Indian Banks

ICICI Venture is likely to invest Rs 120 crore in Star Health and Allied Insurance Company Limited — the single largest private health insurer in the country — for a 15- 20 per cent stake.

This would value the insurance company at Rs 600-800 crore.

Star Health was seeking capital to meet its solvency margin requirements. At the end of March 2009, solvency margin of the insurer stood at 1.38 per cent against a prescribed limit of 1.50 per cent.

The Chennai-headquartered Star Health is a joint venture between Oman Insurance Company, ETA Ascon group (a business conglomerate in West Asia) and insurance professionals in India.

This would be the maiden investment for ICICI Venture from its new India Advantage Fund 3, which recently mopped up $500 million. South India- based boutique investment banking firm Mape Group is the banker to the transaction.

When contacted, spokespersons for ICICI Venture and Star Health declined to comment on the issue.

Star Health was the first standalone health insurance company in the country. During the last financial year, Star Health reported a net profit of Rs 7 crore on a premium income of Rs 512 crore.

The insurer saw over two- fold increase in the premium income during 2008-09 from Rs 168 crore in 2007-08.

The Indian health insurance industry has grown at an annual rate of over 35 per cent since the opening of the sector in the year 2000. But the market continues to be significantly under-penetrated in comparison with other countries. Per capita private health insurance in India is estimated at $1.1 in comparison with $2,300 in the US or $63 in Brazil.

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The country’s largest private sector lender, ICICI Bank, has received qualified full banking (QFB) privileges from the Monetary Authority of Singapore (MAS) for its branch operations in the city-state, the Indian lender announced today.

The licence permits ICICI Bank to conduct business from 25 locations in Singapore. “However, in the near term, the bank will focus on increasing its presence in corporate, commercial, wealth management and direct banking businesses, both in Singapore and in the Association of Southeast Asian Nations region, by capitalising on strong trade and investment flows with India,” said an ICICI Bank spokesperson.

The country’s largest lender, State Bank of India (SBI), is the only other Indian bank to enjoy QFB privileges in Singapore.

Under the Comprehensive Economic Cooperation Agreement between India and Singapore, implemented in August 2005, both are to provide QFB status to three banks from each other.

India has given QFB privileges to Development Bank of Singapore and United Overseas Bank.

As of December 31, 2009, the government of Singapore holds a 1.53 per cent stake in ICICI Bank.

Currently, the Singapore branch offers international loan syndication services, trade finance, comprehensive deposit and wealth management products and treasury operations to support the bank’s international operations.

Incidentally, the Singapore branch was the first overseas branch of ICICI Bank. MAS had granted ICICI Bank a licence to transact banking business in Singapore from August 1, 2003.

A little more than a quarter of the ICICI Bank’s asset book consists of international assets. As of December 31, 2009, the bank had international assets worth Rs 46,600 crore on its books.

The lender has presence in 18 countries apart from India and currently enjoys a full-bank status in Canada, the UK, Bahrain, Russia and Sri Lanka

ICICI Bank said it had no plans of setting up a subsidiary in Singapore as of now.

Chanda Kochhar, managing director and chief executive officer, ICICI Bank, said, “We are delighted to receive this approval since it will further strengthen our footprints in corporate, commercial, wealth management and direct banking services in Singapore. We expect to see significant increase in our client base in the region having strong India connections.”

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ICICI Bank was the largest recruiter at the Indian Institute of Management, Ahmedabad (IIM-A) final placements’ third cluster today, with the number of its offers in double-digits.

The third cluster of the final recruitment process began last evening with group discussions and the interviews continued through the day on Sunday, a release from the institute stated. The cluster had companies in several cohorts such as Indian banking services, financial advisory services and credit rating agencies. Regular recruiters such as Icra, KPMG, Essar Group and Philips offered roles in finance, consulting, sales and marketing.

“The new process once again ensured smooth experience for both students and recruiters. Seamlessness prevailed despite a large number of recruiters visiting the campus this weekend. Recruiters are highly upbeat about their decision to hire at IIM-A. We hope the positive spell continues in subsequent clusters,” said Mansi Chitalia, media co-ordinator of the placement committee.

Cluster Two of final placements at IIM-A saw Indian investment banks, corporate leadership programmes and global FMCG (fast moving consumer goods) companies as prominent cohorts.

