ICICI Bank Blog

This is a Unofficial blog of ICICI Bank Ltd, I created this only for information to all it's investors about what the company is doing.Information in this blog may or may not be correct.

Saturday, October 20, 2007

ICICI Bank to set up ICICI Foundation

ICICI Bank Ltd has announce that the ICICI Group, comprising ICICI Bank (NYSE:IBN) has since its origins as a development bank sought to foster accelerated economic growth. Over the years, it has also taken up several initiatives for socio-economic development and financial inclusion, in addition to its business operations. The ICICI Group believes India is at a critical juncture in its history, where strong economic growth creates an opportunity for accelerated socio-economic development with greater inclusion of the disadvantaged in the economic mainstream, and significant reduction in poverty through sustainable initiatives. This requires not only financial capital but also technological and managerial expertise and entrepreneurial talent.

The ICICI Group has a keen interest in playing a larger role in this area.

The Board of Directors of the Bank on October 19, 2007 has approved the establishment of The ICICI Foundation for Inclusive Growth, subject to receipt of such other approvals as may be required.

The ICICI Foundation will integrate, consolidate and scale up the ICICI Group's existing initiatives in the area of philanthropy and development and expand into identified new areas, with the objective of catalyzing and accelerating social and economic inclusion by bridging economic and human development gaps.

Dr. Nachiket Mor has led the ICICI Group's social initiatives for several years. His vision and passion for achieving inclusive growth have been critical to the ICICI Group's work in this area. Given the importance of the proposed new initiative and the ICICI Group's aspiration to make a significant positive impact on the socio-economic empowerment of the disadvantaged sections of the Indian people, Dr. Mor would move from his current responsibilities on the Board of Directors of the Bank to dedicate himself to this initiative as President of The ICICI Foundation for Inclusive Growth. He would assume full-time responsibility for the ICICI Foundation's establishment and operations going forward, effective October 22, 2007.

ICICI Bank net up 33% at Rs 1,003cr

ICICI Bank, the country’s second largest bank, has reported 33 per cent increase in net profit in the quarter ended September 30, 2007, driven by growth in net interest income. The bank’s net profit, for the first time, was in four digits at Rs 1,003 crore.

Total income has risen by 41 per cent to Rs 9,588.41 crore against Rs 6,796.82 crore from a year ago. Net interest income grew by 34 per cent to Rs 1,786 crore, while non-interest income rose by 43 per cent to Rs 1,897 crore. Other income was up 31.95 per cent to Rs 2,071.94 crore.

“The bank’s profit is driven by growth in net interest income. The advances has also seen a healthy growth. The growth in retail loans are in line with that of the industry. We see a good pipeline of business in the corporate and international banking segment,” said Vishakha Mulye, ICICI Bank, group, chief financial officer.

Fee income rose by 25 per cent to Rs 1,486 crore. International banking and corporate operations contribute around 30 per cent to the fee income.

The bank’s net interest margin stood at 2.25 per cent compared with 2.13 per cent in the corresponding quarter last year.

Advances portfolio increased 33 per cent to Rs 2,07,121 crore. The advances of the bank’s international branches increased 146 per cent to Rs 36,994 crore. Retail advances has grown by 22 per cent. Incremental growth in retail advances has been about 13 per cent (Rs 9,000 crore).

“Incremental growth in the retail portfolio has been flat. It is been our constant strategy to grow the non-collateralised loan portfolio.

The share of unsecured loans to total retail advances has risen to 15 per cent from about 8 per cent. In this segment, though the rate of delinquency is high, the return is also relatively high. We continue to evaluate the business opportunities and will alter our strategy accordingly,’’ added Mulye.

The bank’s net non-performing assets to net advances has risen to 1.4 per cent from 1 per cent, while the gross NPAs rose to 2.8 per cent from 1.9 per cent. The bank’s capital adequacy ratio stood at 16.76 per cent.

Even though the bank’s current and saving account (CASA) base has grown by 38 per cent, the cost of funds is around 7.7 per cent. Of the total deposit base of about 2,28,307 crore, 26 per cent accounts for CASA, while the balance is corporate deposits.

“Compared to our peers, the share of CASA has always been low as we have a legacy,” added Mulye.

ICICI Bank to set up shop in the Big Apple

ICICI Bank has received US regulatory asset to open a brand in New York. ICICI Bank is the second largest financial lender in India, with assets totalling over $91 billion.

The approval will see the Indian ICICI Brand set up shop in the Big Apple, primarily in the wholesale banking business, including trade finance, and factoring services to US-based subsidiaries of Indian companies, according to a press release by the US Federal Reserve on its website.

