ICICI Bank to sell mortgage loans in Russia

India's largest private sector bank, ICICI Bank, is in talks with Moscow Bank for Reconstruction and Development, an arm of Sistema, for selling mortgage loan products in Russia.

"We have held discussions with ICICI Bank for possible cooperation in mortgage lending and trade finance. ICICI Bank may design the mortgage products and we will sell them in the Russian market through our banking network," said Sergey Ya Zaytsev, chairman of the executive board, Moscow Bank for Reconstruction and Development (MBRD).

MBRD is a medium-sized bank in Russia with 166 branches in 34 regions of the country. It has a retail loan portfolio of $800 million, as on January 1, 2008, and total assets of $3 billion.

ICICI Bank has a subsidiary in Russia, ICICI Bank Eurasia LLC, but it has a very small branch network. A tie-up with MBRD will enable ICICI Bank to penetrate many Russian regions which offer good opportunity to lenders in mortgage financing.

At present, mortgage financing is less than 3 per cent of Russia's GDP, while it is more than 100 per cent in western countries.

The tie-up with ICICI Bank will be on revenue-sharing basis. ICICI will design mortgage products, which will be sold by MBRD. The mortgage portfolio will be bought by ICICI Bank for a fee from MBRD.

MBRD also has plans to follow the footsteps of its parent Sistema and enter India through a representative office or branch office.

(The correspondent is in Russia on Sistema's invitation)