Moody's today re-affirmed its financial strength rating of 'C-' for ICICI Bank, given its sizeable retail deposit franchise as well as its importance to the national payment system as the second-largest commercial bank
New Delhi, : A day after downgrading its rating of public sector lender State Bank of India's (SBI) financial strength, Moody's today re-affirmed its rating for ICICI Bank and said the private sector lender continues to maintain a robust franchise and a strong liquidity, capitalisation and earnings profile, reports PTI.
"Moody's believes that the probability of systemic support for ICICI Bank is high, given its sizeable retail deposit franchise as well as its importance to the national payment system as the second-largest commercial bank," the ratings agency said.
The reiteration of a financial strength rating of 'C-' for ICICI Bank came a day after Moody's downgraded SBI from 'C-' to 'D+' on account of the public sector lender's deteriorating asset quality and rising non-performing assets (NPAs).
A 'D' rating suggests "modest intrinsic financial strength, potentially requiring some outside support at times", while a 'C' rating denotes "adequate intrinsic financial strength".
On ICICI Bank, Moody's said the rating reflects the bank's solid franchise as the second-largest commercial bank in India.
"In addition, strong capitalisation, liquidity and earnings profile support the rating.
"The rating also reflects its high borrower concentration in the form of mandatory government securities portfolio, weaker asset quality compared with peers, a difficult operating environment due to rising interest rates, uncertainty in the global economy and the intense competition it faces in domestic markets," Moody's said.
ICICI Bank, India's largest private sector lender, has an asset base of $90 billion. The private lender had over 2,500 branches and over 6,000 ATMs at the end of last fiscal.
It has three main business lines-retail banking; wholesale banking, including corporate and investment banking; and international banking.
According to Moody's, after consolidating its business for two years in order to overcome the difficult economic conditions and rising delinquency in consumer loans, ICICI Bank posted moderate asset growth of 12% in 2010-11.
"By leveraging its technological investments and favourable personnel profile, it has developed systems and procedures to offer efficient banking services to Indian customers. The acquisition of Bank of Rajasthan in August 2010 has also helped in strengthening the franchise and branch network in northern India," it said.
According to Moody's, ICICI Bank is one of the few financial services brands from India that is recognised in developed Asian and Western financial markets.
'ICICI Bank has also been a forerunner in developing financial products that meet the growing needs of Indian corporates and retail consumers. This has resulted in a strong and diversified earnings profile," Moody's said.
The agency said corporate loans and secured retail loans will be the growth drivers for the bank in the future.
"It has a market share of around 6% in deposits and banking assets and is closely intertwined with the fundamentals of India's economy," Moody's said.
The bank has a diversified earning profile, with corporate and retail loans contributing 21.3% and 38.7%, respectively, to its total business.
The remaining loans are spread across the rural sector (9.7%), small and medium enterprises (4.8%) and overseas locations, which are primarily corporate loans (25.5%).
The ratings firm also pointed to ICICI Bank's capital adequacy ratio, which is 19.6%, and core Tier-I ratio of 13% to justify its rating.
"It has been able to control net addition to gross NPAs by increasing its recovery efforts," Moody's said.
The credit ratings agency had in September last year assigned a 'C-' rating to ICICI Bank and said it has a strong franchise and sound financial position.
ICICI Bank reported a 53% growth in consolidated net profit to Rs1,667 crore during the first quarter of 2011-12 from Rs1,091 crore in the same period last fiscal.
Its total income went up by 8.9% during the quarter ended 30th June to Rs14,749 crore from Rs13,535 crore in the same period of the previous fiscal.
Speak Asia’s financial advisor and the man behind the money transfer from India has confessed that the company’s ‘business plan’ was nothing but a Ponzi scheme, which works with continuous enrolling of investors and replaces them as they suffer losses and quit the scheme
Speak Asia's troubles seem to be not ending with the recent confession of its financial consultant Sanjeev Dandona to the Economic Offences Wing (EOW), that the company was indeed running a Ponzi scheme. Earlier in 2002, Mr Dandona (along with seven other people) was charge-sheeted by the Central Bureau of Investigation (CBI) for allegedly issuing forged permits to new auto-rickshaws in New Delhi. But more about that later.
"He (Mr Dandona) has confessed that the company was running a Ponzi scheme," an official close with the investigation of Speak Asia, which had duped people on the pretext of promising income for merely filling e-surveys, told Moneylife.
Mr Dandona was arrested by the EOW on 29th September, after it was learnt that he was the proxy owner of Kritanj Management & Allied Services and is linked with Speak Asia. Kritanj Management is the master distributor of Singapore-based Haren Ventures Pte Ltd (HVP) for e-zines in India. Mr Dandona is also alleged to be advising HVP and Tulsient Tech Pvt Ltd and also transferring funds collected by Speak Asia agents to Singapore.
Just the day after the arrest of Mr Dandona, it was revealed that the online surveys, which Speak Asia used to claim (and its agents used to believe), were actually created not in Singapore, but in Mumbai. This was revealed following a confession from Nayan Khandor, a Web designer and director of Dadar (central Mumbai)-based Brand Salon, that his firm was active in creating the online surveys for Speak Asia.
According to an investigation officer, Mr Khandor confessed that he was given the task of creating online surveys and designing the e-magazine by Speak Asia's chief executive Manoj Kumar Sharma and has been involved in this job since February 2010. The material seized from Mr Khandor's office also indicates his close relation with Speak Asia.
Coming back to Mr Dandona—he was earlier charge-sheeted by the CBI along with seven other people, including three officials from the Transport Department of Delhi Government for allegedly issuing forged permits to new auto-rickshaws. Last year in May, Justice Vipin Gandhi of the Delhi High Court dismissed Mr Dandona's petition saying, "Prima facie, his involvement appears to be deep-rooted. It cannot be said that on the basis of the allegations contained in the charge-sheet the petitioner W.P (Crl.) 586/2010 Page 15 of 16 may not have been involved in the criminal acts attributed to him. Consequently, I see no merit in this petition and dismiss the same."
Ravishankar, with more than 20 years of experience, was till most recently the CFO and then the MD and the CEO of Geometric Ltd
TVS Capital Funds Ltd, the asset manager of TVS Shriram Growth Fund, a Rs 600 crore mid-cap growth fund, has expanded its leadership team with the induction of G Ravishankar. Ravishankar joins the team as an executive director & CFO.
Ravishankar, with more than 20 years of experience, was till most recently the CFO and then the MD and CEO of Geometric Ltd, an engineering services company. At Geometric, he played a crucial role in turning around the company. Prior to joining Geometric, Ravishankar has held various positions in General Electric India (GE) for about 14 years, where his last position was as the CFO of GE Healthcare, South Asia. He was with GE's Financial businesses earlier, where he culminated his tenure as the vice president and head of risk for their consumer finance wing.
Ravishankar is a chartered and cost accountant with bachelor's degree in chemistry.
About his joining TVS Capital Funds, Ravishankar said, "Private equity is the next logical step to build my career as it is a platform to make an impact professionally and contribute to India's entrepreneurial growth story. TVS Capital Funds' mission of "empowering nextgen entrepreneurs" while giving superior returns for investors is something that I found very attractive. I look forward to helping the firm create the top private equity AMC in India. It will be a privilege to work with its marquee investors, growing portfolio companies, the entrepreneurial management team and its eminent board and advisory members."
D Sundaram, vice chairman and MD of TVS Capital Funds said, "We are delighted to have Ravishankar joining us as Executive Director & CFO. With his experience he will add tremendous value to our organization's capabilities. We wish him all the best".