ICICI shares dip on Russian exposure worry

A customer uses his card to withdraw money from an ATM in Jammu in this October 14, 2008 file photo.

MUMBAI (Reuters) - Shares in ICICI Bank fell 4 percent on Wednesday on concerns the bank's Russian assets may be vulnerable as firms there struggle to stay afloat.

ICICI shares were down 12.1 rupees at 284.30 rupees in a Mumbai market that was off 0.1 percent in the afternoon. The stock dropped to just above last October's low of 282.15 rupees, a break of which would take it to its lowest in nearly 4-½ years.

"The market is very concerned over the Russian exposure. Investors are expecting sharp write-downs as firms there are failing," said Amitabh Chakraborty, president for equities at Religare Securities.

The stock is down more than a third this year. It tumbled 21.2 percent in February and has seen more losses in March. Its market capitalisation has fallen to below that of smaller private-sector rival HDFC Bank.

"There are no losses in Russia," an ICICI spokesman said, but declined to put a value to the Russian assets.

Brokerage CLSA said in a recent note the Russian exposure under ICICI Bank Eurasia was $584 million, consisting largely of loans to customers and placements with banks.

The subsidiary was formed in 2005 after the Indian bank bought Russia's Investitsionno-Kreditny Bank.

The Russian operations do not have a meaningful deposit franchise and group companies fund 84 percent of the liabilities, CLSA said.

Last year, the management of NYSE-listed ICICI had to repeatedly assure investors and depositors after its exposure to collapsed Lehman Brothers triggered a slump in its share price.