ICICI Bank to raise Rs 10,000 crore via bonds

I CICI Bank plans to raise up to Rs 10,000 crore via tier-1 bonds for its capital base and business growth.

Rating agency ICRA has assigned an ‘AA+ (hybrid)’ rating to the proposed offering of the private bank. It is described as a hybrid subordinated instrument, with equity-like loss-absorption features.

The distributable reserves that can be used to service the coupon in case of inadequate profit or a loss stood at a comfortable 10.4 per cent of risk-weighted assets as on June 30, ICRA stated. The reserves available for servicing the coupon (interest payments) improved from 7.7 per cent of risk weighted assets in March 2016 to 9.9 per cent in March 2017.

The capital adequacy ratio was sound at 17.89 per cent at June end, it added. The resource position was healthy, with the share of low cost deposits — the current and savings accounts — at 49 per cent as of end-June.

The loan book at March end was Rs 4,64,232 crore, with a market share of six per cent in banking sector advances.

The domestic loan book grew 10.9 per cent over a year during the April-June quarter. Overall growth in advances was moderate at 3.3 per cent, due to shrinkage in overseas ones of minus 25 per cent. So, the loan book stood at Rs 4,64,075 crore as on June 30.