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Anirban Nag & George Cherian
MUMBAI, Oct 16: ICICI Bank has overtaken IndusInd Bank by mobilising the highest quantum of deposits among nine new-generation private sector banks. Global Trust Bank has also surpassed IndusInd, which has now been relegated to the third position (as on September 30, 1998) in terms of deposit mobilisation.
ICICI Bank's deposits base stood at Rs 4,366 crore in September against IndusInd's Rs 3,658 crore. Global Trust Bank has notched up a deposit base of Rs 3,850 crore.
The nine new private sector banks have recorded a 32 per cent growth in their advances during the period ended September 30, 1998. Advances, which stood at Rs 8,720 crore in the year-ago period, have risen to Rs 11,500 crore as on September 30, 1998.
During the period ended September 30, 1997, these banks recorded a 60 per cent growth in their advances over the corresponding period in the previous year. "Poor credit offtake due to the general slowdown in the economy coupled with the credit bases of the new banks growing larger has led tothe fall in growth," an analyst said.
During the period ended September 30, 1998, the total deposit base grew to Rs 23,000 crore from Rs 16,107 crore in the corresponding period of the previous year, indicating a growth of 43 per cent. Banks now focus on building their deposit bases by increasing their savings and current account portfolios which will help reduce their cost of funds.
With deposit growth having been consistently higher than the growth in advances, banks have been burdened with huge amounts of resources which they are now hard put to deploy. With its advances base standing at just Rs 1,520 crore, ICICI Bank has had to deploy Rs 2,020 crore in investments as on September 30, 1998. While GTB has parked Rs 1,500 crore in investments, IndusInd has put in Rs 1,529 crore.
The credit-deposit ratio of all banks except IndusInd Bank and UTI Bank fell below 50 per cent as on September 30, 1998. While IndusInd had advances of Rs 2,340 crore against a deposit base of Rs 3,658 crore, UTI Bank's creditbase was at Rs 1,625 crore against a deposit base of Rs 2,300 crore.
Though the new banks have created a business mix where at least 30 per cent of their income is from fee-based activities, the rise in deposit levels without a corresponding increase in credit is likely to impact the profitability of banks during the first half of the current year.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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