ICICI Bank

qamwc1

pioneer wrote: »

The Spanish don't trust the Banks either


See this http://www.costablanca-news.com/news/spain.htm

I think were going to see a number of strangely stuffed matresses and turned soil

This is something they have always done to evade paying tax.

Andrew64

It's a good job ICICI UK is fully FSCS covered, because as well as the Indian parent bank having a CDS of 900, its credit rating (Fitch) is BBB-. That's one level above junk and the same as B&B when it went under.

We must all keep a close eye on the banks we have money in so we don't get caught-out as with Icesave!

EalingSaver

Andrew64 wrote: »

It's a good job ICICI UK is fully FSCS covered, because as well as the Indian parent bank having a CDS of 900, its credit rating (Fitch) is BBB-. That's one level above junk and the same as B&B when it went under.

I'm a little shocked by the BBB- rating, given the S&P ratings quote on the Reuters article that was posted elsewhere i.e. "will dent it profits but....." i.e. stating fundamentally sound.

I started this weekend feeling positive, following a torrid few days. Now I'm feeling p*****d off again :-)

MadSage

They have had a BBB- rating for a long time, since 2007 I recall, but the change in CDS has been very sudden since people in India started panicing a couple of weeks back. That started because of rumours they were going bankrupt, and maybe it was just rumours, but...

Kaupthing kept saying they are liquid, everything is fine... then look what happened.

Looking on the bright side, it is very unlikely ICICI would end up like IceSave. Chances are, if the FSA suspect anything like they did with Kaupthing, they will step in, and if ICICI really is in bad shape, accounts will be moved elsewhere.

The only people who should be worrying is those who need access to their money, just in case they lose access at a crucial time.

jingle68

The only people who should be worrying is those who need access to their money, just in case they lose access at a crucial time.

I thought thats what current accounts were for?

Ive term bonds in ICICI & KE (now ING)
Are they being put at risk by rumour & runs on the banks caused by panick?
Would there be as many problems if the higher interest accounts were restricted to people who didnt want to 'dip' into them every 5 minutes?

I dont know?

Bromley86

Don't worry. The lack of cheap credit in the future will fix that imbalance. See, markets do work .

Andrew64

This seems to be why ICICI India is having problems. I doubt that this will have much impact on ICICI UK, which is a fully registered UK bank.

http://economictimes.indiatimes.com/Equity_forex_mkts_channels_for_spreading_crisis_to_India_RBI/articleshow/3586684.cms

"Quoting a study, Reserve Bank of India Deputy Governor Rakesh Mohan had said earlier that there was no evidence of any direct impact on India on account of exposure to the sub-prime markets.

However, a few banks did suffer some impact on account of the mark-to-market losses. These were caused by widening of the credit spreads arising from the sub-prime episode on term liquidity in the market, even though the overnight markets remained stable, he had said.

Earlier, a Finance Ministry official had said the Indian banking sector saw an MTM loss of about Rs 410 crore due to their investment in instruments of troubled US financial giants such as Lehman Brothers and AIG.

ICICI Bank accounted for three-fourths of the losses."

ballyc

I work for a global IT consultancy with a large presence in India my colleagues in India are currently sending lots of email about ICICI it may go take a look at the following link they sent out in an email

http://www.thehindubusinessline.com/2008/10/12/stories/2008101251180100.htm

Andrew64

Interesting! The CAR is more than 13%, which is very good. And yet the CDS is 900 and the credit rating is just BBB-.

Steve_xx

The Economic Times

ICICI has no sub-prime risk: Moody's, S&P
12 Oct, 2008, 1256 hrs IST, PTI
NEW DELHI: Battered by rumours casting doubts about its financial health, ICICI Bank on Sunday received a shot in the arm with global rating agencies Moody's and S&P giving it a thumbs up saying its overseas arms have no significant sub-prime risks.

"ICICI Bank's UK subsidiary has no high risk sub-prime securities and enjoys robust asset quality and liquidity," Moody's said in its latest credit report.

Separately, another leading rating agency Moody's said the Indian lender's credit fundamentals remain sound and any mark-to-market loss would not have any significant impact on its credit profile.

These ratings assume importance in the wake of reports that it was over-exposed to risk caused by the global meltdown and that the bank's loan profile was not fully secured and credible.

Interestingly, Morgan Stanley in one of its recent reports had said that among Asian banks, ICICI Bank has the largest exposure to weak global markets.

Moody's reaffirmed its rating on ICICI Bank UK Plc with a "stable outlook" in its latest credit opinion, which was released after a sharp plunge of about 20 per cent in ICICI Bank's share price on Indian bourses. Moody's also said that ICICI continues to have highest rating for senior among Indian banks and it has "no high risk sub-prime securities in ICICI Bank UK investment book."

At the same time, S&P's senior director, financial institutions ratings, Asia, Ritesh Maheshwari, said that "credit fundamentals of ICICI Bank continue to remain sound despite the reports on its exposure to Lehman Brothers or the Bakerie group."

These have to be seen in the context of the 10 billion dollar capitalisation of the bank and one billion dollar of profits, Maheshwari said.

He added that while the overseas investment portfolio might be subject to mark-to-market valuation loss but it should not be significant enough to hurt ICICI Bank's credit profile.

Moody's retained its ICICI Bank UK rating at 'Baa1' for senior debt, which is higher than the foreign currency senior debt rating of any Indian bank.

The rating reflects the bank's improving core banking activities and robust asset quality, as well as the developing franchise within the UK, Moody's said, adding that the corporate banking business is centered on providing services to Indian corporates which are in the UK, including merger and acquisition advice, forex business and syndicating Indian paper.

"It has robust asset quality ratios with no loans classified as impaired. It has also stated that ICICI Bank UK maintains a rather conservative investment policy and does not hold any sub-prime assets, nor does it have exposure to CDOs, SIV/SIV Lites and leveraged loans.

"The mark-to-market impact in its investment book is not associated with any structured or high-risk sub-prime related securities but is due to the general widening of the credit spreads due to the global market conditions," the agency said.

It further asserted that ICICI Bank UK has a robust liquidity position and that ICICI UK has a relatively high level of capitalization, with total capital adequacy at 19 per cent at March 31, 2008 and ICICI UK has a strong backing from its parent ICICI Bank Limited.


Link: http://economictimes.indiatimes.com/News/News_By_Industry/Banking_Finance_/ICICI_has_no_sub-prime_risk_Moodys_SP/articleshow/3586424.cms