India’s second largest private lender ICICI Bank Ltd. is developing a 360-degree strategy, while investing heavily on technology. This, analysts say, is improving its growth runway, as the bank remains the top pick among private banks for them.
While the focus continues to be to improve profitability in a risk-caliberated manner, the tech initiatives will push ICICI Bank above its peers, analysts noted. The lender held an analyst meet last week to showcase the initiatives it has taken over the last few years.
“ICICI Bank appears to be several notches above its peers, when it comes to business transformation, led by tech initiatives and these digital capabilities will enable the bank to deliver superior growth over years to come,” Motilal Oswal said in a report on Monday.
The brokerage expects ICICI Bank to deliver 20% compounded annual growth rate on its loan book, return on equity of 17.2% and return on assets of 2.1% by FY24.
The bank’s 360-degree approach covers family offices, employees, supply chain financing, statutory payments and corporate solutions, enabling better service quality to its corporate customers.
As a strategy, the bank has also merged its rural banking centers with retail centers, fully aligned its retail assets distribution with liabilities, and converged micro, small and medium enterprises and private banking teams with retail and credit business centers, co-located in its business center, Emkay Global analysts said.
The bank is now adopting a corporate 360-degree approach, whereby the corporate relationship manager’s role has been changed to the role of a co-anchor, curator, connector, and facilitator, the brokerage said. This will not only drive the lending relationship but also capture the corporate ecosystem to offer payments, liability, treasury, forex, derivatives among others, Emkay Global said.
On the retail front, the bank’s efforts to lower acquisition cost through partnerships and improving product offerings is also paying off. For example, its credit card product with Amazon Inc has helped build a 3.5 million customer base, where 35% of the customers are new to bank. The spends on these cards at 20% higher than the industry average, while risk is 30% lower, analysts noted in their reports.