Latest news with #Bakhshi
Business Recorder
09-07-2025
- Business
- Business Recorder
Unsafe buildings: ABAD underscores need for comprehensive reforms
KARACHI: The Association of Builders and Developers (ABAD) has demanded for immediate legislative action and comprehensive reforms to address the growing crisis of unsafe buildings in Karachi following the recent tragic collapse of a five-story building in Lyari. Speaking at a press conference held at ABAD House, Muhammad Hassan Bakhshi said that the competent authority should take immediate legislative action and comprehensive reforms to address the growing crisis of unsafe buildings in Karachi to avert tragic incidents of building collapse in the city. Bakhshi along with Senior Vice Chairman Syed Afzal Hameed, Vice Chairman Tariq Aziz, and other said that the city has witnessed 12 such incidents resulting in 150 deaths over the past few years, attributing these tragedies to 'corruption, greed, and negligence.' The ABAD chairman also criticised the Sindh government for failing to enact proper legislation regarding dilapidated buildings, adding that a disturbing pattern where property owners deliberately wait for buildings to collapse to claim plot ownership was observed. He requested the Sindh government to find solutions for approximately 700 identified unsafe buildings across the city. 'These buildings should be inspected with the assistance of National Engineering Services Pakistan (NESPAK),' he urged. ABAD chairman also pointed out the widespread illegal construction in the city, where additional floors are being added to existing structures without proper authorisation. 'These constructions put public life and property at risk,' he said and added that such buildings typically have a lifespan of only 15-20 years. Bakhshi alleged that local administration, police, and relevant authorities are complicit in these illegal activities, while vulnerable populations are forced to live in these dangerous structures. He urged the government to increase compensation amount from Rs 1 million to Rs 2.5 million. The chairman ABAD further revealed that over the past seven years, authorities like MDA and LDA have collected over Rs 25 billion rupees for residential schemes that have never been delivered to the public. Bakhshi proposed that ABAD could construct dilapidated buildings within 700 days and is prepared to build 100,000 houses if requested by the Sindh government, suggesting the government to collaborate with Chinese companies in this regards. Copyright Business Recorder, 2025
Business Recorder
01-07-2025
- Business
- Business Recorder
ABAD undertakes significant constitutional reform
KARACHI: Association of Builders and Developers (ABAD) has undertaken its most significant constitutional reform in over five decades, approving sweeping amendments to modernize its governance framework and comply with evolving regulatory requirements. According to the details, ABAD has formally adopted the amendments to its Memorandum and Articles of Association during a Special General Meeting at ABAD House. The comprehensive reforms mark the first substantial revision to ABAD's founding documents since the organization's establishment in 1972, addressing structural changes necessitated by Pakistan's transformed legal and regulatory environment. The constitutional overhaul comes in response to recent directives from the Directorate General of Trade Organizations (DGTO), which has mandated all established trade associations to align their governing documents with contemporary standards. The approved amendments introduce several pivotal organizational modifications. Most notably, the posts of Regional Chairman and Vice Chairman have been eliminated from ABAD's official structure, responding to DGTO objections outlined in Article 1 of the existing constitution. Under the revised governance model, sub-committees will now operate under Executive Committee oversight through amended Article 9(iii)(6), with membership expanded from two to five positions to enhance operational capacity. Regional membership processing has been restructured while maintaining established channels. New applications will continue flowing through Regional Committees, but these bodies will now function as Executive Committee appointees under the modified Article 9(v)(6). Additional revisions affect Articles 8(b)(ii) and 16(2), along with Clause 14 governing membership transfer procedures, streamlining administrative processes across the organization. 'Our existing Articles had remained static for 53 years, despite fundamental shifts in Pakistan's legal framework,' Chairman Bakhshi said. 