ICICI Bank UK Plc, a subsidiary of private lender ICICI Bank, has sent equity capital worth $200 million back to its parent in the second quarter ended September 2021 (Q2FY22).
It was surplus capital in UK subsidiary as loan book there has declined. It will come into the capital base of the parent (ICICI Bank), bank officials said in an analyst call for Q2FY22 results. Its capital adequacy ratio of UK subsidiary stood at 21.7 per cent in September 2021, up from 19.8 per cent in September 2020 (Q2FY21).
This is not the first time the bank has repatriated capital from its foreign arms. In the year ended March 2015, the bank had received equity capital repatriation of Canadian $80 million from ICICI Bank Canada and $75 million from ICICI Bank UK. Also, earlier in March 2013, the UK subsidiary had sent back capital of $100 million. The Canadian subsidiary had also repatriated capital of Canadian $75 million in May, 2013.
The investment in subsidiaries is reduced while computing capital base adequacy. The extent of reduction has come down (as UK unit repatriated capital), they added.
According to the presentation filed with the BSE, the UK Unit, which is part of international business, saw its loans and advances shrinking to $1.40 billion in September 2021 from $1.98 billion in September 2020 (Q2FY21). The net interest income (NII) was also down to $10.2 million in Q2FY22 from 12.9 billion a year ago.
Its deposits also contracted from $2.12 billion in September 2020 to $1.75 billion in September 2021. The net impaired loans declined to $32.1 million as of September 30, 2021, compared with $77.8 million a year ago. The net profit from UK operations was down to $2 million in Q2FY22 from $4.9 million in Q2FY21.