1. A project submission for
Strategic Management
ICICI Bank
Presented by-
Diya Mazumder
Nahid Anjum
Shruti Bagchi
Arunabha Bagchi
Pratik Agarwal
Anindita Choudhary

2. Agenda
• Revenue
• Growth
• Market capitalization
• Business model
• Industry analysis
• Segment presence
• Financial analysis
• Cost structure
• Profit margin
• profitability

3. Agenda
• Products and services in each segment
• Competitive analysis of each segment
• SWOT analysis
• ICICI
• Competitors
• Past Strategies
• Current strategies
• Past & current strategies adopted by key competitors
• Critical analysis
• Industry analysis
• Porter’s 5 forces model
• Market size
• Growth rate
• Market share

4. Agenda
• Segmental analysis
• Understand the segment
• Size of each segment
• Growth of each segment
• Segmental changes
• Market share within each segment
• Dynamics of competitors
• Critical success factors
• Business model
• Demand drivers
• Analysis of cost & profitability
• Major costs
• Expected changes in the cost
• Components

5. Overview of Banking industry
•Despite economic crisis across the world, banks in India have shown significant growth
• Assets with banks have grown by 35% in FY09 from 17% in FY08
• Deposits have grown by 20% in FY09 from 22% in FY08

6. Growth in the Banking industry
• The assets of the Indian banking industry have increased over five times between March 2000
and March 2010.( US$250 billion to more thanUS$1.3 trillion.) The industry has recorded a CAGR
of 18% as compared to India’s GDP growth of 7.2% during the same period.
• The industry has become more efficient and productive over the years. It should be noted
that Indian banks remained flexible and were not badly hit by the financial crisis which hit
the western economies during 2008.
• The D&B report said the annual growth rate of old-time private sector banks stood at 7.1
per cent in assets, six per cent in deposits and 12 per cent in advances.
• The commercial banking assets to GDP ratio has increased to nearly 100 percent while
the ratio of bank’s business to GDP has recorded nearly twofold, from 68 percent to 135
percent
• The new age private sector banks such as HDFC, ICICI, and Axis have dominated the
growth with a year-on-year growth of 38.7% in the assets and 38.8% in deposits and
39.9% in advances as of 2008.
• Old-time private sector banks fared better in terms of profitability which stood at an
average 30 per cent.
• The industry average growth was about 25 per cent for deposits and 31 per cent for
advances
• Indian banking sector continues to remain fragmented, with the top 10 banks accounting
for 65 per cent and about 40 banks sharing 27 per cent of the assets.

7. Growth drivers in the banking industry
• Industrial development is fuelling rapid growth giving banking sector a major boost
• Demand: Infrastructure in demand for housing, car and personal loans
• Infrastructure: One of the biggest growth driver is expected to grow at 35% - 3 yr CAGR.
• Telecom spectrum lending: 3G and broadband spectrum auction have increased credit
demand
• Rural Penetration: Rural penetration by private banks is increasing
• Export Imports: Increase in export import enhances inland and outland bills business
• Consolidations and Expansions: Acquisition, merger and expansion by the industries is very
much prevalent since 2009

8. Market Share Of Different Players
The findings of the D&B reports suggest that-
• The public sector banks account for 73% of the total advances
• 74% of the total deposits
• 64% of the aggregate net profits amongst the scheduled commercial banks.
• The private sector banks range from 15-17%. .