According to the US Fed's release, the bank has policies and procedures complying with Indian laws and regulations and the Reserve Bank of India (RBIs) guidelines with respect to anti-money laundering efforts in the post 9-11 scenario. The Fed also says that ICICI bank has also taken additional steps on its own to combat money laundering and other illicit activities.

The Fed says ICICI bank's application met the requirements of International Banking Act and RBI also supervises it. The regulators have found the ICICI Bank's risk management standards in line with those established by the Basel Capital Accord, and its capital in excess of the minimum levels that would be required by the accord.

send this article to a friendAt present, ICICI bank has a representative office in New York, and operates non-banking activities, besides having centres in Canada, the UK, Bahrain, Russia and Sri Lanka.

Monday, October 08, 2007

ICICI receives licences for fresh branches, more off-site ATMs

The country's second largest lender, ICICI Bank, has received the Reserve Bank's approval for establishing new branches and additional off-site ATMs.

The approval is broadly in line with its application to the Reserve Bank, ICICI Bank said in a press release issued here today.

While the bank would not divulge the number of branches and ATMs for which it has received the apex bank's approval, banking industry sources said that it has received approval for around 400 branches.

This would take its branch network from the present 950 to 1,350.

Similarly, the sources said that the bank has received approval to establish 2,500 more ATMs. ICICI Bank's ATM network stands at around 3,600.

ICICI Bank to raise Rs 5 bn

ICICI Bank has introduced regular income bonds for retail investors to raise up to Rs 5 billion. This move comes after the launch of debt instruments in various overseas markets.

The bank would raise funds in the nature of Tier II capital through the issue of unsecured redeemable bonds. In case the offering is oversubscribed, it has an extendable limit for an additional Rs 5 billion. The issue opened on Sepyember 29 and will close on October 12.

This bonds issue, first in the country by the bank this year, follows a five-year USD 2 billion borrowing by the bank in various overseas markets.

In a filing to the National Stock Exchange last week, the bank said that it has so far in the current fiscal raised about 6 billion dollar through debt and about 5 billion dollar through equity.

Under the issue, the bank would offer 4 types of bonds, which will be listed on BSE and NSE.

The instruments, with a term ranging from 5 years and 3 months to 10 years, have been assigned the `highest safety` rating by credit rating agencies ICRA and CARE with regard to timely payment and interest.

JM Financial Consultants, Enam Financial Consultants, DSP Merrill Lynch and ICICI Securities are the lead managers of the issue. Almondz Global Securities, Bajaj Capital and Karvy Investor Services are the co-lead managers.

In 5 years 3 months tenure option, the annual coupon rate offered is 9.8% (9.39% for the monthly interest payment option). For the 10-year bonds, the rate is 10% (9.57% for monthly interest payment).

ICICI Bank also plans to issue commercial papers through its offshore banking unit in Mumbai, Hong Kong branch and Bahrain branch, and use the proceeds for general corporate purposes.

ICICI arm launches overseas trading service

ICICIdirect.com, the online broking arm of ICICI Securities, today launched its overseas trading service that will allow its resident Indian customers to buy and sell equities across 13 US stock exchanges, including NYSE and Nasdaq.

ICICIdirect.com has tied up with Penson Financial Services, the fourth largest clearing and broker-dealer company in the US, as its overseas trading partner. Penson Financial Services handles about 10,00,000 settlements everyday and has over $6.8 billion in assets, including customer assets.

The Indian company is looking for similar tie-ups in other parts of the world, such as Europe, to allow Indian investors to buy equities listed on London Stock Exchange, or other markets, where the regulations permit such investments.

Following the tie-up, ICICIdirect.com’s clients can invest in US stocks including ADRs, exchange traded funds, stock options and index options.

The Reserve Bank of India allows resident Indians to invest up to $2,00,000 per annum abroad, encouraging ICICIdirect.com to launch the product, its executives said.

With Indian stock prices trading at record levels, the platform offered by ICICIdirect.com allows Indian investors to diversify a part of their savings in other markets, they said.

The overseas trading service will be available to individual customers of ICICIdirect.com on a one-time nominal fee payment of Rs 999.

Clients will be charged Rs 360 ($9 or 75 bps, whichever is higher) per transaction, in addition to the remittance charges. The money will be remitted only through ICICI Bank branches authorised for this purpose.

S Mukherji, Managing Director and CEO, ICICI Securities Limited said, “We believe that Indian investors are looking at diversifying their portfolio and overseas trading service enables them to do so. The US equity markets are most liquid and deepest in the world and allow investors to spread country and sectoral risk more effectively. Customers could also invest in sectors which are under-represented in India such as biotechnology, semiconductor and internet based companies.”

