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ICICI: $200 million Mark to Market?

From DNA: ICICI to take $200 million MTM hit

[Vishal Goyal, Edelweiss Analyst] pegs MTM losses on the bank’s UK books at around $200 million. The recent 100 basis points widening in spreads on investments globally may result in a loss of about $175 million on ICICI Bank’s holdings in bonds other than Lehman’s, Goyal said.

However, impact on the bank’s reported profit may not be significant as this MTM loss would be in the subsidiary account.

I don’t know what to believe but according to a reuters article, the management says the exposure is only 4 percent of the balance sheet.

But $200 million can be huge. That’s the whole quarter’s profit down the drain. That’s literally 900 crores. This is very very very big.

They’ve also booked losses on the $275 million derivatives sell off they did.

(Pet Peeve: Why do they keep saying the risk is under control? Chanda Kochhar said that on TV today, that the spreads are wide but it’s only M2M, not really reflective of losses on the credit etc. But then when you sell $275m you book the loss, no? Somethings not right in the state of ICICI)

Disclosure: No personal positions. Short in the Short only strategy (Click label below)