ICICI Bank Canada building M&A bridges to India - Tera Perkins

ICICI Bank Canada is building mergers and acquisition advisory capacity into its corporate lending team, one of several moves the Canadian division of India's second-biggest bank is making to boost its presence here.

The nascent Canadian subsidiary, which got its start 3½ years ago, has an asset base of more than $2-billion. About two-thirds of it comes from corporate customers, said chief executive officer Hari Panday.

"We are just starting to get into the M&A field," Mr. Panday said during a recent interview in his office on the top floor of Toronto's Exchange Tower, in the heart of the city's financial district.

The bank has more than 100 domestic and international corporate clients, and offers services ranging from deposit accounts to term loans to trade finance.

Its core strength is helping Canadian companies venture into India, and Indian companies venture into Canada, Mr. Panday said. When it comes to its burgeoning M&A practice, the bank plans to focus on automotive, resource and manufacturing clients.

Mr. Panday has hired a couple of MBA grads from the University of Toronto's Rotman School of Management, and sent them to India for a stint "to get inducted." He gets some of his team from the parent bank, while most he poaches from Canadian rivals.

"We are working very closely with Canadian companies that are trying to do joint ventures in India," he said. The bank is hoping to leverage its knowledge of the burgeoning Indian market to attract new corporate clients who see opportunity in that country, but don't have sufficient first-hand knowledge of the market to take advantage of it. ICICI will provide them with market intelligence obtained on the ground, Mr. Panday said.

He hopes the same strategy will also attract personal banking customers to the new wealth management business.

Last year, ICICI Bank Canada created its own subsidiary, ICICI Wealth Management Inc. It is considered by the Ontario Securities Commission to be a limited market dealer, meaning it can sell certain products to accredited, or wealthy, investors.

The bank is about to launch a $400-million (U.S.) third-party private equity fund that will be run by asset managers in India, who will put the money to work in investments in infrastructure, manufacturing and technology. ICICI is distributing the fund - or finding investors who can put at least $250,000 (U.S.) into it - and a certain allocation will go to Canadian investors.

The private equity fund will mark the bank's official move into wealth management, and it hopes to follow that up with the sale of mutual funds. But selling big-ticket items to accredited investors requires a branch presence, something that's in relatively short supply at ICICI Bank Canada.

The bank has largely eschewed the branch model in favour of dealing with its retail clients online or by phone. It has six branches in total across the country - two in the Vancouver area, and four in the Greater Toronto Area, including one that sits right next to Mr. Panday's office at the top of the Exchange Tower.

Canada was one of the first countries that ICICI Bank Ltd. - an Indian powerhouse with assets of more than $79-billion (U.S.) - ventured into. The only other foreign subsidiaries it currently has are in Russia and Britain, although it has branches and offices scattered around the globe.

When it decided to open operations abroad, ICICI based its decisions on which countries had the largest expatriate communities and in which countries Indian companies were starting to make inroads, Mr. Panday said. It began by providing services to the Indo-Canadian community.

But, Mr. Panday says proudly, ICICI Bank Canada quickly expanded beyond the Indo-Canadian community thanks to its Internet model.

It has customers in every province, and 7 per cent of them are in Quebec, Mr. Panday said.

Its retail customer base has grown from 12,000 to more than 125,000 in the past two years, and just topped the 100,000-mark in December. The bank has about 140 employees in Canada, and a further 60 or so in India carrying out some back office functions and operating a call centre.