For ICICI Bank, retail advances have grown by 39% to Rs.1.28 billion, whic
h is lesser than the 64% yoy growth in FY06 and 50% growth in Q3 FY07. Retail advances of HDFC Bank grew by 79.7% for FY06, as compared to 33.4% growth for FY07. Even public sector banks, such as Canara Bank reported 24% growth in advances to Rs.985 billion, which is a signify cantly lower compared to 31.5% growth in FY06 and 28.6% growth in Q3 FY07. This is what M. B. N. Rao, CMD, Canara Bank told B&E when asked about the slowdown: “After three successive years of high growth in credit, resource management has posed a formidable challenge for the banking industry. Monetary tightening and competitive pressures did have an influence on banks’ ability to raise resources in a cost effective manner.”
h is lesser than the 64% yoy growth in FY06 and 50% growth in Q3 FY07. Retail advances of HDFC Bank grew by 79.7% for FY06, as compared to 33.4% growth for FY07. Even public sector banks, such as Canara Bank reported 24% growth in advances to Rs.985 billion, which is a signify cantly lower compared to 31.5% growth in FY06 and 28.6% growth in Q3 FY07. This is what M. B. N. Rao, CMD, Canara Bank told B&E when asked about the slowdown: “After three successive years of high growth in credit, resource management has posed a formidable challenge for the banking industry. Monetary tightening and competitive pressures did have an influence on banks’ ability to raise resources in a cost effective manner.”Since the composition of retail loans was more in total advances, a small twist in retail loans a
lso twisted the bottom lines of many banks. ICICI and SBI happen to be classic examples. And as expected, banks with more exposure to retail banking missed analyst expectations the most. Besides, net NPA ratio of ICICI bank increased to 0.98 as on March 31, 2007, as compared to 0.71 a year ago. O. P. Bhatt, Chairman, SBI, too confirmed the defaults, even before announcing results (so that markets would factor this in before making any kind of expectations).
For Complete IIPM Article, Click on IIPM Article
lso twisted the bottom lines of many banks. ICICI and SBI happen to be classic examples. And as expected, banks with more exposure to retail banking missed analyst expectations the most. Besides, net NPA ratio of ICICI bank increased to 0.98 as on March 31, 2007, as compared to 0.71 a year ago. O. P. Bhatt, Chairman, SBI, too confirmed the defaults, even before announcing results (so that markets would factor this in before making any kind of expectations).For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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