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| Will prefer acquiring a domestic bank over global: ICICI |
| Press Trust of India / New Delhi Aug 23, 2009, 13:56 IST |
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Having missed the bus to a planned global acquisition in 2008, ICICI Bank today said it is open for a buyout in India as domestic takeover in the current environment makes better sense than an overseas buy.
"I am always open... but the question will always be in terms of what is available and at what value, and then you weigh the option," ICICI Bank CEO and Managing Director Chanda Kochhar said on acquisition prospects this year and the elusive search for a property last year.
Asserting that the bank was the best capitalised entity in the world with over 17 per cent capital adequacy ratio, she said, "So, clearly, what I would say, we are definitely growing in India, when one talks of aggression. Again, in a way to put that in context, we are definitely a growth organisation and the growth DNA continues."
Prodded further on the bank's readiness for acquisition at the right value proposition, she clarified, "But that doesn't mean that anything is on the cards. If you write it that way, investors will think I am acquiring something. I am always open."
She answered in the affirmative to a question if acquisition within India made more sense than one overseas.
Kochhar said that the bank had constituted a "strategic committee" in March 2008 for exploring an acquisition. "When the committee was formed, what we were planning frankly at that time (was) on the international side."
Asked if the bank was still open to acquiring global property, Kochhar said, "(We are) clearly not looking for any international acquisition because in the current scenario the risk on the international portfolio are still unknown.
"As of now we are neither growing out presence in the international market from where we are because we are already present in 18 countries. We have substantial number of branches so we don't see requirement to grow in overseas markets," she said.
The strategy committee formed for acquisitions last year was later disbanded, as the planned purchase did not happen.
Moreover, Kochhar said, "Our focus is to grow as the Indian corporate grows here, and even international focus was always to grow with international requirements of the Indian corporate."
Now the issue, she said, "Is whether you grow organically or inorganically. Well, we have capacity to set up 580 branches in one year. So, obviously one then weighs what is the cost of acquiring a bank of similar size or is it more economical to do it internally."
In the past, ICICI Bank acquired two domestic banks Sangli Bank and Bank of Madura to increase its presence in the country.
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