Confident of ICICI Bank becoming India’s biggest in terms of size as well overall performance, its chief Chanda Kochhar has said she would prefer to reach the top position with a profitable model.
Kochhar, who implemented her famous ‘4C-strategy’ at the bank soon after taking charge as Managing Director and CEO of India’s biggest private sector bank in 2009, also said that this strategy has worked well and a foundation has been put in place now for the bank to grow at a faster pace than industry.
However, this growth won’t be at the cost of profitability or by getting into a high-risk business model, Kochhar said.
Soon after the impact of global economic crisis started becoming visible in India, ICICI instituted a ‘4-C strategy’ of improving CASA (current and savings account) deposit growth, Cost control, Credit quality improvement and Capital conservation to position itself for the next phase of growth.
Asked whether the bank would be back on its aggressive growth path, for which it used to be known earlier, as the 4-C strategy has been implemented successfully, Kochhar said the bank would definitely grow, but this would be balanced with profitability and risk management.
“What I believe is that yes we will grow. There is no doubt about it. Growth is not just market share and growth will not be at the cost of profitability or at the cost of picking very high risk credit. I think it is possible for us to show growth and to grow at decent levels while maintaining this balance with profitability.
“And our growth will be at a faster pace than the industry. So, we think that at whatever rate the industry grows at, we will grow at 2-3 percent higher than the industry. And that we will not grow by sacrificing profitability or risk, but because we have the franchise, we have the network, we have the product, and we have the sound cost of funding, and so on,” Kochhar said.
Asked by when ICICI Bank would become India’s biggest bank, 47-year-old Kochhar said she would not chase a number just for the sake of chasing, and would rather prefer keep moving in that direction with a sustainable profitable growth.
ICICI Bank is currently India’s second largest bank after state-run SBI, while it is the biggest in the private sector.
“We should definitely get there and I am sure we will get there, but we should get there with a profitable model.
“If India grows at 8 percent, the Indian banks will grow much faster. But whether our growth rate will be 18 or 24 percent, that will depend on whether the industry is growing at 15 percent or 20 percent and that would depend on whether India is growing at 6 percent or 8 percent,” she said.
Kochhar further said, “I would not look at only size, but I would look at the overall performance… In the last few years, the progress that we have made at various parameters, that has been very very good. So, my focus is that we should keep moving on a sustainable profitable growth and not just chase a number for the sake of chasing.”
“…I would say that we are very satisfied with the model that we have implemented and our focus is to continue on that model. The best, or the biggest, is what I would leave for the world to say,” she said.