ICICI Bank 2006 Annual Report Download - page 3

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2
Message from the Chairman
The Indian economy and banking sector have
witnessed another year of robust growth. The
services sector has maintained the growth trends
seen over the past several years. The industrial
sector’s growth is indicative of the sustained
resurgence in manufacturing activity in the
country, driven by enhanced efficiency and global
competitiveness. Growth in these sectors has
resulted in rising household incomes and
stimulated growth in consumer demand.
Underpinning this growth are India’s people and
our vast pool of young talent that has emerged as
a key competitive advantage vis-à-vis other
nations. Overall, the forces of favourable
demographics, knowledge capital, industrial
competitiveness and integration with the global
economy appear to be propelling the economy
within striking distance of double - digit GDP
growth.
The banking sector mirrors these trends. Since
the early years of this decade, retail credit – the
financing of households for asset creation – has
been a major growth driver. ICICI Bank has actively
participated in this process, and indeed, played a
key role in catalysing growth in retail credit. From
a new growth horizon five years ago, this has now
become a core element of our business. Going
forward, this will continue to be a major part of
our activity. We now see several other
opportunities before us in the process of
economic development and growth of financial
intermediation.
Inadequate infrastructure continues to pose a
bottleneck in India’s growth. Power, airports and
ports, urban rejuvenation and rural infrastructure
are all areas where the current facilities are
inadequate to support the growth targets that we
have set for ourselves. There are encouraging
developments in these segments, with policy
initiatives that seek to combine the essential
government interventions with the benefits of
private participation. ICICI Bank is focusing closely
on this area, and hopes to play a key role by
leveraging its strong competencies in this
business. We will seek to create financing
structures to promote the flow of financing
towards infrastructure projects, while adopting
appropriate risk mitigation measures to ensure the
sustainability of these projects and the exposures
taken by lenders.
While the performance of the agricultural sector
too has improved, after a year of low growth, this
sector continues to be plagued by dependence
on the vagaries of climatic conditions and
inefficiencies in the agricultural value chain. It is,
in a way, the weak link in India’s growth equation