“Resource Management has posed a formidable challenge for the banking industry”
will banks react to such a slowdown in growth? Will the overwhelmed investor, who is on cloud nine and still aiming for new heights, spare them for value erosion? And what are banks strategising at a time when their top-lines have already succumbed to successive hikes in borrowing costs, as the results for the quarter ending March 2007 indicate? Moderation in loan growth is clearly visible. After three increases by ICICI Bank in its benchmark lending rate since December, loan disbursals on both homes and autos fell from a year earlier in the three months to March 31, a fact that has been confirmed by both Bajaj Auto and Hero Honda, India’s foremost two wheeler companies. For FY07, retail loan growth has materially slowed down, housing growth has declined to around 18-20% from a 35% growth rate in FY06. For ICICI Bank, retail advances have grown by 39% in Q4, FY07 to Rs. 1.28 trillion, which is less than the 64% growth in FY ’06 and 50% growth in Q3, FY ’07. Retail advances of HDFC Bank grew by 33.4% for FY ’07, as compared to 79.7% growth for the previous year. Even public sector banks faced a similar fate.
For Complete IIPM Article, Click on IIPM ArticleSource : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) InitiativeFor More IIPM Article, Visit Below....
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