9. Dynamics of Competition in the Banking
Industry
• One of the major determinants of competition in the market is concentration. Another
factor which plays a key role is the structure of the market. In the banking industry high
concentration tends to reduce competitiveness in this sector. The year 1969 ushered a major
change in the banking industry as 14 banks were nationalised and 1970’s and 1980’s marked
a phenomenal growth in the entire banking network as it started panning the entire country
which was mostly due to strong rate of increase in the savings rate in the country.
• A major change was to shift away from the earlier administered rates towards market
determined ones. On the lending side, the deregulation began in 1994 with emphasis on the
development of money, Government securities and foreign exchange markets..
• The deposit rates were also deregulated and banks were given the freedom to offer
different interest rates depending on the size and time of maturity of the deposits.
• Another major change was that interest rate on government securities became market
determined. The years 1992-2002 marked a significant increase in the banking business by
the Indian private banks which had a CAGR of around 28.75%.
• Liberalization also reduced the entry barriers by discarding the earlier license permit regime.
The new players mainly entered the market in early 1994 after the economic debacle
involving the balance of payment crisis was taken care of. One way the banking industry
adopted itself to the restructuring was through mergers and acquisitions.

10. Contd..
• The Indian Market is though a thriving one hence does attracts a large number of competitors.
With the GDP of the country estimated to grow at 6.5% both short-term and Medium-term the
banking industry in India has become attractive like never before.
• Compared to the past standards and the profitability standards in the international arena in
the banking industry India offers a highly profitable proposition and hence is very attractive for
new entrants.
• Rapid technological changes are making the entire game all the more competitive giving the
new comers an edge over the existing players as at the end of the day you are in the business
as long as you are effective and efficient.
• With new innovations taking place almost daily in the banking industry with Home Banking to
ATM the competitors are always outdo the other and this makes the entire industry all the
more competitive.
• With most of the regulatory barriers erased especially the entry barriers the capital and other
requirements it has become fairly easy to enter the industry though the exit barriers are still
blurry.
• Consumers of banking services are getting increasingly agile, enlightened, cost and quality
conscious. They are already forcing the pace of competition on price, product and quality
products.

11. Analysis of cost and profitability of a bank
The main costs that a bank incurs are as follows:-
• One of the main costs of the banks that have risen over the years is the costs of funding. Most
banks all around the globe rely on equity funding which is comparatively much costlier than
debt-funding.the cost of wholesale debt and deposits has gone up over the years and this
leads to an increase in the bank’s lending rate which affects its competitive position adversely
and the success of the bank depends on how efficiently its able to manage its funding. Public
sector unit banks are comparatively in a better position as they can avail funds at a much
cheaper cost compared to private banks.
• Another major costs that a bank incurs is retention of employees as with the increase in
competition and almost all the banks having a similar offering it becomes difficult for
banks to differentiate and one of the points where they can differentiate themselves is
the quality of services rendered and it to a large extent depends on the kind of human
resource they have and since due to the cut-throat competition its difficult to retain
employees especially people like relationship managers, portfolio managers the bank
has to walk an extra mile give them more perks and go out of their way to please them
and keep these employees satisfied.
• One of the major costs or losses that a bank incurs is due to NPA’s which are largely
found in public sector banks as these banks have government controlling stake
sometimes money is invested in priority sectors which are not very lucrative in terms of
the returns they generate and banks end up incurring huge losses and start functioning
poorly . Another reason is sometimes investing in priority sector is made compulsory for
a bank even for the private players and these investments most of the time prove to be
highly unprofitable for the business of the bank resulting in an unhealthy balance sheet.

12. Contd..
• Another major cost that a bank incurs is servicing costs. Whenever a customer makes a
transaction with the bank the bank incurs a cost and in case of customers do not prove to be
very good investors for the bank has to face a loss in terms of the revenues they earn from
that particular transaction to the cost incurred by them .
• Another major cost is the money spends on R&D, information technology, which the bank
requires to have to face the competition especially from the foreign banks that are
technologically much better off than the banks in India.
• Another cost is the operating costs that are incurred to keep the bank running like
maintenance of ATMs, security, cost incurred in transporting money etc
• One of the major costs is the opportunity costs on which the bank losses out due to
the fact that it has to maintain certain deposits with the RBI and the money is locked
in and cannot be used for any business purpose and the cash lying idle I the locker
thus produces no profits.