Deloitte made 10 offers (including lateral offers) for consulting roles. Tata Administrative Services and Feedback Ventures offered general management and consulting roles and hired six students each.

While other recruiters on campus during the second cluster were HUL, P&G, American Express, Standard Chartered and Nestle, Cluster One saw international investment banks and consulting agencies such as Boston Consulting Group and McKinsey & Co offer roles to students.

The new cohort-based placement process for the second year post-graduate programme (PGP) students, which began on February 13, will comprise companies that offer similar roles, profiles, salaries, locations, etc. The new process allowed recruiters to interact with students for a longer duration.

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The country’s largest private sector lender, ICICI Bank, today raised deposit rates by 25-50 basis points (bps), a week after HDFC Bank raised rates for long-term maturities by 25-150 bps. The rate for the 390-day bracket went up from 6.5 to 6.75 per cent, and from 6.25 to 6.75 per cent for 590 days.

The revised rates are effective from today. The banks to have increased interest rates so far are J&K Bank and IDBI Bank apart from HDFC Bank. ICICI Bank and Union Bank had increased rates for one maturity each at the beginning of 2010.

A spokesperson of ICICI Bank said, “ICICI Bank monitors rates on a continuous basis and this revision for a few select fixed-deposit bracket is based on current market conditions.”

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India’s largest private sector lender ICICI Bank on Sunday ruled out overseas acquisitions, but said it is open to buying local banks to increase presence and business within the country. “We are not looking at global mergers or takeover or anything.

In a way we are well established in 18 countries and we have a very large network in the 18 countries,” ICICI Bank MD and CEO Chanda Kochhar said.

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ICICI Bank, the country’s largest private sector lender, on Thursday said its consolidated net profit fell 26.36 per cent to Rs 1,148.66 crore during the quarter ended December 2009, largely due to a loss on the treasury portfolio.

The bank’s consolidated total income declined by 16.23 crore to Rs 14,176.84 crore.

On a standalone basis, ICICI Bank’s net profit fell 13.45 per cent to Rs 1,101 crore during the quarter as other income fell.

While the bank’s net interest income rose 3.42 per cent to Rs 2,058 crore, other income fell over 33 per cent to Rs 1,673 crore. And, if the Rs 203 crore generated from sale of its stake in the point-of-sale terminal business is taken away, the decline in other income comes to 41.53 per cent.

The decline in other income was mainly the result of a Rs 26-crore hit on its treasury portfolio as against a Rs 976-crore gain in the corresponding period last year. Fee income rose 5.57 per cent to Rs 1,422 crore during the quarter ended December 2009.

Compared to the other banks, including those in the private sector, net interest income (NII) growth was muted as the bank continued to shrink its loan book. Outstanding advances fell 15.65 per cent to Rs 1,79,269 crore as the private sector lender continued to stay away from a large number of retail segments, which were the mainstay of its earlier growth strategy. ICICI Bank also reduced deposit base by 5.5 per cent to Rs 1,97,653 crore as part of its strategy to retire high-cost funds.

Due to falling cost of funds and an increase in low-cost deposits, net interest margin improved to 2.6 per cent at the end of the December from 2.4 per cent in end-September. The bank’s management said NIM from domestic operations was around 3 per cent.

On the liabilities side, current and savings account (Casa) deposits, the main source of low-cost funds, registered an increase of Rs 5,550 crore during October-December, representing 36 per cent growth over the comparable period in 2008. At the end of December 2009, Casa accounted for 39.6 per cent of the bank’s total deposits.

Apart from Casa, the other good news was decline in the stock of gross non-performing assets, which fell 0.7 per cent to Rs 8,926 crore. As a result, non-tax provisions fell 0.55 per cent to Rs 1,002 crore.

However, with total stock of advances declining, the proportion of gross bad debt increased by 70 basis points to 4.84 per cent between December 2008 and December 2009. Net NPAs were estimated to have increased to 2.43 per cent of net advances from 2.07 per cent a year ago.

ICICI Bank shares rose after the results were announced. But the closed marginally up at Rs 853.35, 2.71 per cent lower than yesterday’s closing price on the Bombay Stock Exchange.

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ICICI Bank, the country’s largest private sector lender, has raised deposit rates on select maturities. It is the second bank to do so since the start of the month.

