The Hindu : No liquidity crisis, says ICICI Bank

Online edition of India's National Newspaper
Tuesday, Apr 15, 2003

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No liquidity crisis, says ICICI Bank

By Our Special Correspondent

MUMBAI APRIL 14. ICICI Bank today reiterated that it is not facing any liquidity crisis and has more than sufficient funding resources available to meet all its liability payments and other commitments.

"Like all other banks, ICICI Bank maintains at least 25 per cent of its demand and time liabilities in the form of liquid government securities to meet the statutory liquidity ratio requirement and 4.75 per cent of its demand and time liabilities in the form of cash with the Reserve Bank of India to meet the cash reserve ratio requirement. These provide additional liquidity comfort, if required,'' it stated in a press release.

ICICI Bank's total deposits have increased from Rs. 32,085 crores at March 31, 2002 to Rs. 41,316 crores at December 31, 2002, with nearly 60 per cent of outstanding deposits being from retail sources.

It also revealed some key figures to ally fears on its equity exposure. ICICI Bank's total exposure to equity shares in its proprietary trading portfolio is now only about Rs. 18 crores. ICICI Bank's funded exposure to brokers secured by shares was only about Rs. 4 crores at March 31, 2003.

The non-fund based exposure to brokers at that date, net of cash margins/bank guarantees provided by the borrowers, was only about Rs. 56 crores.

ICICI Bank undertakes sell-down and securitisation of its credit portfolio as part of its ongoing strategy adopted over the past two years to optimally utilise its capital and manage its portfolio composition.

Further it stated that ICICI Bank has met all the withdrawal demands over the last three days from its own cash resources.

ICICI Bank's net worth is Rs. 7,113 crores, the second largest in the Indian banking system. The bank's capital adequacy at December 31, 2002 was 12.6 per cent (including Tier-1 capital adequacy of 8.2 per cent), well above RBI's requirement of 9 per cent.

At December 31, 2002, the bank had a specific provision coverage of 65 per cent against gross non-performing assets and a general provision coverage of 6.2 per cent against corporate standard assets, indicating the strength of the Bank's balance sheet.

ICICI Bank is rated AAA (indicating the highest level of safety of bonds and deposits), by the three major domestic rating agencies, CRISIL, CARE and ICRA. ICICI Bank has an investment grade international credit rating from the international credit rating agency Moody's.

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