Overseas biz loses lustre for top 3 private banks

The top three private sector lenders — ICICI Bank, HDFC Bank and Axis Bank — have reported muted growth in their international business in the current financial year so far.

ICICI Bank, the country’s largest private sector bank, said it has consciously calibrated its international business and is also bringing back capital from its overseas subsidiaries.

In the last one year, the bank brought back ₹1,000-crore capital from its UK and Canadian arms.

It plans to repatriate excess capital aggregating $250 million from these foreign arms this calendar year.

Stable growth Last month, ICICI Bank Chief Chanda Kochhar said, “It (international business) is pretty stable in terms of profitability and asset quality…. At one time, of course, it grew at 60-70 per cent but now it is more stable.

Given the economic environment, we have calibrated the international business growth.” The bank’s international business across 18 countries constitutes about 25 per cent of its total business.

Similarly, Axis Bank has also repatriated profit of around ₹150 crore from an overseas branch.

For the country’s third largest private sector lender, growth in international business remained flat in the third quarter. The total assets under overseas operations were at $7.48 billion (about ₹46,660 crore) as on December 31, 2013, contributing to about 12 per cent of its total balance sheet.“The growth in international business is slow because our focus has also turned more domestic and India-centric.

Our international business is entirely wholesale with about five branches overseas,” said Parthasarathi Mukherjee, President, Corporate Banking (international business) of Axis Bank.HDFC Bank said its international loan book grew about 5 per cent.

“It has been almost flat at around the 5 per cent leel and looks stable for now,” Paresh Sukthankar, Deputy Managing Director of HDFC Bank, had said in a post-results conference.

Its advances in overseas branches as of end-December were at 8 per cent of total advances (₹2.97-lakh crore).

Mukherjee said growth in the international business will be continue to remain slow in FY15.

Foreign presence Banks are, however, cautiously stepping up their overseas expansion. In the October-December quarter.

Axis Bank opened a branch in Shanghai, a first in China by any Indian private sector bank.

Similarly, ICICI Bank said it is increasing its presence in the Asian region. According to Kochhar, “We are converting our representative office in China into a branch. In Singapore, in the last two years, we converted a small retail branch into a qualified full branch licence. So, in that way, our scale, size and penetration are increasing.”