ATMs in fiscal 2015.
“Our network of 4,050 branches is the largest among private sector banks in India, supplemented by our network of 12,451 ATMs,” she added.
“We have a strong and diversified franchise, an extensive distribution network, and have invested in creating leading technology platforms. We believe India is at the cusp of a phase of strong and sustained growth, driven by its strong fundamentals and the forward-looking policies of the government,” Kochhar said.