In order to assess the credit-worthiness of farmers amid the coronavirus-induced economic uncertainty,
ICICI Bank Limited ( IBN Quick Quote IBN - Free Report) is using satellite data. The move is expected to help in reducing travel costs as well as time for both the lender and farmers. The use of such technology to assess agricultural loans is a first for the banking industry in India. Typically, in order to forecast farmers’ revenues to make loans to them, Indian banks have been deploying officials who travel hundreds of miles to assess irrigation systems, crop quality and land location. This process takes a lot of time. In fact, given the current global scenario, technological advancement is the most effective method that any bank could use. When banks use satellite images, it provides them a quick and technically sound analysis of the land, crop and irrigation patterns from remote locations. Also, the use of such technology gives farmers the advantage of reliable data being provided to the bank without any hassle of travel expenditure. Notably, ICICI Bank is using almost 40 different set of readily available satellite images from Indian Space Research Organisation (“ISRO”), and National Aeronautics and Space Administration (“NASA”). It is partnering with agri-fintech companies that specialize in harnessing space technology and weather information for commercial usage. Over the past two years, the bank has been piloting the project in select few villages but is now extending the same to 500 villages in Maharashtra, Madhya Pradesh and Gujarat. The bank’s executive director, Anup Bagchi, said, “We will cover 25,000 villages over the next one month and scale it to 63,000 villages over the next two month.” Our Take
ICICI Bank’s profitability is expected to continue to improve in the near term, supported by increased dependence on domestic loans as well as growth in demand for retail loans. Also, the company’s digitization efforts are likely to support fee income growth, going forward. However, owing to the bank’s technology investments, expenses are expected to remain elevated, thus, hurting the bottom line to some extent.
Shares of ICICI Bank have gained 25.5% over the past three months compared with the industry’s growth of 5.3%. Currently, the company carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the finance space are mentioned below. ETRADE Financial Corporation witnessed an upward earnings estimate revision of 13% for the current year over the past 60 days. Its share price has increased 12.1% over the past three months. It currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for TD Ameritrade Holding Corporation’s current fiscal-year earnings has been revised 21.7% upward over the past 60 days. Its share price has decreased marginally over the past three months. The company currently sports a Zacks Rank #1 (Strong Buy). Interactive Brokers ( IBKR Quick Quote IBKR - Free Report) witnessed an upward earnings estimate revision of 26.9% for the current year over the past 60 days. Its share price has increased 19.1% over the past three months. It currently sports a Zacks Rank #1. You can see . the complete list of today’s Zacks #1 Rank stocks here Zacks’ Single Best Pick to Double
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