Country’s largest private sector lender ICICI Bank today said it has received enquiries from potential suitors for its housing finance arm, and is expected to soon take a call on it.
ICICI Home Finance Company is wholly owned subsidiary of ICICI Bank.
The bank keeps receiving enquiries from time to time from interested parties regarding its stake in ICICI HFC but has not taken any decision to sell its stake in this company, ICICI Bank spokesperson said in a statement.
It further said ICICI Bank’s mortgage business is primarily done within the bank and this business has been growing rapidly.
“Only a very small portion of the bank’s overall mortgage business less than 10 per cent is done by ICICI Home Finance Company,” it said.
However, the spokesperson refused to comment if the stake sale would be partial or complete.
ICICI HFC had earned a net profit of Rs 197.57 crore for fiscal ended March 2015.
The company paid interim dividend of 2.75 per cent in June last year; 2.75 per cent in September; 3.25 per cent in December, and 3.55 per cent in March 2015.
Many lenders, especially public sector banks, are looking to exit from their non-core business. Central Bank of India has also announced plan to sell its housing finance business. Punjab National Bank has already sold part stake in its housing finance arm.
As per the latest annual report of ICICI Housing Finance Company, the mortgage market continues to grow, especially in Tier III & IV cities, driven by primary consumption. This has led to increased focus by most organised lenders into these markets.
Absorption and supply in such markets is balanced leading to stable prices, it said.
“Our Company continues to focus on these emerging markets, which provide a reasonable growth opportunity. We will continue to invest and build distribution and organisational capabilities and offer mortgage related products and services in this markets,” it said.