Warren Bunting, vice-president, Global Penson Services of Penson Financial Services, said the tie-up with ICICIdirect.com was exclusive, and it does not have plans for similar tie-ups with other brokerages in India. Penson Financial has a presence in Hong Kong, Canada and the UK, besides the US.

Thursday, September 27, 2007

ICICI raises $2b through bond issues abroad

ICICI Bank, India’s second largest bank, is on a fund raising spree. After raising $1.5 billion a couple of months back through loan markets, it has now raised another $2 billion through a 5-year fixed rate note. This is the single-largest issuance by an Asian bank. With this, the private sector bank has raised $6 billion in this financial year against $6.5 billion in the last financial year.

The notes were sold under 144A/Reg S format. The bank was able to tap qualified US investors through this route. The money has been raised by the bank’s Bahrain branch. The notes have been priced at 237 basis points (bps) over US Libor or at Libor plus 172 bps. The six-month Libor is currently at 5.14%. From an investor breakdown perspective, 32% of the notes were sold to banks, 53% to fund managers and 15% to pension funds and retail. The issue had an order book of $6.05 billion and received interest from 250 investors. This is the first major issuance by an Asian bank, post-subprime crisis.

The offer was lead managed by Deutsche Bank, Goldman Sachs and Merrill Lynch. Incidentally, the bank had raised $1.5 billion through loan syndication programme a couple of months earlier. The issue has a one-, three-, and five-year tranche, and the five-year tranche was raised at Libor plus 65 bps. In January this year, the bank had raised $2 billion under the 144A/Reg S format. It had raised three-year, five-year and upper tier II. The bank had raised $750 million under the five year tranche for which it had paid Libor plus 75 basis points.

However, due to the subprime crisis, there has been a widening of credit spreads globally. The bank’s earlier January issuance is currently trading at Libor plus around 155 bps. ICICI Bank will use this money to fund the needs of its corporate borrowers. Indian corporates have been on a major overseas acquisition binge, and the move seems to be continuing even on the back of the subprime crisis. This is even as there has been a slowdown of credit in the local markets, though there has been some pick-up in the past couple of weeks. This would also mean that the cost of borrowing for Indian corporates would also go up dramatically.

Earlier speaking at a conference in Mumbai, ICICI Bank’s joint MD, Kalpana Morparia said, “Spreads have certainly widened due to credit issues in the US. However, the impact on papers issued by players in emerging markets has been quite moderate. Also, bond offerings by Indian entities in offshore markets have also been modest. However, given the fact that there is a huge interest differential between rupee borrowings and dollar-denominated ones, raising funds from the offshore market still is an attractive proposition. “

Speaking on the sidelines, Ms Morparia said that the bank would take a call on revising its interest rates in its board meeting in October.

Securitisation could be a route to provide a more effective funding route to banks and finance companies, given the growing need for funds in anticipation of future growth in credit.

Wednesday, September 26, 2007

ICICI launches 'Floating Rate Repayment Product'

Country's second largest bank ICICI Bank on Monday launched its 'Floating Rate Repayment Product' for loans on cars, commercial vehicles, construction equipment and professional equipment.

''This makes ICICI Bank the first among private banks and NBFCs to offer this product to retail loan customers,'' said a statement.

ICICI Bank is a leader in providing vehicle loans and it was ssential to launch a product, which is the only private bank giving customers the choice of a Floating or Fixed rates for loan products in the segment, it added.

The floating rate that the Bank is offering is linked to the Floating Reference Rate-FRR, the benchmark used by the Bank for pricing floating rate loans to its retail customers.

Currently the floating rate is available to customers at 50 bps lower than the equivalent fixed rate product.

''Customers must also keep in mind that in the auto loan market, the customer rates vary as at times there are special incentives and discounts available from the manufacturers, or dealers and finance commission,'' ICICI Bank (Head-Vehicle Loans) N R Narayanan said.

ICICI gets full commercial licence in Bahrain

India's largest private sector bank, ICICI Bank has been granted a full commercial branch (FCB) licence by the Central Bank of Bahrain (CBB), the second Indian bank after State Bank of India to offer full banking services in the kingdom.

ICICI Bank had launched its operations in Bahrain as an offshore banking unit (OBU) in October 2004.

"We are happy that we got the FCB licence within three years of our operations in Bahrain," said ICICI Bahrain country head Ajay Sharma.

Sharma said the bank, which operates from one location at the Manama Centre, would now open more branches in different areas of Bahrain.

