July 05, 2013 / 14:15 IST
Saikat Das
moneycontrol.com
After a hiatus of three years in the aftermath of global financial crisis, India's largest private sector lender
ICICI Bank has stepped up plans to expand its presence in three new geographies including Australia, Mauritius and South Africa (SA). It is likely to apply for branch licences in all these regions.
However, it is yet to prepare the final blueprint for these overseas expansion plans, said sources familiar with the developments told
moneycontrol.com.
"The bank finds it the time right to resume its overseas expansion after a gap of around 2.5-3 years," said an official on conditions of anonymity.
Also read: RBI issues draft guidelines to hike provns on unhedged cos"Domestic credit is not picking up as expected. In those countries, there is potential and the lender can tap opportunities. The bank apparently looks to open branches. However, the subsidiary route remains a viable option at a later stage. While in SA they have a rep office, Australia and Mauritius ventures are fresh inroads," the person said.
As on March 31, 2013; the bank's total loan book stood at 2.90 lakh crore wherein the share of offshore loans was at around 25.3 percent or Rs 74,000 crore. In 2011-12, overseas loans contributed to the tune of 27.4 percent out of total loans at Rs 2.54 lakh crore. The share was at 24.4 percent of around Rs 2.08 lakh crore loan book. In 2009-10, overseas loans formed 25 percent of Rs 1.81 lakh crore or Rs 45,250 crore.
Must read: Mkt stability, growth pick-up key to INR-$ rate: StanChartAfter India, South Africa has a significant large Indian population. Moreover, the African continent offers huge opportunity for developments. Many Indian companies are currently seen setting up bases there. Similarly, Indian diaspora is increasing in Australia and Mauritius as well.
"ICICI Bank's international strategy is focused on India-linked opportunities, including India's global trade and investment links and banking services for the non-resident Indian community. In line with this strategy, ICICI Bank is looking at establishing a presence in select new markets (Australia and Mauritius) and upgrading its existing representative office presence to a branch structure in select markets (China and South Africa)," ICICI Bank spokesperson said in an email response confirming the development.
It is also learnt that the bank's managing director Chanda Kochchar also mentioned about such expansion in the annual general meeting held recently.
In May this year, ICICI Bank repatriated 75 million Canadian dollar capital from its wholly owned subsidiary in Canada. Repatriation of capital ends up generating funds for domestic operations. The Canadaian subsidiary had a high capital adequacy ratio (CAR) of 33.20 percent as on March 31, 2013. Back home, the bank standalone CAR was at 18.74 percent during the same time.
According to the market buzz, the bank may repatriate more capital from overseas operations like in Canada or UK, wherein business is not growing due to global economic weakness. The same fund may be used to create subsidiaries in other locations like Africa or Australia.
Meanwhile, the bank scorched speculations saying that it will not float separate subsidiaries. Hence, there will be no new investment in share capital of an overseas subsidiary.
"So far as our existing Canadian subsidiary is concerned, we will continue to look at optimising the capital level in the subsidiary over the medium term," the bank said hinting at further repatriation.
Since last one year, ICICI Bank shares increased nearly 21 percent as against 11.50 percent rise in the Bank Nifty – the broader index for banking stocks.
saikat.das@network18online.com 
