Smaller towns driving ICICI’s home loans,book crosses Rs 1 trillion

By: |
Mumbai | January 14, 2016 7:16 PM

The lingering slump in the main realty markets has forced the largest private sector lender ICICI Bank to focus on smaller towns to ramp up its home loan book that has now crossed the Rs 1-trillion-mark.

icici l reutICICI Bank achieved the milestone of Rs 1-trillion in home loan book early December

The lingering slump in the main realty markets has forced the largest private sector lender ICICI Bank to focus on smaller towns to ramp up its home loan book that has now crossed the Rs 1-trillion-mark.

Executive Director Rajiv Sabharwal told reporters in a concall that the bank has always been serving the tier 2 and 3 towns, but there have been concerted efforts on these markets in the past three years which has paid off so well for the lender that smaller centres now account for 30 per cent of the home loan book.

He said as against a 20 per cent growth in the 11 top cities, home loans in tier-2 and 3 towns are clipping at 30 per cent now, helping the bank’s overall mortgage book to grow 25 per cent annually.

Sabharwal, however, admitted that the continuing focus on the smaller towns has resulted in a marginal dip in the average ticket size, which has come down to Rs 35 lakh from a Rs 37 lakh.

The tier-2 and 3 centres which are delivering higher growth include Rajkot, Raipur, Nashik, Agra, Aurangabad etc, Sabharwal said.

The bank is confident of maintaining the overall 25 per cent growth rate in the mortgage book, thanks to its deeper distribution network and the attractive product mix, he said.

According to a July 2015 report by brokerage Knight Frank, a whopping 7 lakh-plus ready-to-move units were unsold in the 8 major metros and it will take over three years to exhaust the inventories. The national capital region accounted for a bulk of it with 1.9 lakh homes.

Overall home sales dropped 19 per cent and new launches by a whopping 40 per cent during January-June 2015 in the top cities of Delhi-NCR, Mumbai, Bengaluru, Pune, Kolkata, Chennai, Hyderabad and Ahmedabad, according to this report.

ICICI Bank achieved the milestone of Rs 1-trillion in home loan book early December and Sabharwal claimed this makes it the biggest private sector lender in the mortgage space, where non-banking lender

HDFC and State Bank of India are the dominant players.

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