‘UK subsidiary has no exposure to US sub-prime credit’

Tuesday, September 30, 2008 at 3:09 am under Business News

India’s largest lender, ICICI Bank declared on September 29 (2008), that its UK subsidiary does not have any direct or indirect exposure to the US sub-prime credit, and has a high rating to 98 per cent of its USD 3.5-billion non-India investment book. The bank came with a clarification, after its shares plummeted by 12.11 per cent to Rs 493.30 on worries, about the bank’s mark-to-market exposure through various credit instruments.

“ICICI Bank UK PLC has zero exposure to US sub-prime credit, whether directly or through credit derivatives such as collateralised debt obligations (CDO), credit linked notes (CLNs) and credit default swaps (CDS),” an ICICI Bank statement clarified.

The lender’s UK subsidiary – ICICI Bank UK PLC has only 18 per cent exposure to the United States in its non-India investment book. Also, about 89 per cent of its investments are rated ‘A’ and above by global rating agencies, the bank claimed.

Further, ICICI Bank UK PLC holds cash equivalent instruments, inter-bank placements and certificates of deposit of USD 1.1-billion, where it has no exposure to US banks. ICICI Bank UK PLC has a capital adequacy ratio of 17.4 per cent as on June 30 (2008), and a total balance-sheet size of USD 8.5-billion. ICICI Bank has consolidated assets of about USD 113-billion.

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