13. Change in the cost structure
Some of the costs which are expected to change in the future are :-
• The employee retention costs and customer retention costs will go up further with the
increase in competition.
• The R&D and the investments in the technology will be higher.
• The transaction costs are expected to reduce with the customers becoming more technology
savvy and technology making the entire process very cost effective and efficient.

14. Revenue of ICICI bank
Year Revenue
2008 78,741.07
2009
57,285.43
2010 62,213.91
2011 61,988.73

15. Market capitalization
During fiscal 2011, we continued our focus on increasing the proportion of low-cost
retail deposits in our funding base.
Our current and savings account (CASA) deposits as a percentage of total deposits
increased from 41.7% at March
31, 2010 to 45.1% at March 31, 2011.

16. Business Model of ICICI Bank
• ICICI Bank is well positioned to redefine the banking model by focusing on the
untapped potential in the profitable retail business segments and leveraging its
superior delivery capabilities and lower operating costs in the under-served corporate
banking business. ICICI Bank has adopted a three-pronged strategy for its corporate
banking division to tap better business opportunities. The bank at it inception
targeted large corporate with at least Rs 100 crore of business, and had put in place
a structure to serve them better. Further, it looked at non-fund based activities to
cater to them.
The bank covers 12 clusters
-Automotive
-Construction
-Pharmaceuticals
-Apparel
-Educational institutions
-Transporters
-Tenkashi Timbers
-Retail trade
-Diagnostic centre
-Gems n jeweler
-Software and IT services
The ICICI bank remittance approach
ICICI Bank’s key focus in the remittances space was towards building access to low
cost and convenient remittances, for both the remitters and the beneficiaries. The
value perceived by the overall remittance community was on following lines
• Increased and easier accessibility for the remitter and beneficiary

17. Business Model of ICICI Bank
ICICI bank’s strategy to capture retail potential
The core of the
strategy is the relentless focus on the
customer and the cross selling of the product
Strong
corporate
relationships
Achieving
leadership in
retail Brand
financial
services
technology
Strategy for corporate banking and structured finance
-Maximize value of client relationships.
-Leverage technology to enhance delivery capabilities.
-Proactive portfolio management
The aim is to provide state-of-the-art , low cost and efficient banking services , with a focus

18. Business Model of ICICI Bank
• Government Solution Group-Develops comprehensive banking relationships with all
central, state and local government entities.
• Corporate solution group-Reach the entire universe of current and potential clients
and offer tailor made solutions.
• Small and medium enterprise group-Develop comprehensive baking relationships
with small and medium sized enterprise leveraging corporate linkages. Focus on
agri-lending to help in compliance with priority sector norms.
• Aggressively pursue cross sell opportunities for all ICICI group products.
• Leverage expertise to facilitate loan origination and ensure sell down leading to
reduced concentration of risk , optimal risk return trade off.
• Infrastructure project groups- Create a balanced portfolio across subsectors
telecomm, power, transportation urban infrastructure. Focus on non-fund based
activities.
• Manufacturing projects group- Consolidation and modernization in core sectors
cement, steel, textiles and chemicals. Structured opportunities in certain emerging
sectors oil and gas, mining, retail, agri infrastructure.

19. Revenue analysis of ICICI Bank
 Investment valuation ratios
Mar’11 Mar’10 Mar’09 Mar’08
• Face Value 10 10 10 10
• Dividend Per Share 14 12 11 11
• Operating Profit Per Share (Rs 64.08 49.80 48.58 51.29
• Net Operating Profit Per Share (Rs) 281.04 293.74 343.59 354.71
• Free Reserves Per Share (Rs) 358.12 356.9 351.0 346.21
• Bonus in Equity Capital _ _ _
_

