Icici Bank and Icici Merger
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Transcript of Icici Bank and Icici Merger
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ICICI Bank and ICICIMerger
Mr Sanjay Medhavi a
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ABOUT ICICI BANK
Industrial Credit and Investment Corporation of India
Founded in 1995 by as a joint-venture of the World Bank
ICICI Bank launched internet banking operations in 1998.
In 2000, ICICI Bank became the first Indian bank to list on the
New York Stock Exchange. ICICI Bank is Indias second-largest bank.
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PROFILE OF ICICI BANK
Type: Public
Founded: 1995
Headquarter: Mumbai,Maharashtra,India
Industry: Banking, Financial service
Products: Customer Banking, Corporate Banking, Finance and insuran
private banking, Credit cards etc. Total assets of Rs. 5,946.42 billion (US$ 99 billion) at March 31, 2014
and profit after tax Rs. 98.10 billion (US$ 1,637 million) for the yearended March 31, 2014.
Employees: 79,978 (2014)
Website: www.icicibank.com
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ICICI and ICICI Bank Merger
The merger of ICICI and ICICI Bank created India's second largestbank after State Bank of India
India's largest finance company and largest private bankannounced on 24thOctober, 2001 that they are merging.
The merger created the nation's first universal bank, or one-stoprovider of virtually all types of financial services.
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Why did ICICI and ICICI bank Merge
ICICI merged with its banking subsidiary to obtain access to: cheaper funds for lending,
and to increase its appeal to investors so it could raise capital needed towrite off bad loans.
Cheaper Funds Cheaper funds after the announcement of Reserve Bank of
India that it would begin processing applications to createuniversal banks.
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Benefits of Merger
Economies of Scale through volumes in Operating Costs
Technology Development
Economies of Scope Large product suite (Cross Selling potential)
Optimization of Human Capital
Optimization of Financial Capital
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Benefits of Merger
Forward leap in the hierarchy of Indian banks A discontinuous jump in size and scale
Achieve size and scale of operations Leverage ICICIs capital and client base to increase fee income Higher profitability by leveraging on technology and low cost structure
Offer a complete product suite with immense cross-sellingopportunities ICICIs presence in retail finance, insurance, investment banking and
venture capital
Access to the ICICI groups talent pool
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Benefits of Merger
Improved ability to further diversify asset portfolio and businessrevenues
Lower funding costs Ability to accept/ offer checking accounts
Availability of float money due to active participation in the payments syste
Diversified fund raising due to access to retail funds Increased fee income opportunities
Ability to offer all banking products
Merged entity would have key competitive advantages and would be amore efficient provider of capital Bank
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Competitive advantages of the merged enti
After the merger, the combined entity became the second-largebank in India,
an asset base of over Rs. 1 trillion Large capital base
Extensive customer relationships & strong brand franchise
Complete product suite Technologyenabled distribution architecture
Low operating costs Vast talent pool
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Conclusion
The merger created a strong entity, redefined the banking in the high
competitive era of globalization aliberalization.
