ICICI Bank denies talks with Nigeria's Spring Bank for investments

ICICI Bank Ltd. | Bank - Private | BFSI | BSE: 532174 | NSE: ICICIBANK

16 Jun 2011 Evaluate

ICICI Bank denied that it is in talks with Nigeria's Spring Bank for any investment. Earlier, Spring Bank had released a statement claiming that it was in re-capitalisation talks and was in advanced discussions with four investment contenders, including ICICI Bank and U.S-based private equity firm Cloudleap Partners.

However, ICICI Bank which has got its presence in 19 countries has not expressed any intentions to enter the Nigerians market in the future. Spring Bank was identified as troubled bank by the Central Bank of Nigeria (CBN) during an industry wide audit in 2009. CBN appointed new management and injected fresh capital to revive it back to steady positive growth.

Recently, ICICI Bank, India's largest private sector bank, had decided to discontinue buying bilateral securitised portfolios of non-banking finance companies (NBFC) as stated in some media reports. This move by the bank came at a time when RBI was restricting lending by banks to NBFCs.

Bilateral securitisation is the sale of loan from NBFCs to a bank. Banks buy securitised portfolios from NBFCs to meet their priority sector requirement and private banks are the largest buyers of securitised papers of NBFCs. As per the RBI guideline, private banks have to lend 32% of their loans to priority sector and public sector banks have to lend 40%. Under priority sector lending, NBFCs borrow at a discounted interest rate.