20. Revenue analysis of ICICI Bank(cont.)
Profitability Ratios
Mar’11 Mar’10 Mar’09 Mar’08
• Interest Spread 4.01 5.66 3.66 3.51
• Adjusted Cash Margin(%) 17.52 13.64 11.45 11.81
• Net Profit Margin 15.91 12.17 9.74 10.51
• Return on Long Term Fund(%) 42.97 44.72 56.72 62.34
• Return on Net Worth(%) 9.35 7.79 7.58 8.94
• Adjusted Return on Net Worth(%) 9.27 7.53 7.55 8.80
• Return on Assets Excluding Revaluations 478.31 463.01 444.94 417.64
• Return on Assets Including Revaluations 478.31 463.01 444.94 417.64

21. FINANCIAL ANALYSIS OF ICICI BANK
Here we will try to analyse the financial position of the bank with the help of various ratios.
PROFITABILTY RATIO
• These ratios as the name suggests tell us about the profitability of the business. As can be seen the interest expended over the
interest earned has shown a steady decline for ICICI bank over the past five years.

22. Contd..
• This goes on to show that the interest paid by the banks on various deposits are less than the
interest that the bank is earning over the five years from loans and other services provided
by the bank which goes on to show that the bank is in a very profitable position. Simply put
the inflow is more than the outflow. The other income by total income shows what
proportion of the income gets contributed to the earnings of the bank by other income and
we see that the proportion of other income has declined over the period which shows that
the bank is earning more from is primary activities like lending money than from other
service like say amount earned from a wire transfer. The operating expense ratio too has
gone down which basically shows that the day to day operating efficiency of the bank has
increased making it more profitable. The selling and distribution expenses has gone up as
compared to the 2010 and was the highest in 2008 and this goes on to show that selling
one’s product in the market is becoming difficult and perhaps the products are not appealing
to the consumers or has long lost its relevance.
• The net profit margins have increased over time and so has the ability of generating returns
over amount invested by the shareholders making it very attractive for the shareholders.
This we can say by referring to the return on net assets however the return on long term
investments has gone down showing that the growth projected by the return on net worth
might be short lived and a temporary figure and the bank’s prospects are not that great in
the long term.

23. Revenue analysis of ICICI Bank(cont.)
Profit And Loss Account Ratios
Mar’11 Mar’10 Mar’09 Mar’08
• Interest expended / Interest earned 65.29 68.44 73.09 76.28
• Other income / Total Income 0.02 0.92 0.86 0.17
• Operating expenses / Total income 0.17 29.05 26.22 26.0
• Selling distribution cost composition 0.94 0.72 1.74 4.43

24. Revenue analysis of ICICI Bank(cont.)
Balance Sheet Ratios
Mar’11 Mar’10 Mar’09 Mar’08
• Capital Adequacy Ratio 19.54 19.41 15.53 13.97
• Advances / Loans Funds(%) 64.96 58.57 69.86 72.67
Debt Coverage Ratios
• Credit Deposit Ratio 87.81 90.04 91.44 84.99
• Investment Deposit Ratio 59.77 53.28 46.35 42.68
• Cash Deposit Ratio 11.32 10.72 10.72 10.12
• Total Debt to Owners Fund 4.10 3.91 4.42 5.27
• Financial Charges Coverage Ratio 0.44 0.33 0.25 1.25
• Financial Charges Coverage Ratio Post Tax 1.34 1.26 1.20 1.20

25. Balance sheet ratios
These ratios basically tell us the strength of the balance-sheet of the bank. The capital
adequacy ratio basically tells us about the stability and efficiency of the bank. Capital
adequacy ratio is the ratio which determines the bank's capacity to meet the time liabilities
and other risks such as credit risk, operational risk, etc. In the simplest formulation, a
bank's capital is the "cushion" for potential losses, and protects the bank's depositors and
other lenders. Banking regulators in most countries define and monitor CAR to protect
depositors, thereby maintaining confidence in the banking system. As we can in case of
ICICI bank the ratio is way above the required and mandatory CAR set by the RBI which
happens to be 9 %.

