International BusinessAuto, home loans pick up, lending rates may harden: ICICI
India"s second largest lender, ICICI Bank, has seen growth returning in its home and auto loans portfolios in the second quarter on the back of improving sentiments in the credit market, its chief said.
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The bank, however, expects lending rates in the industry to harden in the second-half of the year in line with the pick-up in loan off-take. ICICI said that it has aligned its lending rates with the market.
"There is growth already seen in auto and home loans...In the latter part of this fiscal, I expect that project finances will also pick up...We will continue to focus on home, auto and infrastructure loan segments," ICICI Bank"s Managing Director and CEO, Chanda Kochhar, said.
With a revival expected in the economy, credit off-take is expected to improve in the second-half of this fiscal and corporates are expected to resume their projects, Kochhar said on the sidelines of a FICCI-IBA seminar here.
Noting that lending rates have bottomed out in the second quarter, Kochhar said that rates will gradually start rising in the second-half of the year with a pick-up in credit off-take.
"Lending rates have bottomed out in the second quarter...Gradually rates will harden...From here credit off-take will pick up very gradually and the increase (in rates) will be in line with the pick-up in credit off-take," Kochhar said.
With builders correcting housing prices, demand has returned in the home loan market, Kochhar said.
However, demand continues to be low in those quarters where correction is yet to happen, she said.
Also, with bond yields rising, banks are unlikely to record a significant revenue from the treasury side in the second quarter, Kochhar said.