International rating agency Moody?s has reaffirmed its rating on ICICI Bank UK Plc (ICICI UK) with a stable outlook, in a credit opinion released on October 10. Also, ICICI Banks joint venture partner, Prudential plc, confirmed its commitment to businesses with the bank.
In another development, the bank on Sunday filed a police complaint in Mumbai against some brokers and websites for allegedly spreading rumours about the bank. According to Moody?s, the banks rating has been reaffirmed at Baa1 for senior debt, which is higher than the foreign currency senior debt rating of any Indian bank. Moody?s said the rating reflects the banks improving core banking activities and robust asset quality, as well as the developing franchise within the UK.
The corporate banking business is centred on giving services to Indian corporates in the UK, including M&A advice, foreign exchange business and syndicating Indian paper.
?It has robust asset quality ratios with no loans classified as impaired. It has also stated that ICICI Bank UK maintains a rather conservative investment policy and does not hold any sub-prime assets, nor does it have exposure to CDOs, SIV/SIV Lites and leveraged loans?, the report said.
The report also says the mark-to-market impact in the bank?s investment book is not associated with any structured or high-risk sub-prime related securities but is due to the general widening of the credit spreads due to the global market conditions. Moody?s confirmed that ICICI Bank UK has a robust liquidity position and that ICICI UK has a relatively high level of capitalisation, with total capital adequacy at 19% at March 31, 2008.
Standards & Poor?s, another rating agency also cleared the clouds around the bank. ?The credit fundamentals of ICICI Bank continue to remain sound despite the reports on its exposure to Lehman Brothers or the Bakerie group. These have to be seen in the context of the $10-billion capitalisation of the bank and $1-billion of profits,? said Ritesh Maheshwari, S&P?s senior director, financial institutions ratings, Asia.
He also mentioned that while the overseas investment portfolio might be subject to mark-to-market valuation loss but it should not be significant enough to hurt ICICI Bank?s credit profile.
Joining in a bid to scotch speculations about the partnership, Prudential plc, joint venture partner of ICICI Bank in its life insurance and asset management operations, has denied any rumour about its commitment to India and its joint ventures with ICICI. The rumour is absolutely unfounded, said the spokesperson.
Prudential, through its joint venture with ICICI, is fully committed to India, said the spokesperson. ?We have together built powerful and market leading franchises. We have experienced rapid growth, creating material value for our shareholders. The relationship between Prudential and ICICI is exceptionally strong and mutually beneficial,?? said Mark Tucker, CEO, Prudential Group.
? India is one of the cornerstones of our Asian growth strategy. Our JV with ICICI is highly productive and value enhancing. We are in India for the long term. Our commitment to India and to our partner remains immense,? he said.
In the complaint filed before additional commissioner of police, Economic Offence wing of the Mumbai Police, ICICI Bank said certain people were acting in concert to spread ?malicious rumours? through various media to gain financial benefits by hurting the bank?s reputation.