ICICI Bank 2003 Annual Report Download - page 23
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21
Business Overview
take large exposures to adopt an originate-and-sell-down strategy. This not only increased
the risk-adjusted return on the capital employed but also enabled us to offer a comprehensive
solution to our corporate clients. ICICI Bank’s dedicated Structured Finance, Credit & Markets
Group, with expertise in financial structuring and related legal, accounting and tax issues,
actively supports the business groups in designing financial products and solutions. This
Group is also responsible for managing the asset portfolio by structuring portfolio buyouts
and sell-downs with a view to increase the risk-adjusted return on the capital.
During fiscal 2003, ICICI Bank focused on the agri-financing segment and developed several
innovative structures for agri-business, including dairy farming, farmer financing and
warehouse-receipt-based financing. We achieved robust growth in this segment and are
working with state governments and agri-based corporates to evolve viable and sustainable
systems for financing agriculture. We have also integrated our rural banking, micro-finance
and agri-financing activity to offer integrated banking services in rural areas.
Treasury
The principal responsibilities of the Treasury included management of liquidity and exposure
to market risks, mobilization of resources from domestic institutions and banks and international
multilateral and bilateral institutions and banks, and proprietary trading. Further, the Treasury
leveraged its strong relationships with financial sector players to provide a wide range of
banking services in addition to its liability products.
In fiscal 2003, the balance sheet management function within Treasury managed interest-rate
sensitivity by actively using rupee-interest-rate swaps as well as by adjusting the duration of
the Government securities portfolio held for compliance with Statutory Liquidity Reserve
(SLR) norms. Further, efforts were undertaken to make the banking-book-interest-rate positions
more liquid by selling illiquid loans and substituting them with marketable securities.
The focus of trading operations was active, broad-based market-making in key markets including
corporate bonds, Government securities, interest-rate swap and foreign exchange markets. A
focus area in fiscal 2003 was the delivery of market solutions to corporate clients in various
areas such as foreign exchange, fixed income and swaps. There was a significant increase in
both the volumes and profits from foreign exchange transactions, swaps and loan syndication.
As one of the largest players in the corporate debt market, we offered two-way quotes for
many corporate debt papers, thereby increasing the liquidity and depth of the market.