ICICI Bank, the largest private sector lender in the country, on Monday said it has received capital repatriation from its subsidiaries in Canada and United Kingdom (UK) during this month.
“The bank has in March, 2015 received further equity capital repatriation of Canadian dollar 80 million from ICICI Bank Canada and US $ 75 million from ICICI Bank UK,” the private lender said in a statement.
The move is aimed to optimise capital for the ICICI Group and 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,” the bank said.
This is not the first time that the bank has repatriated capital from its overseas arms. In March, 2013 ICICI Bank UK had repatriated capital of US $ 100 million. The Canadian subsidiary had also repatriated capital (Canadian dollar 75 million) in May, 2013.
In February, 2015 Business Standard had reported that the bank had initiated the process of repatriating capital from ICICI Bank Canada for the second time and was also planning to optimise the capital invested in its UK arm.
ICICI Bank Canada and ICICI Bank UK had capital adequacy ratios of 33.2 per cent and 21.8 per cent, respectively, at the end of December, 2014. Post the latest round of capital repatriation, the share capital of ICICI Bank Canada is at Canadian dollar 777 million, while that of ICICI Bank UK is US $ 420 million.
The bank’s subsidiaries in UK and Canada has now shifted their focus on short-term loans, working capital lines, trade and transaction banking products to multinational corporations, select local market corporates, subsidiaries and joint ventures of Indian companies. The subsidiaries also plan to participate in syndication transactions.
ICICI Bank has already announced its decision to sell its shareholding in ICICI Bank Eurasia (the bank’s overseas subsidiary in Russia) to Sovcombank, subject to execution of definitive agreements and regulatory approvals. The transaction is expected to conclude by the end of this month.