ICICI Bank wants Sebi to probe share price crash

ICICI Bank has approached the Securities & Exchange Board of India to check if there was a concerted attempt to hammer its share price. A bank executive said that the country’s second largest bank approached the market regulator during the last fortnight after rumours started surfacing about the bank’s overseas exposure and a run on its deposits. “We wrote to Sebi the first time the rumours surfaced,” a bank spokesperson said.

In the last two weeks, such rumours prompted some depositors to withdraw money — first in Tamil Nadu and again on Tuesday in Hyderabad and certain others parts of the country. While terming the rumours as baseless and malicious, Managing Director & CEO KV Kamath on Tuesday issued a statement saying the bank is well capitalised and financially sound “It has a networth of over Rs 47,000 crore and a capital adequacy ratio of 13.4 per cent on June 30, 2008, as against the regulatory requirement of 9 per cent.This reflects the healthy capital position and comfortable level of leverage. Its banking and non-banking subsidiaries are also well-capitalised,” the private bank added.

 

ICICI Bank has consolidated total assets of over Rs 4,84,000 crore, which is diversified across a wide range of asset classes in India and overseas. The bank made a profit after tax of Rs 4,158 crore in FY2008 and Rs 728 crore in the first quarter of this year.

The bank said the performance numbers are due to the strong core performance of the bank, which more than offset the impact of adverse debt and equity market conditions in India and globally since the second half of FY2008.

“The absorption of the impact of current market conditions on investment portfolio valuation will not pose any challenge to ICICI Bank’s capital position,” ICICI Bank added.

Sources said that the bank approached the regulators yesterday itself and based on its discussions with the finance ministry, it issued a statement stating that 98 per cent of its UK arm’s non-India investment book is rated investment grade and above.

The rescue mission helped ICICI Bank’s stocks to recoup yesterday’s heavy losses and close up 8.42 per cent at Rs 534.85 on the Bombay Stock Exchange on Tuesday.