| Beeline for growth
Calcutta, May 19: ICICI Bank has acquired a bank in Russia as part of its global expansion plans.
Investitsionno-Kreditny Bank (IKB), ICICI Banks first overseas buyout, has assets worth $4.4 million. Its paid-up capital and reserves stand at $1.2 million.
IKB is a small bank, which caters to small and medium enterprises, and has deposits of nearly $2 million.
Kalpana Morparia, deputy managing director of ICICI Bank, said getting a banking licence in Russia and starting operations is a long-drawn process. It takes nearly three years to complete the entire exercise. An acquisition gives ICICI Bank the opportunity to take the plunge right away.
Even though IKB is a small bank, it has a deposit insurance cover. That should help us garner retail deposits, she added. Morparia refused to reveal the price at which the deal has been struck saying it was a small amount.
ICICI Bank feels this is the right time to enter Russia as trade with that country is increasing and its economy is growing at the rate of 6.5 per cent.
The other factor in favour of Russia is that retail finance is expanding at 30-40 per cent per annum.
Our plan is to capitalise on the banks good points and grow organically. Acquisition of IKB is a vehicle to enter the Russian market, said Morparia. IKB has a registered office in Balabanovo in the Kaluga region and a branch in Moscow.
ICICI Bank had started due diligence on the Russian bank early this year.
On whether the name of IKB will be changed to ICICI Bank, Morparia said: We would love to rechristen it. But it all depends on the regulations in Russia. If the regulations allow, we will do it immediately.
ICICI Bank has two wholly-owned subsidiaries in the UK and Canada. It has two branches in Singapore and Bahrain and representative offices in China, Dubai, the US, South Africa and Bangladesh.
The bank expects overseas operations to contribute 25 per cent to its profit in three years compared with 10 per cent at present.