26. Debt Coverage Ratio
• In corporate finance, DSCR refers to the amount of cash flow available to meet annual
interest and principal payments on debt, including sinking fund payments.
• In personal finance, DSCR refers to a ratio used by bank loan officers in determining debt
servicing ability.
• A DSCR of less than 1 would mean a negative cash flow. A DSCR of less than 1, say .95,
would mean that there is only enough net operating income to cover 95% of annual debt
payments. Typically, most commercial banks require the ratio of 1.15 - 1.35 times (net
operating income or NOI / annual debt service) to ensure cash flow sufficient to cover loan
payments is available on an ongoing basis.

27. Revenue analysis of ICICI Bank(cont.)
Leverage Ratios
Mar’11 Mar’10 Mar’09 Mar’08
• Current Ratio 0.11 0.14 0.13 0.11
• Quick Ratio 15.86 14.70 5.94 6.42
Cash Flow Indicator Ratios
• Dividend Payout Ratio Net Profit 35.23 37.31 36.60 33.12
• Dividend Payout Ratio Cash Profit 31.76 32.33 31.00 29.08
• Earning Retention Ratio 64.49 61.40 63.23 66.35
• Cash Earning Retention Ratio 68.01 66.70 68.87 70.51
• Adjusted Cash Flow Times 39.77 44.79 49.41 52.34

28. Leverage ratios
These are basically the liquidity ratios which reflect the ability of the bank to pay off its current
obligations as and when they become due. Current ratio also known as the working capital ratio
has been fluctuating and is far less than the ideal 2:1 that is considered ideal. This indicates that
the bank may be trading beyond its capacity and the funds and there might not be sufficient
funds to pay off the liabilities. The quick ratio measures the liquidity of the company more
rigorously. The ratio has been increasing over time and that shows the real time liquidity position
of the bank has improved and the low current ratio might be because of inventories or prepaid
expenses and this goes on to show that some of the products as mentioned before have lost
their relevance in the market and are not selling well.

29. Investment valuation ratios
Basically these ratios show the investment potential that the bank has. The dividend shows a
steady increase which goes on to show that the bank has a steady dividend policy and hence
is attractive to shareholders. The operating profit has gone up per share and this shows that
the operations of the bank has become more efficient and is leading to value creation for the
shareholders.

30. Industry analysis- Porter’s 5 forces model
Threat of new entrants- Low
• It is based on the entry barriers in the market. Both potential and existing competitors
influence average industry profitability
• Starting a bank in India is comparatively difficult as compared to other industries.
• If a new bank is introduces it might pose to be a threat to ICICI bank which mostly
caters to the niche segment.
Competitive rivalry- High
• In India especially in rural areas where banking services are still not accessible the traditional
channels still play a very important role and with inclusive financing becoming the buzzword
due to the current policies of Indian Government.
• because though the need for credit is very high in the rural areas the people find it more
convenient to borrow form a money lender due to less paperwork
• takes much less time and effort on their part to execute the entire transaction
• In the urban areas too the competition is very high mainly due to the presence of both public
and private players with similar offerings.
• The public players such as SBI are in a much better position because they have been around
for a very long time in the financial services space and therefore enjoy greater public
confidence.

31. Contd..
Banks lure customers of other banks by-
• Offering lower financing preferred rates and investment services. The banking sector is in a
race to see who can offer both the best and fastest services.
• Quality of service provided especially to the HNI clients. Most of the private sector and foreign
banks have relationship managers for this purpose and they are very prized HR resources for
the bank as they develop a relationship on a very personal level with the clients by advising
then to invest them in various stocks and hence if they are acquired by other banks the clients
any follow and therefore the banks compete by acquiring these key resources which help them
improve their quality of services.
• Bargaining powers of the suppliers- MEDIUM
• The suppliers of capital do not pose a big threat, but the threat of suppliers taking away the
human resource. If a talented individual is working in a smaller regional bank, there is the
chance that person will be enticed away by bigger banks, investment firms, etc. However the
rates offered by the banks for saving accounts and fixed deposits do play a big role in
determining the inflow of capital in the banks.

