ICICI LIMITED MERGE

WITH
ICICI BANK

REVERSE MERGER

Company with the track record of having a less profit earning

Or loss making amalgamates

Viable company to have benefits of economies of scale of

production

Marketing network

Profit earning company survives and the loss making company

extinguishes its existence.
Sick companys survival becomes more important

HISTORY
ICICI Banking Corporation
Ltd.

ICICI Limited
Formed in: 1955

Formed in: 1994

Operations: Retail Banking/
Core
Forays:

Banking Solutions
Life Insurance
General Insurance
BPO

Operations: Provide foreign currency

Forays: Project finance
Underwriting
Venture Capital
Mutual Funds

STRONG COMPLEMENTARY
ORGANIZATIONS
ICICI LTD
Large capital base
Diversified and de-risked
asset
Strong brand
Well established corporate
relationship

ICICI BANK

Largest private sector bank

Strong retail finance

Technology leader among banks

REASONS
proportion of loans made in the early and mid-1990s
turning bad
Low-cost resources have been recurring themes
Development Financial Institutions (DFIs) were cut off
from concessional funding in the early 1990s
Growing competition from other financial intermediaries

Harsher environment for corporates

Competitive advantage of the merged entity

Large capital base
Vast talent pool
Technology enabled distribution architecture
Low operating cost
Extensive customer relationships and strong brand
Complete product suite

PROCESS
Transfer of ICICIs share holding in ICICI BANK to an SPV
prior to the merger

Swap ratio :
2 ICICI share for 1 ICICI Bank LTD.

Divestment in FY 2003 by the way of appropriate

placement

Consolidation of Retail operations

Merger of ICICI PFS and ICICI capital services with ICICI

Merger Effective On:

MARCH 31, 2002 ( On the date of RBI approval)
Share holders approval
High court approval
Accounting for the merger in line with international best
practices
Purchase method mandatory under US GAAP be adopted
under INDIAN GAAP as well

BENEFITS
Having similar operating architecture, people and process
Merged entity consequently well positioned to harness
Synergistic advantages and their by provide benefits to both ICICI and ICICI
Bank
Forward leap in the hierarchy of Indian banks
Achieve size and scale in operation
ICICIs capital and client base to increase fee income
Higher profitability by leveraging on technology and low cost structure
Presence in retail finance, insurance, investment banking and venture capital

CONCLUSION
The merger created a strong entity
Redefine banking in the highly competitive era of the
globalization and liberalization

THANK YOU