ICICI Bank taps bilateral deals for overseas funds

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ICICI Bank is expanding its fund-raising options for overseas operations by inking bilateral deals with banks in West Asia and East Asia.

About 40 per cent of the bank’s overseas fund requirement will now be sourced through bilateral deals, a departure from the earlier practice that had made the bank dependant on bond issuances to meet fund requirement for overseas operations.

The country’s biggest private lender has also cumulatively repatriated Rs 1,000 crore from its overseas subsidiaries.

A senior ICICI Bank official told Financial Chronicle, “We are doing bilateral deals with banks from West Asia and also East Asia to make funding resources cost-effective. For optimum utilisation of funds, we are repatriating excess capital from the overseas branches.”

The bank has three overseas subsidiaries — the UK subsidiary with a total asset base of $4.4 billion, the Canadian subsidiary with an asset base of Canadian $5.4 billion and the Eurasian subsidiary with an asset base of $144 million. As much as 67 per cent of the UK subsidiary’s assets are in loans and advances.

It has branches in US, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre apart from representative offices in the UAE, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.

The UK subsidiary has established branches in Belgium and Germany. Net advances of the bank’s overseas branches rose by 10.3 per cent year-on-year in dollar terms during the December quarter, mainly due to $1 billion lending made against foreign currency non-resident (FCNR) deposits.

In rupee terms, the overseas branches’ net advances increased 23.9 per cent on year due to the exchange rate movement. On a sequential basis, the growth was 9.7 per cent in dollar terms and 8.3 per cent in rupee terms.

At the end of the third quarter, the bank’s total loan book stood at Rs 3,32,600 crore, out of which 27.5 per cent was from overseas branches, 36.7 per cent from retail business, 31.5 per cent from big domestic companies and about 4.3 per cent from the SME segment.

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