32. • Bargaining powers of the buyers- HIGH
With the presence of large number of players in the banking industry the person availing the
financial services of the banks can easily switch to some other bank depending on the
efficiency of services offered by each bank. Financial institutions – by offering better
exchange rates, more services, and exposure to foreign capital markets -work extremely hard
to get high-margin corporate clients. Options in the Auto Finance Sector also give the
customers more power to decide upon the kind of financing. Introduction of specialized
products for Women and Students etc also show that the buyer power is high in this
Industry.
Substitutes - MEDIUM
• The main substitutes of a bank offering financial services in the rural areas would be
money lenders, Regional Rural banks, Non- banking financial corporations. In the
urban areas the main competitors are investment firms, brokerage firms, brokers, etc.
However most of these fail to match the sheer economies of scale, quality of services
that a bank can provide.

33. Icici bank-segmentation
Icici bank, a private sector banking company is engaged in providing a range of banking products
and financial services-
• Investment banking
• Commercial banking
• Retail banking
• Asset Management
• Private Banking
• Mortgages
• Credit card
• Others
Business Segmentation-
• Retail Banking- Retail assets business, rural-micro banking
• Wholesale banking- Corporate banking business, banking services, treasury,
structured finance
• Project finance- Infrastructure, oil & gas, manufacturing and shipping sectors
• International business and assets management
• Corporate centre- Investor relations, risk management, corporate branding

34. Segmental analysis- ICICI bank
• Revenue has increased to more than 3 times from 2006 to 2010 and is still growing at
acceptable pace, however pace has gone down in 2010 There is negative growth in terms of
domestic revenues and needs to take care upon domestic industry. BoR acquisition can help
geographical revenue.
• In last years share of retail banking is shrinking due to inclusion of various other segments.
Venture fund management has added another revenue potential. Total banking revenue has
always ahead of other non banking revenue taking together(all insurance, Venture fund,
others).
• Retail band wholesale banking is growth segment and grown about 77% in 2010. Treasury
and investment banking business is also increasing at the pace and due to growing market it
is expected to grow in the same manner.
• Life insurance recovered from the losses and earned profits. Contribution of wholesale
banking is going down. Retail banking earned negative figure which can be a concern as it
form major par of revenues. Treasury and investment banking can be a star product for the
future. Segmental Contribution in PBT.
• Negative profit of retail banking are very much disastrous as it is major revenue base.
Wholesale banking growth continued and forms major revenues which is strong point for the
company. General insurance growth is just base effect but growth chances are high. Venture
fund growth in PBT is less then in revenues which is around 55%Segmental Growth in PBT.
• Segment Focus: ICICI is focusing on SME under wholesale segment. Strategies & Initiatives:
SME enterprises CEO Knowledge Series- a platform to mentor and assist entrepreneurs.SME
Enterprises Toolkit- an online business & advisory resource for SME Emerging India Awards-
SME recognition platform

35. Contd..
• ICICI is also focusing on Rural Banking under retail segment. Strategies & Initiatives: Offering
micro-credit through micro financing institutions(MFI’s),micro-insurance and micro-investment
products. Financial inclusion through business correspondents, farmer financing and
integration of agri-value chain.
• Financials and Trends: - ICICI Annual Reports 08, 09, 10Source:- ICICI Annual Reports 08, 09,
10Decline in treasury and other banking venture due to economic slowdown.
• Financials and Trends: ICICI Annual Reports 08, 09, 10Foreign- emphasis was more on retail
segment as ICICI strategy was to build more retail deposit franchise. Also was seeking to build
stable wholesale funding. Domestic- emphasis was given to small and medium scale
enterprises as it adopted cluster financing approach to fund small enterprises. In retail loan
segment emphasis was given more to Home loan and vehicle loan.