'These amendments position ABAD to operate more effectively within today's regulatory environment,' he added. The meeting drew significant participation including Senior Vice Chairman Syed Afzal Hameed, Vice Chairman Tariq Aziz Memon, Southern Region Chairman Ahmad Owais Thanvi, and Hyderabad Sub-Region Vice Chairman Abdullah Jan Memon. Former chairmen Altaf Tai and Anwar Gagai also attended the proceedings. Bakhshi termed the reforms as essential for strengthening ABAD's advocacy capabilities and government relations. 'These changes will enable more effective collaboration with government institutions and enhanced representation of construction sector interests,' he stated. The amendments received majority approval following extensive member deliberations, reflecting broad consensus on the need for organizational modernization. Copyright Business Recorder, 2025
Indian Express
28-04-2025
- Business
- Indian Express
The silent revolution: How ICICI Bank is closing in on HDFC Bank
There's a quiet shift happening in Indian banking that few outside financial circles are talking about. ICICI Bank, traditionally viewed as India's second-largest private lender, is steadily gaining ground on the long-time market leader, HDFC Bank. And it's happening faster than most banking veterans ever anticipated. The narrowing gap ICICI Bank's corporate loan book now stands at Rs 2.8 lakh crore, while HDFC Bank 's is at Rs 4.8 lakh crore. Now, you might think that HDFC's corporate loan book is almost double of ICICI's; however, the catch is that while ICICI's corporate loan book has grown almost 12% in the last one year, HDFC's corporate loan book has decreased 3.6% in the same period. The market seems to be noticing, too. Over the past six years, ICICI Bank's market cap has shot up by nearly 322%. During that same period, HDFC Bank managed just 108% growth. Back when Sandeep Bakhshi took the reins at ICICI Bank in 2018, the bank's valuation was 64% behind HDFC Bank. Now it's just 30% behind. That's not just catching up—that is genuinely narrowing the gap. The Bakhshi touch Most banking leaders tend to be either aggressive risk-takers or extremely cautious players. Bakhshi has somehow managed to be neither and both simultaneously. Public sector banking culture in India typically means conservative lending practices and steady, unspectacular growth. Private banking usually suggests aggressive targets and rapid expansion. Bakhshi has created a hybrid approach that's working remarkably well. The strategic U-turn Just 18 months ago, if you'd asked me about ICICI Bank's growth strategy, I would have pointed to its retail banking focus without hesitation. The bank had built an impressive retail portfolio, spreading risk across millions of borrowers while driving steady growth. But 2024 has witnessed a fascinating strategic reversal. For the first time in over a decade, corporate banking has become ICICI Bank's primary growth engine. Retail lending grew by a respectable 8.9%, but corporate banking expanded by 11.9%. I watched this shift with real interest because corporate loans are traditionally a double-edged sword. They come with larger ticket sizes and potentially better margins than retail loans, but they also concentrate risk. One bad corporate loan can cause more damage than hundreds of problematic personal loans. HDFC Bank's post-merger struggles When HDFC Bank merged with HDFC Ltd in 2023, it created a massive banking giant. But it didn't come without its challenges. While the merger added a huge loan portfolio, it didn't come with enough new deposits. This led to a big problem: the bank's loan-to-deposit ratio (LDR) shot up to over 100%, meaning they were lending out more than they had in deposits—a risky situation for any bank. Think of it like this: imagine having Rs 100 in your checking account, but you've already loaned out that same Rs 100. Where do you get money to lend more? That's essentially the position HDFC Bank found itself in after the merger. To tackle this, HDFC Bank had to make some tough choices. The bank slowed down lending growth in FY25 to help bring the LDR down. At the same time, the bank worked hard to boost its deposits, opening 717 new branches and seeing a surge in term deposits as customers rushed to lock in higher rates. By March 2025, all this effort paid off, and the LDR dropped to 96.5%. While it's an improvement, it's still higher than other big players in the market. For example, ICICI Bank, which has been managing its LDR much better, stood at a much more comfortable 82.4% by the same time. That gives ICICI Bank more room to grow without worrying as much about liquidity. Looking ahead, HDFC Bank is hopeful that the