 "ICICI Bank repatriates C$75 mn from subsidiary in Canada")
ICICI Bank, the country’s largest private lender, has repatriated C$75 million ($73 million) from its subsidiary in Canada, the bank said today. In May, the bank had received regulatory clearances for bringing back capital from its UK subsidiary.
The bank said its effort was aimed at optimising capital for the ICICI Group and to improve its return on equity.
“ICICI Bank already has a strong capital adequacy ratio and the above return of capital would further improve the same and enhance ICICI Bank’s ability to optimise capital deployment and return on equity,” it said.
Slowing business growth and a stringent regulatory environment had led to the decision to bring back the capital. Despite the repatriation, both the UK and Canada subsidiaries continue to have strong capital, the bank maintained.
Analysts said the lender had deployed large capital in its UK and Canadian subsidiaries some years earlier, hoping the growth rate would be high in those businesses.
However, with growth not in line with expectation, there was excess capital in the subsidiaries. In addition, the UK had put in place stringent norms for foreign entities and asked such lenders to ring-fence their retail operations.
ICICI also has a third subsidiary abroad, in Russia. In all other international markets, the bank operates through branches.
The bank said its effort was aimed at optimising capital for the ICICI Group and to improve its return on equity.
“ICICI Bank already has a strong capital adequacy ratio and the above return of capital would further improve the same and enhance ICICI Bank’s ability to optimise capital deployment and return on equity,” it said.
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ICICI Bank Canada’s capital adequacy ratio as of March 31 was 33.2 per cent. Its share capital after repatriation is C$857 million.
Slowing business growth and a stringent regulatory environment had led to the decision to bring back the capital. Despite the repatriation, both the UK and Canada subsidiaries continue to have strong capital, the bank maintained.
Analysts said the lender had deployed large capital in its UK and Canadian subsidiaries some years earlier, hoping the growth rate would be high in those businesses.
However, with growth not in line with expectation, there was excess capital in the subsidiaries. In addition, the UK had put in place stringent norms for foreign entities and asked such lenders to ring-fence their retail operations.
ICICI also has a third subsidiary abroad, in Russia. In all other international markets, the bank operates through branches.