"We shall identify locations like Gudaibiya, Sitra, and Riffa, where there is a large concentration of Indian population," he was quoted as saying in Gulf Daily News.

ICICI currently employs 85 people and the opening of more branches will create more jobs, he said, adding that the bank will recruit more Bahrainis. "They will either be trained locally or at our training centre in Khandala, near Mumbai.

We may also consider sending employees for on-the-job training at some of our top branches in India."

At present, the OBU branch offered its products to non-resident Indians (NRIs) only, including facilities for remittance, deposits, saving accounts and investment.

"They can also remit money now not only to India but to other countries as well. Under the FCB licence, we are offering the entire products to all nationalities, including Bahrainis."

Another key service of the bank for NRIs is in the area of home loans.

Monday, September 24, 2007

ICICI to expand private banking

ICICI Bank is expanding its private banking business by adding relationship managers and increasing point of presence in tier II and tier-III cities to tap the growing wealth of businessmen, especially small- and medium-sized entrepreneurs.

The wealth management business in India grew by 18.3 per cent 2006 against 7.6 per cent in China. The bank has seen about 65 per cent annual growth in the last three years, bank general manager (private banking) Anup Bagchi said.

The investible assets are growing rapidly in country in tandem with high economic growth (in excess of 9 per cent per annum for the last two years).

The bank has built a team of 450 relationship managers in the country to meet demand for wealth management services from people with investible assets of Rs 10 lakh and above, he said.

The bank did not disclose assets under management’s and number of clients handled by private banking unit.

The attrition rate in relationship managers in bank is 25 per cent, reflecting scarcity of talent. Besides traditional entities, competition in private banking comes from chartered accountants, ing this in focus, bank has tied up with 80 management schools to run courses on private banking in MBA courses to increase pool of managers

The personal wealth industry of the Asia-Pacific region is estimated to be $7.6 trillion.

Sunday, September 23, 2007

ICICI Bank to increase number of clients in Russia

ICICI Bank Eurasia is offering credit card debtors from other banks to start a new credit history in ICICI, ICICI Bank Deputy CEO Vladislav Voitsekhovich said here.

The bank will transfer the debt of the client on any credit card from another bank to its Visa Gold.

''The customer will retain the old card without the debt and moreover will obtain our card with a limit increased by a quarter,'' Voitsekhovich said.

Currently, the holders of ICICI cards are only 2000, but it will rise by four times by the end of the year, he said.

ICICI Bank Eurasia President Niranjan Limaye said, ''In India this programme allows to increase the issue of cards by one third of the amount already issued per month.'' Limaye added the Russian and the Indian markets are very alike so customers should eagerly respond to this proposal.

The debt conversion to ICICI Bank Eurasia will cost 1.3 per cent of the whole transferred sum.

During the first half of a year, the client will pay 0.99 per cent per month from the sum of the debt. If the debt is not paid off by the end of this period, the monthly payment will increase to 1.99 per cent.

Those wishing to use this service of ICICI Bank Eurasia will need to present the card of the previous bank, account statement and passport.

So far this service is available only in Moscow and its adjoining region but will expand in the future.

Voitsekhovich said ICICI bank will be more loyal to borrowers of 37 banks including Citibank, Russian Standard Bank and Alpha Bank.

Tuesday, September 18, 2007

ICICI Bank sees its core fund size touching $23 b

Indian infrastructure space will be the centre of investors’ focus over the next few years, with ICICI Bank anticipating a role in investment of $20-23 billion in this space by 2010-end.

“ICICI Bank believes that it would contribute $20-23 billion in the $500 billion capital expenditure requirement of the infrastructure sector in the next three years,” said ICICI Bank deputy managing director Chanda Kochhar.

According to the bank’s internal estimates, the sector would need about $500 billion, with infrastructure projects accounting for nearly half this amount through 2010. The country’s largest private lender had recently announced a $2-billion infrastructure fund, where it is pooling in capital from foreign investors to be invested in various infrastructure projects in India.

The bank is already believed to have received commitments for one-fourths of the fund size and is likely to contribute about 15% ($300 million) of its own funds. ICICI Bank is looking to follow this fund with a larger one worth $5 billion in 2-3 years. “The $2-billion fund is just the beginning. It is only a small part of our plans to invest in infrastructure projects,” she added.

This fund would be involved mostly in equity investment and icici Bank’s share would be about 15%,” she said. The fund, being managed by Credit Suisse, is likely to close in about three months. ICICI Bank has recently overtaken sbi, its public sector rival and the country’s biggest lender, in terms of assets in overseas business.