improving market conditions will continue to help with deposit growth. However, as loan growth picks up again, they expect the LDR to return to a more stable 85–90% only by FY27. So, the road to recovery is still a bit long. And let's not forget about margins. Since many of HDFC's loans are tied to the repo rate, rate cuts are felt quickly by borrowers but take longer to filter through to depositors. This means lending profits are squeezed faster than deposit costs, causing some margin pressure. That said, there are some positives to focus on. The share of high-cost borrowings from HDFC Ltd is dropping, which is easing some pressure on margins. Plus, as the bank's new branches start maturing, they're likely to see more low-cost CASA (current account, savings account) deposits—which should help boost margins down the road. HDFC Bank is slowly but surely getting its house in order. Deposits are growing, the loan book is stabilising, and the strategy is working. But it's still playing catch-up. On the other hand, ICICI Bank, with its more balanced LDR and healthier financials, has a lot more room to grow its loan book without the same constraints. They're in a stronger position to capitalise on opportunities, while HDFC Bank works its way through post-merger adjustments. Quality first, volume second Having watched several banks crash and burn from aggressive corporate lending in previous credit cycles, I was particularly interested in examining the quality of ICICI Bank's expanding corporate loan book. What I found was reassuring. A remarkable 76% of ICICI Bank's corporate loans are to top-rated companies. Even more telling, its BB-and-below-rated loan book (the riskier segment) stands at just 0.3%—significantly better than HDFC Bank's 4.3%. It suggests that ICICI Bank isn't just grabbing market share for the sake of growth. The bank is selectively targeting high-quality borrowers who can weather economic storms. This disciplined approach could prove crucial if economic conditions deteriorate. The profit engine Looking beyond growth metrics, I was struck by ICICI Bank's profitability numbers. Banking ultimately comes down to margins—the spread between what you pay for funds and what you earn on loans. Here's where things get interesting: Even with a more aggressive stance, ICICI Bank's profit growth in FY25 came in at 15%, ahead of HDFC Bank's 11%. And while both banks grew their net interest income (NII) at roughly the same pace, ICICI Bank managed to maintain a net interest margin (NIM) of 4.41%, compared to HDFC Bank's 3.65%. That's a big gap in banking. Margins are the bread and butter of a bank. It's the difference between how much they pay for money (deposits) and how much they earn from it (loans). And what makes ICICI Bank stand out is that it didn't have to go all out slashing rates or offering sky-high deposit rates. It stayed disciplined—and still made more money. Let's go a step further. Because beyond growth, you want to see how well a bank is using its capital. ICICI Bank's return on equity (ROE) is at 17.4%, while HDFC Bank's is at 14.39%. Return on assets (RoA) is another metric investors love, and ICICI Bank is clocking in at 2.2%, again better than HDFC Bank. Even if ICICI Bank's ROE moderates slightly over the next few years—analysts expect it to be around 16%—it's still playing from a position of strength. The FY25 revelation ICICI Bank posted an 18% year-on-year increase in net profit for Q4 and a 15.5% rise for the full fiscal year, reaching Rs 47,227 crore. Its net interest income grew by 11%, supported by a robust NIM of 4.41%. HDFC Bank, while still larger overall, showed signs of post-merger indigestion. Its net revenue actually declined slightly year-over-year, though net interest income did rise by 10.3%. Its NIM of 3.65% (with a core NIM of 3.46%) fell significantly short of ICICI Bank's performance. In absolute terms, HDFC Bank maintains its lead with total assets of Rs 39,10,200 crore, compared to ICICI Bank's advances of Rs 13,41,766 crore, along with a larger deposit base as well. But the momentum clearly favours ICICI Bank. Its loan portfolio expanded by 13.3%, while HDFC Bank grew its advances at roughly half the rate of its deposit growth—another sign of its cautious stance amid high CDR (credit deposit ratio) pressures. The ICICI securities advantage Another factor boosting ICICI Bank's prospects is its recent merger with ICICI Securities. While covering this development, I realised this wasn't just a routine corporate reorganisation – it delivers concrete advantages. The merger gives ICICI Bank access to approximately Rs 14,000 crore of the brokerage's cash reserves, which can immediately be deployed for lending. Additionally, it brings in about Rs 16,000 crore in term loans, primarily margin funding for securities traders. Three paths to leadership Based on current trajectories and my understanding of both banks' strategies, I see three paths for ICICI Bank to potentially overtake HDFC Bank as India's most valuable private lender. 