NewDelhi, May 15, 2004
After opening its representative office in Dubai last year, ICICI Bank
is trying to get a bigger foothold in the UK and Canada. It already
has presence in the financial capitals of London and Toronto but is
now planning to open branches in specific NRI pockets such as Mississauga
and Southall.
In United Kingdom, Leicester with a 27 per cent Asian population and
Southall with a 70 per cent Indian population are being considered for
branch banking.
The ICICI bank, which currently has presence in five foreign countries,
believes it has tremendous cost advantages vis-à-vis international
banks such as HSBC and Citibank. While international banks save about
30 per cent on costs by outsourcing low-end functions of data entry,
call centre jobs and payment processing to India, ICICI Bank claims
to save as much as 70 per cent with both low-end and high-end jobs such
as product innovation and technology development based on Indian soil.
The bank has already garnered 15 per cent of the NRI fund remittances
market, which has a total market size of $ 17 billion a year. The international
operations broke even largely from fee income right in the first year
of its roll out although a 3-4 year break-even period had earlier been
envisaged.
In North America, Canada, ICICI Bank is considering setting up shop
in the areas of Mississauga, a suburb of Toronto with a 3.6 per cent
Punjabi and 1 per cent Urdu population, Scarborough and Unionville,
all in neighbouring areas of Toronto. These towns are not commercial
centres and therefore will not bring much corporate banking business
but have a prominent South Asian community which the bank is targeting
to offer consumer banking services.
The bank viewed the earlier agreement with the Emirates Bank International
(EBI) as the right model for application in other Gulf states as well
as in other parts of the world. In the Gulf, ICICI Bank was in advanced
stage of talks with the Commercial Bank of Qatar, as well as with banks
in Oman, Bahrain and Saudi Arabia.
Our epresentative office in Bangladesh is in the pipeline with the
bank's eyes set on the high margin, $ 2-3 billion annual trade flows
between the India and Bangladesh. Incidentally, State Bank of India's
Dhaka operations are said to be one of the most profitable among its
overseas branches.