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ICICI Bank, the largest private sector lender in the country, is set to close a couple of its branches in the UK.
The move follows the bank's decision to repatriate $100 million capital from its wholly-owned subsidiary ICICI Bank UK Plc. The subsidiary currently has 11 branches in the UK, and a branch each in Belgium and Germany.
ICICI Bank confirmed the development. "ICICI Bank is in the process of closing down two branches in the UK that cater to less than 2 per cent of the bank's retail customer base in that country. This move is in line with customers' preference to increasingly interact with the bank electronically, and, therefore, the move reflects the way customers do business with the bank," a spokesperson of the bank said in an e-mailed response.
These two branches, located in Coventry and Slough, were originally opened as satellite offices of the main branches in Southall and Birmingham. The private lender will remap the customers of these two branches to the main branches, the spokesperson said.
The bank, however, did not give details on the number of employees who will lose jobs as a result of this move.
In March 2013, ICICI Bank said it had received capital repatriation from its subsidiary in the UK. The capital repatriation comprised of redemption of $50 million of preference share capital and return of $50 million of equity capital, after receiving requisite approvals.
The bank had decided to repatriate capital from its UK arm following a slowdown in business growth there. ICICI Bank UK's total assets were $3.59 billion at the end of March 2013, compared to $3.98 billion at the end of December 2012.
The profit after tax for ICICI Bank UK in the fourth quarter of 2012-13 narrowed to $0.3 million from $10.5 million in the corresponding period of previous year. The net profit declined because the bank increased its provisioning for existing impaired loans during the quarter.
For the full year 2012-13, ICICI Bank UK's profit after tax was $14.4 million compared to $25.4 million in the previous year. The bank has maintained that despite capital repatriation its capital adequacy ratio in the UK was healthy at 30.8 per cent at the end of March 2013.
The bank has also received Canadian dollar 75 million capital repatriation from its subsidiary in Canada in May 2013. The bank currently has nine branches in Canada.
The bank's other subsidiary, ICICI Bank Eurasia in Russia, has one branch in St Petersburg. In addition, ICICI Bank has branches in the United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Dubai International Finance Centre and Qatar Financial Centre. The bank also has representative offices in the United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.
ICICI Bank closed last financial year with 3,100 branches in India, the largest among private sector lenders in the country.