June 25 (Bloomberg) -- ICICI Bank Ltd., India's largest by market value, said it will be able to increase its assets by as much as 30 percent this year as economic growth spurs demand for loans in the fastest-growing major economy after China.

ICICI last week sold $5 billion of shares to raise funds to increase loans and investment, half the amount banks in India plan to sell this year to fund demand for loans needed to build roads, ports and other infrastructure.

``India's GDP is growing at about 10 percent and overall, the financial services business should grow at 25 percent to 30 percent,'' Chief Executive Officer K.V. Kamath said in an interview in Singapore. ``We should be in the ballpark range of that growth, given the conditions of growth in the economy.''

ICICI grew its balance sheet almost three-fold to $62 billion in the five years to March 31, according to data compiled by Bloomberg. That compares with the 70 percent gain in the balance sheet of State Bank of India, the nation's biggest financial services company, which has $156 billion in assets.

ICICI, based in Mumbai, in April said net income for the year ended March 31 rose 14 percent from a year earlier, boosted by demand for loans from individuals and companies. That's its eighth straight annual profit growth.

India's economy expanded 9.4 percent in the year ended March 31, the most since 1989. The Reserve Bank of India has raised rates nine times since October 2004, helping slow inflation in the second week of June to the lowest in 13 months. The central bank is scheduled to announce its next monetary policy on July 31.

`Key Driver'

``Credit has been one of the key drivers of growth in India, partly with the expansion of infrastructure investment,'' said Jay Moghe, who oversees $150 million at Opes Prime Asset Management Pte in Singapore. ``I don't expect that to slow in the next six to nine months even if rates do edge up.''

Shares of ICICI have gained 5.9 percent so far this year, adding a rally that's helped the stock surge by more than 10- fold in the last five years. The benchmark Sensitive Index has gained 4.9 percent so far this year. They traded 10.05 rupees, or 1.1 percent, down at 943.7 rupees at 10:31 a.m. today on the Bombay Stock Exchange.

ICICI sold its Indian shares at 940 rupees each, raising 87.5 billion rupees ($2.15 billion), according to an e-mailed statement from the bank on June 23. Demand was 11.5 times greater than what was sold. The lender sold American depositary receipts at $49.25 each, raising $2.14 billion.

It will sell a further $644 million in stock through a so- called greenshoe option, Kamath said yesterday.

``Capital increases are building the foundations for our business,'' he said today. ``You look at this business area as an extension of the India growth story.''

To contact the reporter on this story: Chen Shiyin in Singapore at schen37@bloomberg.net; Stephen Engle in Hong Kong at sengle1@bloomberg.net.

Last Updated: June 25, 2007 01:05 EDT