ICICI Bank's global operations break even

ICICI Bank's global banking division has managed to break even in the first full year of operations.

Bhargav Dasgupta, senior general manager and head of international banking group, said, "Usually it takes three years to break even, but as a result of our focus on fee-based business and controlling costs by adopting the BPO story in reverse, we have been able to achieve this is in a year."

With corporates setting up shop overseas, it has become imperative for Indian banks to adopt a follow-the-customer strategy.

The second largest domestic bank is confident that with India Inc expanding overseas, 25 per cent of its profits will come from international operations in five years.

"For us to compete in the domestic market, we need to go global if we are to service our corporate clients and meet their cross-border needs," said Dasgupta. Indian banks feel that they understand the needs of domestic corporates better than their global peers.

According to Joydeep Sengupta, principal at McKinsey & Company, Indian banks can succeed globally provided they control operational costs using India as the backoffice and global branches as the front-desk.

In addition to catering to Indian companies, ICICI Bank is building up volumes through alliance partners across the globe.

"Our alliance partners have helped us in ramping up remittance volumes, thus adding to the fee-based income," Dasgupta said.

ICICI Bank has linked accounts with Emirates Bank and Commercial Bank of Qatar in the Middle East. It has an alliance with Bank of Montreal in Canada, Wells Fargo in the US and DBS in Singapore for remittances.

It also has linked accounts with Lloyds Bank in the UK. The ICICI Bank international banking group was incorporated in July 2001 to implement a focussed international strategy.