36. • Business Description and segmentation- ICICI Bank Limited, a private sector banking
company engaged in providing a range of banking products and financial services Investment
Banking Commercial Banking Retail Banking Private Banking Asset Management Mortgages
Credit Cards Others Business Segmentation Retail Banking- Retail assets business, Rural
micro-banking.
• Wholesale Banking- Corporate Banking business, Banking services(for government, large
corporate), Treasury, Structured finance Project Finance- Infrastructure, Oil & Gas,
Manufacturing and Shipping sectors International Business & Special Assets Management-
International operations Corporate Centre- Investor relations, Risk management, Corporate
branding

37. Rural banking
• ICICI Bank (IBN) is eyeing rural India for increasing exposure in view of the huge demand for
banking in the rural sector.
• ICICI Bank has set up 8,000 “touch points” across the country for penetrating rural pockets
and is developing low-priced ATMs. The bank has also disbursed Rs 2,500 crore towards rural
sector financing.
• The Bank is expecting good rural credit to off take in the current year and has also rolled out
"Ashan" ATMs for the urban and semi-urban markets in India.
• This is certainly a very positive move from ICICI Bank. Until now, ICICI was more focused on
the retail banking and home loans segments in urban areas.
• ICICI has been very successful in these areas; in the home loan segment, ICICI is the number
one private sector bank and in retail, they have a good amount of market share too.
• But India is a country of villages and more than 70% of the population still lives in rural areas.
The demand for credit in the rural markets was Rs 1.5 lakh crore, while the supply was only
Rs 4,000 crore. Until now, the rural banking segment was controlled by government owned
SBI, but now things are changing.
• Rural India is developing very fast-- the growing economy is leading to increase in business
activities, which in turn has people in villages wanting many more services from a bank than
simply depositing their money.

38. Private banking
• ICICI Bank is extending its retail focus to the higher end of the market. However, the bank is a
latecomer in this segment. A host of foreign banks like BNP Paribas, ABN Amro, Deustche
Bank, Citi, HSBC, Merrill Lynch have been in the segment for the past few years and hence
ICICI Bank will have to face competition from them.
• India has seen an increase in the number of millionaires (those with liquid assets of over Rs
4.3 crore) which is estimated to be at over 1 lakh. As ICICI Bank officials say, only around 20%
of the market is with the bigger players.
• The term, private banking, refers to the personalized service provided to elite customers as
against mass retail banking. Private banking is more people and process-driven than capital
intensive.
• ICICI Bank has been focusing more on the middle and the upper ends of the markets in
recent times. It recently doubled the minimum average balance for its savings accounts from
Rs 5,000 earlier to Rs 10,000.

39. Peer Group Analysis
• ICICI bank standing in its peer group Excellent. Market cap should have exact date. Also,
please understand the significance of these numbers. You should know what is being
presented.
• Database Ratio represent a strong foundation and aggressive growth strategy for ICICI.
• ICICI is still out performed by Axis bank in most margins.
• ICICI has high percentage of non-performing assets in its peers. For ICICI, CAR is higher than
its closest competitors; Axis and HDFC bank.

40. Segmentation- Axis Bank
 Personal banking
• Accounts-
Term deposit
Fixed deposit
Recurring deposit
 Cards
 Corporate banking
• Normal Current account
• Trust/ NGO savings
• Services-
• Private equity, M& A
• Advisory services
• Capital market funding
• E- broking
 Retail banking
Loans and advanes
Personal loans
Housing loans
Cards
Consumer durables
Auto loans

