Dubai buys into ICICI

By Dayan Candappa

DUBAI (Reuters) - Dubai's government has bought 2.87 percent of ICICI Bank, India's second-largest lender, through Dubai International Capital, one of the agencies it has used to invest in some of Europe's biggest banks.

With more than $79 billion in assets, ICICI built its business by chasing consumer loans in Asia's third-largest economy, which Dubai hopes will help it become a global financial centre much as China powered the rise of Hong Kong.

The stake was worth 30.03 billion Indian rupees ($741.5 million) at Thursday's closing price and would make Dubai International Capital the bank's sixth-largest shareholder.

"The strategic investment in ICICI supports the global diversification and growth mandate for DIC and its parent company, Dubai Holding...," Dubai International Chief Executive Sameer al-Ansari said in a statement on Thursday.

He did not say how much Dubai International paid or when it bought the stake, its first investment in India.

Dubai Holding is owned by the government of Dubai, which said in March it wanted to build two of the world's largest financial institutions by 2015.

Dubai International and other state-owned agencies have bought into Deutsche Bank AG, HSBC Holding Plc and Standard Chartered Plc in the past 12 months.

The 2.2 percent stake in Deutsche Bank is held by an arm of the Dubai International Financial Centre, which the government set up to build a financial services hub in the Gulf Arab emirate.