1. The corporate lending path: If current trends hold, ICICI Bank could become the leader in corporate lending within three years—even if it remains smaller in overall balance sheet size. 2. The profitability path: ICICI Bank's superior margins and return ratios could convince investors to assign it higher valuation multiples, potentially overcoming HDFC Bank's size advantage. 3. The growth momentum path: ICICI Bank added 460 new branches last year, while HDFC Bank opened 717 branches. This aggressive physical expansion, combined with higher overall growth rates, could eventually erase HDFC Bank's size advantage through the power of compounding. Despite its impressive run, ICICI Bank faces several challenges that could complicate its ascent. First, ICICI Bank appears to have a higher risk appetite than HDFC Bank. Its risk-weighted assets to total assets ratio stands at 76% versus HDFC Bank's 68%. While well managed so far, this higher risk tolerance could become problematic if economic conditions deteriorate. Second, the expected lower interest rate environment poses challenges for all banks. ICICI Bank's growing proportion of repo-linked loans (up from 41% to 53% over three years) increases its sensitivity to rate cuts. Perhaps most significantly, Bakhshi's term ends in October 2026. In May 2024, The Morning Context reported that ICICI Bank CEO Sandeep Bakhshi wanted to step down. The stock slipped 1%, but Bakhshi quickly denied it, saying he's staying on till October 2026. Since taking charge in 2018, he's tripled the stock price, slashed bad loans, and pushed ICICI Bank's market cap past SBI's to Rs 8.09 lakh crore. A lot now depends on whether he stays—and who takes the helm if he doesn't. Investors are watching closely. The investor's perspective I've noticed an interesting shift. Increasingly, the decision between these two banking giants comes down to investment philosophy rather than clear-cut superiority: HDFC Bank represents size, stability, and proven asset quality—the banking equivalent of a blue-chip stock with lower volatility. ICICI Bank offers stronger growth momentum, better margins, and higher returns—potentially more rewarding but with slightly elevated risk. Several fund managers I know have opted to maintain positions in both banks, seeing them as complementary rather than mutually exclusive investments. As one of them told me, 'It's like having both a reliable sedan and a sportier model in your garage—each serves a different purpose.' The gap between India's top two private banks is narrowing more rapidly than anyone expected just a few years ago. ICICI Bank's strategic shift toward quality-focused corporate lending, combined with its disciplined approach to profitability, has transformed it from perpetual runner-up to legitimate challenger. Just a few years ago, the idea that ICICI Bank might one day challenge HDFC Bank's leadership position seemed far-fetched. Today, it's a realistic possibility. Whether ICICI Bank ultimately claims the crown or not, one thing is clear—competition in Indian banking has become more dynamic than it has been in years. And that can only be good news for customers, employees, and the broader financial system. Disclosure: We have relied on data from throughout this article. Only in cases where the data was not available have we used an alternative but widely used and accepted source of information. The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only. The writer holds assets discussed in this article. Please do your own research before investing. About the author Sonia Boolchandani is a seasoned financial content writer with over four years of experience in delivering clear, engaging, and insightful content on various financial topics. She has contributed her expertise to prominent firms, including 5Paisa, Vested Finance, and Finology, where she has crafted content that simplifies complex financial concepts for diverse audiences. Sonia's background enables her to navigate a wide array of subjects, from stock market insights to investment strategies, making her a trusted source for financial knowledge. Her work is driven by a passion for helping readers understand and make informed decisions in the financial world, bridging the gap between industry intricacies and reader-friendly explanations.