The bank has raised the interest rate on deposits maturing in 270 days to less than one year by 25 basis points to 5.75 per cent for deposits of Rs 15 lakh to Rs 1 crore. The new rates are effective from January 8. The country’s largest lender, State Bank of India, offers 5.25 per cent on comparable deposits.

A fortnight ago, public sector Union Bank of India set the ball rolling by raising the interest rate on one-year to two-year deposits by 75 basis points.

While ICICI Bank did not give any reason for the increase, Union Bank said it took the step to avoid any asset-liability mismatch. Banks have started raising deposit rates after a gap of 12 months.

“This is for practical adjustment purposes. Sometimes, you need funds for a particular tenure and need to tweak rates to raise these funds. This is not a directional move and does not signal any correction or revision in rates,” said an ICICI Bank executive.

Bankers said other banks would also selectively increase deposit rates in the coming weeks. If deposit rates harden, banks may be forced to raise lending rates to kept their margins intact. Bankers have, however, said that lending rates were unlikely to rise till the end of the financial year, as credit demand was low and there was abundant liquidity.

With deposit rates offered by banks dropping to 6 per cent and less, deposit mobilisation is mainly taking place in the one-year maturity basket. As a result, fresh deposit mobilisation by banks has slowed. Deposit growth, estimated at 22.10 per cent for the one-year period ended April 10, 2009, dropped to 17.58 per cent for the year to January 1, 2010.

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ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial institution, in 1994. Four years later, when the company offered ICICI Bank’s shares to the public, ICICI’s shareholding was reduced to 46%. In the year 2000, ICICI Bank offered made an equity offering in the form of ADRs on the New York Stock Exchange (NYSE), thereby becoming the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. In the next year, it acquired the Bank of Madura Limited in an all-stock amalgamation. Later in the year and the next fiscal year, the bank made secondary market sales to institutional investors.

With a change in the corporate structure and the budding competition in the Indian Banking industry, the management of both ICICI and ICICI Bank were of the opinion that a merger between the two entities would prove to be an essential step. It was in 2001 that the Boards of Directors of ICICI and ICICI Bank sanctioned the amalgamation of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. In the following year, the merger was approved by its shareholders, the High Court of Gujarat at Ahmedabad as well as the High Court of Judicature at Mumbai and the Reserve Bank of India.
ICICI Bank (formerly Industrial Credit and Investment Corporation of India) is India’s largest private sector bank by market capitalisation and second largest overall in terms of assets. Bank has total assets of Rs. 3,793.01 billion (US$ 75 billion) at March 31, 2009 and profit after tax Rs. 37.58 billion for the year ended March 31, 2009. The Bank also has a network of 1,520 branches and about 4,721 ATMs in India and presence in 18 countries, as well as some 24 million customers (at the end of July 2007). ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. (These data are dynamic.) ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank has got its equity shares listed on the stock exchanges at kolkata and vadodara mumbai and the National Stock Exchange of India Limited, and its ADRs on the New York Stock Exchange (NYSE). The Bank is expanding in overseas markets and has the largest international balance sheet among Indian banks. ICICI Bank now has wholly-owned subsidiaries, branches and representatives offices in 18 countries, including an offshore unit in Mumbai. This includes wholly owned subsidiaries in Canada, Russia and the UK (the subsidiary through which the HiSAVE savings brand is operated), offshore banking units in Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates and USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular.

ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29% increase in total income to Rs. 9,712.31 crore in Q2 September 2008 over Q2 September 2007. The bank’s current and savings account (CASA) ratio increased to 30% in 2008 from 25% in 2007.

ICICI Bank is one of the Big Four Banks of India with State Bank of India, Axis Bank and HDFC

ICICI Bank was promoted by ICICI (Industrial Credit and Investment Corporation of India) Limited in 1994 as its wholly owned subsidiary. ICICI’s share holding reduced to 46% after a public issue in 1998 and a subsequent equity offering of American depository receipts (ADR) listed in New York stock exchange in 2000.

Incidentally ICICI was established on World Bank’s initiative by Government of India and Indian industry representatives in 1955. It was created with aim of providing long and medium term financial assistance to Indian industries and businesses. In 1990s, ICICI transformed itself from a developmental finance institute to an organization offering diversified financial services to individuals and corporations. ICICI holds distinction of being first Indian company and first financial institution from Asia, apart from Japan, to be listed on New York Stock Exchange.

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