ICICI to use NY branch for top-end services

MUMBAI: ICICI Bank will use its recently-acquired New York branch licence to offer high-end retail banking and fund cross border M&A by India Inc. With an approval from the US Fed to open a branch in New York last week, ICICI Bank is now present in almost all the financial centres which include London, Hong Kong and Singapore.

ICICI Bank’s retail strategy for New York appears to be similar to its operations in Singapore. In Singapore, it is looking at wealth management and some retail activities for which it is to apply for regulatory approval.

According to ICICI Bank joint managing director Chanda Kochhar, the US branch will offer wholesale banking services and some NRI services. The NRI services will depend on the approvals we get. “Indian companies are acquiring companies in the US. They are also setting up units and expanding their activities in the country. We will offer them all kinds of financing like term loans, trade finance, and working capital,” she said.

ICICI Bank executive director Sonjoy Chatterjee said, “We will do high-end retail banking and tap the mass affluent segment with a $1,00,000 cut-off. We are already in the remittance space. We will also get active in the US M&A space. We have a good presence in this space in the UK and Europe.”

The bank could take a couple of years to get licence to offer a full-fledged retail activities in the US. The bank’s operations in the UK and Canada, where it is present as subsidiaries offer a whole range of retail activities in addition to wholesale banking. A US Fed statement said, “The proposed New York branch would engage in a wholesale banking business, including providing lending, trade financing, and factoring services to US-based subsidiaries of Indian companies.” According to Ms Kochhar, the US branch will have a staff of 25 people.

The bank is said to have put in its application for a US branch in 2004. The Fed has been concerned about anti-money laundering laws of Indian banks. The Fed, in its approval, said, “Based on all the facts of record, the board has determined that the bank’s home jurisdiction supervisory authority is actively working to establish arrangements for the consolidated supervision of the bank and that considerations relating to the steps taken by the bank and its home jurisdiction to combat money laundering are consistent with approval under this standard.”

ICICI Bank has wholly-owned subsidiaries, branches and representative offices in 17 countries, and an offshore banking unit in Mumbai. The international operations of the bank accounted for about 22% of its consolidated banking assets. Ms Kochhar added that the bank is not looking at expanding into too many countries.

The focus would be to broaden the current network of the bank. ICICI Bank has been aggressive in its international banking business. The advances of the bank’s international branches increased 146% to Rs 36,994 crore ($9.3 billion) as on September 30, 2007 from Rs 15,025 crore ($3.8 billion) on September 30, 2006. Advances by the bank’s international branches as a proportion of advances rose to 19.7% from 9.7% on September 30, 2006.