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'We have no plans to hit the market for 3 yrs'

Despite huge provisioning drawing down from reserves -- which has impacted ICICI Bank's capital adequacy ratio -- it has no plans to hit the market over the next three years.

The financial institution aims at a 15-20 per cent asset growth per annum. It may use proceeds of the 16 per cent stake sale to make general provisioning for strengthening the balance sheet further, said ICICI Bank managing director and CEO KV Kamath in an interview with Business Standard. Extracts:

ICICI Bank is now the largest private bank. And yet it is a very distant second to the State Bank of India. When do you expect to come close to SBI?

We have no intention to compete with SBI in terms of size. Our focus is to grow at a rate of 15-20 per cent per annum. We may originate more assets but we will sell them down. The focus is on a healthy growth, not unbridled expansion of the book.

Till last year, the ICICI family was busy acquiring banks and non-banking financial institutions. Do we see a clear shift in strategy?

Till recently there was no sell-down market. Now that market is developing. We will sell down both retail as well as project loans and grow the way we want to. We will make profits by selling down assets. After all, the growing bottomline is the most important aspect of business.

Does that mean the acquisition phase is over?

Yes, it is. There will be no acquisition for the time being, at least for the next few years. The focus is on organic growth.

Can your balance sheet sustain the growth? When do you plan to make a public issue?

We do not plan to hit the market for the next three years.

The main driver of growth for ICICI Bank seems to be housing finance. Does that mean you will wipe out all housing finance companies?

Certainly not. There is enough space for every player. As far as we are concerned, we will disburse housing loans very aggressively. In fact, this will help us achieve the 50 per cent priority sector lending target. Out of the 50 per cent, 18 per cent will be agricultural loans and 32 per cent housing and other loans.

You have made huge provisioning and the net non performing assets (NPA) is down to 4.7 per cent. Does that mean there will not be any more hefty provisioning in future?

We don't see the necessity for bulk provisioning in future. But we may use the proceeds of the sell-off of the 16 per cent stake of ICICI which has been warehoused to make general provisioning to strengthen the balance sheet. We have a clear picture before us: the net NPA level is Rs 26 billion, restructured loans around Rs 50 billion and project loans are at around Rs 240 billion. The upside risk is clearly outlined.

Finally, do you see the profitability being hit by the priority sector lendings and reserves requirements?

Certainly not. I can't make a forward looking statement on profitability but can definitely say there will be no negative impact on the bottomline.

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