ICICI Bank to sell its Russia subsidiary IBEL

Purchase price to be determined on deal completion date based on financial statements of IBEL at that date

ICICI Bank, India’s largest private-sector lender, plans to sell its Russian subsidiary ICICI Bank Eurasia Limited Liability Company (IBEL) to Sovcombank, a mid-sized Russian bank.

“The sale is subject to execution of definitive agreements and regulatory approvals. The purchase price will be determined on the transaction completion date based on the financial statements of IBEL at that date. The transaction is expected to conclude by the end of the financial year,” ICICI Bank said in a notification to the exchanges.

At the end of the September quarter, IBEL had total assets of 4.5 billion roubles and a paid-up equity capital of 1.6 billion roubles.

IBEL’s profit after tax in the six months ended September 30, was 28 million roubles. The Russian subsidiary accounted for less than 0.1 per cent of ICICI Bank’s consolidated total assets at the end of September 30, 2014 and consolidated profit after tax for the six-month period ending September 2014.

As of March 2014, 48.8 percent of IBEL’s book was loans to companies and banks whereas retail loans constituted 24.9 per cent. The lender’s capital adequacy ratio at the end of March was 42.9 per cent. At that time, ICICI Bank had an investment of Rs 300 crore in IBEL.

ICICI Bank had acquired Investitsionno-Kreditny Bank, for an undisclosed amount in 2005. With this deal, the lender acquired assets worth $4.4 million.

Over the past few years, ICICI Bank has been cutting its stake in its overseas subsidiaries. It has trimmed its equity investment in its UK and Canada arms to seven per cent of its net worth, from 11 per cent in the past four years, the management said in a conference call with analysts after the fourth-quarter results last year.

The lender has been repatriating money from its overseas banking subsidiaries to optimise the capital invested in these businesses.