It plans to expand to 500 more locations in tier II, III and IV cities like Ambala, Bikaner and Tuticorin and grow the business to Rs 2 lakh crore by FY20
ICICI Bank will focus on rising affordability of Indians and expand to 500 new locations to grow its mortgage business to Rs 2 lakh crore by March-end 2020.
The country’s largest private sector bank Wednesday announced its mortgage business has crossed Rs 1.5 lakh crore, making it the largest mortgage lender among private sector banks.
"We will continue to expand our mortgage portfolio at an annual growth rate of over 15 percent and aim to cross Rs 2 lakh crore by the end of 2019-20,” said Anup Bagchi, Executive Director, ICICI Bank.
He said with fiscal incentives from the government in the affordable housing segment, affordability index (for homes) being at an almost all-time high with incomes rising and property prices not rising enough and new affordable houses being built, the demand for houses is increasing.
In comparison, government-owned State Bank of India's (SBI) home loan book stands at Rs 3.13 lakh crore, more than double of ICICI Bank’s book.
While ICICI Bank's mortgage or home loan book constitutes close to 52 percent of its retail loans, SBI’s home loans account for more than 57 percent of its retail portfolio. Its average ticket size is just over Rs 30 lakh, while SBI's average is between Rs 23 lakh to Rs 24 lakh.
To add perspective, ICICI Bank's other private rival HDFC or Housing Development Finance Corporation's individual home loan book was at about Rs 2.62 lakh crore while Indiabulls Housing Finance's total loan asset was at Rs 1.22 lakh crore as on March-end 2018.
Bagchi points out the average age of home loan borrowers has come down to 35-40 years from 40-45 years almost 10 years ago.
Given this confidence of growing new borrowers, the bank plans to expand to 500 more locations in tier II, III and IV cities as well as micro-markets on the periphery of major cities such as Ambala, Bikaner, and Tuticorin, Bagchi said.
Currently, ICICI Bank is present in over 1,000 locations. It has also picked up affinity branches and plans to add over 560 processing centres for its mortgage business, Bagchi said.
The bank has also enabled developers to obtain approvals for their projects in a paperless manner. Using the technology, the bank has approved 2,000 new housing projects online, thereby helping faster and quicker loan approvals. It has also enabled an online repository of 30,000 approved projects across 40 cities.
“The Pradhan Mantri Awas Yojana concept is picking up and there is big traction for the Housing for All scheme,” Bagchi said, adding, with RERA or Real Estate (Regulation and Development) Act coming in, trust in customers has increased.According to him, “All of this bodes well for the sector from the demand side… In this sector, demand will not be an issue and if we de-congest the supply. Overall, the sector is getting well organised and hence there is a lot of potential in the segment.”