ICICI Bank and ICICI

Merger
Submitted to:
Mr Sanjay Medhavi and Dr Ajai Prakash
By:
Krishna Prasad

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.

PROFILE OF ICICI BANK

Type: Public
Founded: 1995
Headquarter: Mumbai,Maharashtra,India
Industry: Banking, Financial service
Products: Customer Banking, Corporate Banking, Finance and insurance,
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 year
ended March 31, 2014.
Employees: 79,978 (2014)
Website: www.icicibank.com

ICICI and ICICI Bank Merger

The merger of ICICI and ICICI Bank created India's second largest
bank after State Bank of India
India's largest finance company and largest private bank
announced on 24th October, 2001 that they are merging.
The merger created the nation's first universal bank, or one-stop
provider of virtually all types of financial services.

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 to
write off bad loans.

Cheaper Funds
Cheaper funds after the announcement of Reserve Bank of
India that it would begin processing applications to create
universal banks.

Building blocks after merger (Organization

Change)

Organizational Values
Human Capital
Speed Capital
Brand Identity
Knowledge Capital
Technology Capital

These building blocks supplemented by organizational change created

right combination for achieving leadership in banking sector.

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

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-selling

opportunities
ICICIs presence in retail finance, insurance, investment banking and
venture capital

Access to the ICICI groups talent pool

Benefits of Merger
Improved ability to further diversify asset portfolio and business
revenues
Lower funding costs
Ability to accept/ offer checking accounts
Availability of float money due to active participation in the payments system
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 a

more efficient provider of capital Bank

Competitive advantages of the merged entity

After the merger, the combined entity became the second-largest
bank in India,
an asset base of over Rs. 1 trillion Large capital base

Extensive customer relationships & strong brand franchise

Complete product suite Technology
enabled distribution architecture
Low operating costs Vast talent pool

Conclusion

The merger created a strong entity, which

redefined the banking in the highly
competitive era of globalization and
liberalization.