One of India’s biggest banks by assets, ICICI Bank, has ditched its operations in SA, eight years after becoming the first private sector bank from the Asian country to open a branch in Africa.
In January 2016 the bank opened its first full-service branch in Johannesburg, offering banking activities only for corporates. At the time the lender said it would provide financial assistance to Indian joint ventures and subsidiaries across Africa and offer trade finance and short-term funding for companies that did business with India.
“The opening of this new branch is testimony to the strengthening trade relations between India and Africa over the last decade. We believe that ICICI Bank with its offices across major global centres including Singapore, Hong Kong, Shanghai, Dubai, Bahrain, New York and London is well poised to cater to the banking requirements of Indian corporates having a presence in SA as well as the African continent, and [for] the SA corporates that share active trade links with India,” Vijay Chandok, a top executive of ICICI Bank, said at the time.
However, it seems the bank, which had assets worth $220bn (nearly R4-trillion) at the end of 2022, did not enjoy much traction in the highly competitive SA market.
A bank spokesperson confirmed the company had decided to disinvest from SA but would not be drawn on reasons for the move.
“The Prudential Authority of SA has approved ICICI Bank SA branch’s request for the cancellation of its authorisation to conduct business in the country with effect from December 15 2022. Accordingly, ICICI Bank ceased to be an authorised dealer in foreign exchange in SA,” an ICICI Bank official said.
ICICI’s books show that at the end of December 2022 its non-India-linked corporate portfolio fell by 42.8%, or about $285m, on a year-on-year basis. Of the overseas corporate portfolio, about 86% comprises Indian corporates, with 8% being overseas corporates with Indian links.
According to the consulate-general of India, Indian businesses have a large presence in SA, mainly in the pharmaceutical, IT, vehicle, banking and mining sectors, with an investment of more than $9bn. Leading Indian companies in SA include Tata, Mahindra & Mahindra, L&T, Jindal and Vedanta.
India and SA are also part of Brics, an acronym for five leading emerging economies: Brazil, Russia, India, China and SA.
Meanwhile, the Prudential Authority (PA) gave notice on Friday that Switzerland-headquartered Deutsche Bank (Suisse) SA has been given the green light to have a presence in SA.
“Notice is hereby given for general information, in accordance with the provisions of section 30 of the Banks Act, that Deutsche Bank (Suisse) SA, an institution that lawfully conducts business similar to the business of a bank in Switzerland, has been granted permission by the PA ... to establish a representative office within SA,” Fundi Tshazibana, the PA’s CEO, said in a notice.
She added, however, that this representative office “is not authorised to conduct the business of a bank in SA”.
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