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“We will continue to focus on rationalising the capital invested in the overseas banking subsidiaries...We are focused on improving the RoEs in both the UK and Canadian subsidiaries. Dialogues for rationalising the capital level continue with the regulators in both these geographies,” a senior ICICI Bank executive told analysts after the bank had announced its earnings for the quarter ended June.
The lender aims to record double-digit RoEs in both the subsidiaries through a three-year period. The improvement in RoEs would result from capital repatriation, as well as business growth in the two countries. While ICICI Bank Canada had repatriated Canadian dollar 75 million of equity capital to its parent in the quarter ended June, the UK subsidiary had repatriated $100 million.
The bank didn’t specify the timeframe for the next round of capital repatriation. “It is very difficult to predict a timeframe in this regard, as it will be based on regulatory approvals,” the official said. ICICI Bank had decided to repatriate capital from its subsidiaries in Canada and UK following a slowdown in business growth in those geographies. At the end of March 2013, ICICI Bank UK’s total assets stood at $3.59 billion, compared with $4.08 billion a year earlier. ICICI Bank Canada’s total assets increased to Canadian dollar 5.37 billion at the end 2012-13 from Canadian dollar 5.25 billion a year earlier.
The private lender has said despite capital repatriation, the capital adequacy ratios of its Canada and UK subsidiaries were healthy. At the end of the quarter ended June, ICICI Bank UK’s capital adequacy ratio was 26.6 per cent, while the capital adequacy ratio for ICICI Bank Canada was 31 per cent. ICICI Bank has another foreign subsidiary — ICICI Bank Eurasia— in Russia. The bank also has branches in the US, Singapore, Bahrain, Hong Kong, Sri Lanka, Dubai International Finance Centre and Qatar Financial Centre.
It has representative offices in the United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.
