ICICI Bank cuts its equity in UK, Canada arms

Equity investment in these arms falls to 7% of its net worth from 11% in four years

ICICI Bank, the country’s largest private sector lender, has trimmed its equity investment in its United Kingdom and Canada arms to seven per cent of its net worth, from 11 per cent in the last four years. The lender has been repatriating money from its overseas banking subsidiaries to optimise the capital invested in these businesses.

“Over the last four years, given the local business environment and regulatory development and our strategy of optimising the capital in the overseas banking subsidiaries, our total equity investment in ICICI Bank UK and ICICI Bank Canada has been reduced from about 11 per cent of its net worth at March 31, 2010, to about seven per cent at the end of March 31, 2014,” N S Kannan, executive director of ICICI Bank, told analysts following the lender’s fourth quarter earnings announcement.

Account for NRIs
ICICI Bank, the largest private sector lender in the country, on Tuesday introduced two new savings account products  for its non-resident customers.

"We serve 1.5 million NRIs across more than 150 countries and process over five million NRI transactions annually. This experience has given us insights into the lifestyle and aspirations of NRIs and our products are designed to meet their needs," Rajiv Sabharwal, executive director at ICICI Bank, said in a statement.

ICICI Bank UK had paid dividend worth $25 million during the year. It had repatriated $100 million of capital in 2012-13.

The capital adequacy ratio of both subsidiaries continued to remain healthy. While the capital adequacy of the Canadian arm was at 29.7 per cent, for ICICI Bank UK it was at 21.8 per cent at the end of March, 2014.

Kannan said the subsidiaries will continue to focus on offering short-term loans, working capital lines, trade and transaction banking products. They will target multi-national corporations, select local market corporates, subsidiaries and joint ventures of Indian companies, and will also participate in syndication transactions.

ICICI Bank Canada will aim to grow its securitised mortgages portfolio, the executive addded. “We expect the approach to lending in ICICI Bank UK and ICICI Bank Canada will also yield synergies for the local Indian banking requirements,” Kannan said.

The bank's subsidiary in UK closed last financial year with total assets of $4.47 billion. Loans and advances were at $2.77 billion. ICICI Bank UK earned a profit after tax of $25.2 million in 2013-14 compared to $14.4 million in the previous year.

ICICI Bank Canada's total assets were at Canadian Dollar 5.45 billion at the end of March, 2014. Loans and advances were at Canadian Dollar 4.78 billion. The subsidiary reported a profit after tax of Canadian Dollar 48.3 million in 2013-14 compared to Canadian Dollar 43.6 million a year earlier.

ICICI Bank also has another overseas banking subsidiary – ICICI Bank Eurasia – in Russia. The private lender has presence in US, Singapore, Bahrain, Hong Kong, Sri Lanka, Dubai and Qatar through branches. It also has representative offices in the United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.