It is time to pay shareholders back: ICICI

ICICI Joint MD Chanda Kochhar has said she would focus on more benefits to shareholders.

Not the one to forget the people who supported them at the time of trouble, ICICI Bank Joint Managing Director Chanda Kochhar has said she would focus on more benefits to shareholders.

“My endeavour would be to focus on improving Returns on Equity. I must acknowledge that shareholders have given us equity capital time and again, and at the right time, while imposing lot of faith in us,” Kochhar, ICICI Bank’s CEO and MD designate, said.

She was responding to a query as to what her gift would be to shareholders after she takes over as MD and CEO of the India’s largest private bank, after the present incumbent K V Kamath retires on April 30.

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Kochhar, who dreams of making ICICI Bank the most profitable bank, said, “I think people in India got a little more worried about our international operations. So the effort would be to continue to communicate with every one so that we are able to clarify.”

Troubles were caused due to rumours casting doubts on the financial health of the bank, leading its share plummeting October to a year’s low. Kochhar said: “I think as of now we are very well capitalised. So the focus would be not to raise more capital but to work towards improving the RoE.”

Asked what she would offer to the customers as a gift now, Kochhar said, “In the current environment, I see interest rates softening and as that happens we will pass on efficiencies that we achieve to our customers but when and how much, it is little too early to predict.”

Asked if the bank would move into a single-digit interest regime now and why ICICI Bank is lagging behind public sector lenders in lowering rates, Kochhar said the cost of deposits “for banks has not come down. We have to keep the interests of our shareholders in mind. So that is the reason we have not jumped into it.”

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Elaborating, she said that while she would look at all segments of banking for improving profitability, attention would be on bringing down the cost of borrowing by focusing on low-cost retail deposits.

“One has to look at how to continuously improve the Net Interest Margin (NIM). That we will do by continuing to change the structure of our liabilities, and getting more and more retail liabilities so that we can improve NIM,” she said.

ICICI Bank retired wholesale deposits of over Rs 24,000 crore in six months ended November 2, while increasing current and savings accounts deposits (CASA) by Rs 3,000 crore.

CASA had gone up from 25 per cent to 30 per cent during the year ended September of total deposits.

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Secondly, the bank would try to cut operating cost, she said, adding it would also keep very a close eye on credit losses as well.

Kochhar also said that the bank needs to explore opportunities. “In the current scenario treasury (operations) may be an opportunity,” she said.