ICICI Bank, the India-based private bank, has set up a new commercial banking division, reported Business Standard. It has selected a team of 450 employees from its various divisions and appointed Kalpesh Kikani, Senior General Manager at Investment Banking Division, to Head this new vertical.
The new division is expected to provide services payments, collections, letter of credit (LCs), foreign exchange services, banker’s guarantees and loans to meet the working capital expenditure of corporate clients. The lender has already 26 branches dedicated to commercial banking. However, it intends to have four more branches by the end of 2009.
Mr. Kikani said: “There is nothing new about this business. Old banks have been doing this for ages. This is a difficult business to do well, but it can be a very profitable business. We are known as an underwriter for big-ticket loans. Now, we want to tell companies that they can also come to us for their everyday business.”
“We are telling our people that instead of going after one large-ticket term loan get us a large number of small-ticket LCs,” he added.
Hit hard by a steep fall in the proportion of retail assets in its loan book (from 69% three years back to 49% this year), the bank is planning to cut down the size of its retail loan book and shift its focus to corporate clients.
