Like a magnet attracting iron filings, the pull of Greater Vancouver, with its large Indo-Canadian population and one of the hottest provincial economies in the country, was simply too much for Toronto-based ICICI Bank Canada to resist.

A relative newcomer to Canada, the bank is a subsidiary of Mumbai-based Industrial Credit and Investment Corp. of India Ltd., India’s largest private-sector bank. ICICI Bank Canada recently completed its first expansion outside Ontario by opening a branch in downtown Vancouver.

“There are a number of reasons why we chose to expand to Vancouver first,” says ICICI Bank Canada’s chief executive officer, Hari Panday.

“First and foremost, after the Greater Toronto Area, Greater Vancouver has the largest concentration of Indo-Canadians. Having our parent company in India means that the Indo-Canadian community on the West Coast offers us the quickest possible brand recognition.”

Panday also refers to the Greater Vancouver market as “low-hanging fruit” for his bank because a major part of its marketing to the Indo-Canadian community is aimed at serving clients’ domestic banking needs, as well as their banking and investment needs in India. The latter includes sending money home to family members in India, and buying property and investing in businesses on the subcontinent.

“We also believe the strong B.C. economy, which is becoming more and more diversified, and the Winter Olympics coming in 2010 present a big opportunity for a bank such as ours,” Panday says. “In Greater Vancouver, we’re an alternative to the big banks and to the credit unions — particularly with our cross-border services to India.”

Panday adds that Greater Vancouver’s cultural diversity beyond the Indo-Canada community was an equally strong attraction that helped pull ICICI Bank Canada to the West Coast. In other words, the bank doesn’t intend to focus only on Indo-Canadians, who, according to the 2001 Canada census, numbered slightly more than 142,000 in Greater Vancouver. “We don’t want to place ourselves in a narrow market space,” Panday says. “Occupying the Indo-Canadian niche got us started in Canada, and now we are looking at the wider marketplace.”

ICICI Bank Canada is now targeting other Asian markets in Canada, with an emphasis on recent immigrants. That strategy is already implemented in its four Ontario branches (three are in Toronto, and the other is in Brampton). The strategy is also being used at the Vancouver branch, which opened its doors Oct. 5. ICICI Bank Canada bank machines operate in Chinese, French, Hindi, Punjabi and Tamil, as well as in English.

The bank is implementing this strategy in Ontario and British Columbia with mainstream media advertising, as well as direct mail.

To attract newcomers to Canada, the bank has created a product it says is unique to Canadian banking called the “Hello Canada Newcomers Account.” It is tailor-made for immigrants. In fact, it is designed to help them before they even set foot in Canada.

“People coming here from India can now open this account with us before they arrive, and we are finding that it is very attractive to newcomers,” Panday says. The account is designed to overcome one of the most difficult obstacles an immigrant faces — acquiring a Canadian credit rating, a credit card and raising enough cash to get started in Canada.

Before the newcomer arrives, credit cards and loan requirements are pre-approved with the help of the parent bank in India, which does the required background checks.
Although the newcomer account service now is available only in India, Panday says, the bank plans to expand it to Hong Kong and China.

ICICI Bank Canada also offers qualified newcomer clients residential mortgages of up to 65% of a home’s value and auto loans of up to 80% of the vehicle’s value. “The most important thing is that this account gets them started,” Panday says.

Having India’s second-largest bank behind ICICI Bank Canada also gives it solid support as it establishes itself in Canada. The parent bank has 560 branches in India, and subsidiaries in Britain and Russia, as well as in Canada. It also has also branch offices in Singapore and Bahrain, and representative offices in the U.S., China, United Arab Emirates, Bangladesh and South Africa.

The Canadian subsidiary was established in December 2003, and the first branch opened in Brampton the following April. Since then, ICICI Bank Canada has acquired about 28,000 retail customers and has built an asset base of approximately $460 million.

@page_break@ICICI Bank Canada is also attracting customers by offering higher interest rates on both Canadian- and U.S.-dollar accounts, Panday says. “Our strategy is to be ahead of the pack, and we run a tight operation so that our expenses are kept to a minimum,” he adds.

The bank positions its savings account rate against money market and mutual fund returns. “Once you take out the MER, for example, there are not many [money] market funds that will pay you 2.75% on a savings account,” he says. “In a similar fashion, we have positioned our term deposits against the bond funds.”

But ICICI Bank Canada does not have the West Coast market all to itself. It will be competing with the government-owned State Bank of India (Canada) , which has been operating in B.C. for more than a decade with a branch in Vancouver and another in Surrey. A State Bank of India spokesman has announced that the bank will add another B.C. branch in Abbotsford next year.

ICICI Bank Canada isn’t settling for just one branch in B.C. Panday recently negotiated a deal for the site for a second branch in Surrey, where there is a high concentration of Indo-Canadians.

Commercial accounts represent a “significant portion” of the bank’s business, Panday says, and it has already done commercial mortgages in Greater Vancouver. “Word is getting out, and we are now doing some commercial financing in Edmonton and Calgary,” he adds. “Basically, we are raising our deposits in the retail market and deploying them in the commercial market.”

Looking into the future, Panday foresees that ICICI Bank Canada will next move into Alberta. “There is a lot of economic activity happening between B.C. and Alberta, and the two provinces fit together really well as a market,” he says. “And a lot of Alberta companies are doing oil and gas service work in India.”

The bank also plans to broaden its product base over the next year or two, and it has begun a preliminary analysis of providing its customers with wealth-management products.

“Wealth management is on our radar screen,” Panday says. “But first we want to make sure that our banking franchises are stable. Also, we want to understand all the investor elements fully before we come out with a suite of wealth-management products.”

Panday maintains he is not concerned about any possible mergers among the big Canadian banks. “That would only help us,” he says, “because, generally, when big banks merge there is dissatisfaction felt by some of their customers — and we will be there as an alternative.”

No matter what happens in Canada’s financial services sector, Panday is convinced that ICICI Bank Canada is here to stay. “We believe there is definitely a place in Canada for a bank such as ours,” he says. IE