ICICI Bank To Mop Up Over $6Bn

Mumbai: ICICI Bank needs to mop up over $6 billion (Rs 244 billion) abroad in the current financial year to fund its international business. The need for resources is pretty large. Last year (2006-07), the bank mopped up $6 billion, but this year it''s going to be more than that because its growth itself is more. Recently, the bank mopped up $1.5 billion (Rs 61 billion) through syndicated loan overseas. Even domestically, need for deposits continue to be strong to meet the large asset base of the bank. ICICI Bank now hopes its credit growth to be around 20 per cent in the current financial year compared with 34 per cent last year. Global operation is largely fee-income driven than interest income. Apart from M&As, loan syndication, there are other kinds of fee income as well, like swap derivatives.

Most of ICICI''s global fee income comes from managing merger and acquisition deals of companies, loan syndication, and remittance income from retail investors. It also hopes global business to continue contributing around 20 per cent to the bank''s income and net profit in the current financial year. On lending side, the demand continues to remain strong, so while liquidity is there, there is also demand. It''s just that, growth scenario has changed. The bank''s loan book internationally is growing at over 50 per cent from a year ago. The bank''s total corporate loan growth rate is hoped to be 25 per cent in 2007-08, almost flat from the first quarter of 2007-08. The domestic loans growth is likely to be around 15-20 per cent.

There continues to be strong investment interest by foreign institutions, indicated by the huge response to the bank''s follow-on issue in June. The other indication is from the lending side as was noted in the $1.5 billion loan syndication that was done by 23 banks. Even now, foreign investors are evincing interest to pick up stake in ICICI Bank in the secondary market. Foreign institutional investors own 72.5 per cent in the bank, almost near the maximum limit of 74%.