ICICI Bank has commenced efforts to repatriate capital from its overseas banking subsidiaries (UK and Canada) in order to optimise capital for the ICICI Group and improve its return on equity.
The country’s largest private bank had received approvals for and repatriated $100 million of capital from its wholly owned subsidiary in the UK(ICICI Bank UK) in March 2013 and CA$75 million from its wholly owned subsidiary in Canada (ICICI Bank Canada) in May 2013.
The bank has in March 2015 received further equity capital repatriation of CA$80 million from ICICI Bank Canada and $75 million from ICICI Bank UK. ICICI Bank Canada and ICICI Bank UK had capital adequacy ratios of 33.2 per cent and 21.8 per cent respectively at December 31, 2014. Meanwhile, the bank overall has a capital adequacy ratio of 16.39 per cent as on 31 December 2014, down from 16.81 per cent a year ago.
According to Basel III norms, banks have to maintain a capital adequacy of at least 9 per cent. Capital adequacy is a measure of a bank’s financial strength and is expressed as a ratio of capital to risk-weighted assets.
Post the repatriation, the share capital of ICICI Bank Canada is CA$777 million and of ICICI Bank UK is $420 million.