41. Segmentation strategy: Axis
Bank
• Segmentation strategy Demographics variables Location Metros & divisional cities Occupation
Business persons Salaried class (both Govt. and private) Working woman Age Senior citizens
Minor
• Segmentation strategy Psychographic variables Lifestyle The people who believes in modern
banking with higher set of services i.e. Internet banking (I contact, mobile refill, travel currency
card etc.).
• Targeting strategy Target market Corporate banking market: This market target the industries
and fulfil their financial needs. Capital market: This segment is targeted on the long term needs
of the individual as well as of industries. Retail banking market: This segment is for the retail
investor and provide them short term financial credit for their personal, household needs.
• Targeting strategy Business banking sectors with % of income * Housing finance companies &
NBFCs.
• Targeting strategy Selective specialization strategy Here the bank selected a number of
segments, each objectively attractive & appropriate. There may be little or low synergy among
the segment but each segment proves to be worth full for it. If we take the example of cards
then Axis bank have separate set of credit cards, each targeted at different set of people i.e.
segment and each one has its own importance for the bank.
• Targeting strategy Gold and Gold plus card Silver and silver plus card Secured cards M1 M2 M3
• Positioning strategy Axis bank has positioned itself as a bank which gives higher standard of
services through product innovation for the diverse need of individual & corporate clients. So
they want to highlight following points in their positioning statement: Customer centric Service
oriented Product innovation

42. Contd..
SMEs are high potential segment for Axis
Bank
• Axis Bank is eyeing to grow loans to the SME sector by 25 percent per annum over the next
two years, notwithstanding concerns over their asset quality and a doubtful macroeconomic
situation.
• Axis bank will maintain the growth and will grow SME book by 20 to 25 percent this year and
the year ahead. Lending to SME constituted 15 percent of the bank's overall loan book, which
stood at Rs 1.40 lakh crore as on September 30.
• Concerns were expressed by bankers in the recent past about the impact on asset
quality in SMEs (small and medium enterprises). SMEs have been hit by the Reserve
Bank's tight monetary policy. Besides, the slowdown in global markets is also expected
to hit their exports. Admitting that higher interest rates were adversely affecting the
SME sector, Adsul said the bank itself was not experiencing any stress from its clients,
noted the report.
• Commercial realty, export-led companies and textiles are among the segments within
the SME space which the city-headquartered bank will be wary about, he said, adding
that engineering, infrastructure and pharmaceuticals are the spaces that are doing well.
• Axis Bank defines the SME companies as the ones having a turnover of less than Rs
150 crore. The SME portfolio contributes 35 percent of the bank's overall priority sector
lending requirements as classified by the RBI, he said. Adsul said the bank holds a five
percent market share in the overall SME segment, which gives it enough scope to
grow. Furthermore, Axis Bank serves the segment through 32 SME Centres and six
SME cells, added the report.

43. Axis Bank
• The Bank’s total income increased 26.97% to reach `19,786.94 crores during 2010-11,
compared to `15,583.80 crores last year.
• Operating revenue during this period increased 25.08% to `11,195.12 crores while
operating profit increased by 22.42% to `6,415.69 crores.
• The growth in revenues may be attributed to the performance of the Bank’s core income
streams: net interest income (NII), fee and other income.
• NII increased by 31.14% to `6,562.99 crores from `5,004.49 crores last year, while fee and
other income increased by 17.39% to `4,632.13 crores from `3,945.78 crores last year.
• NII increased by 31.14% as a result of healthy growth of both assets and low-cost Current
Account and Savings Bank (CASA) deposits, on a daily average basis.
• During the year, total earning assets, on a daily average basis, rose 34.70% to `179,573
crores from `133,309 crores last year.
• A 32.81% growth of low-cost CASA deposits, on a daily average basis, from `44,839 crores
last year to `59,551 crores, helped the Bank contain funding costs, which had risen in the last
quarter of the year due to the hardening of interest rates on term deposits

44. Axis Bank

45. Ratio of axis
2011 2010 2009 2008 2007
Interest
Income / 9.14 9.38 10.53 9.57 8.88
Total Funds
Net Interest
Income / 5.08 5.34 4.98 4.74 4.01
Total Funds
Non Interest
Income / 0.17 0.12 0.06 0.02 0.03
Total Funds
Interest
Expended / 4.06 4.04 5.56 4.83 4.87
Total Funds
Operating
Expense / 2.57 2.94 2.64 2.51 2.07
Total Funds
Profit Before
Provisions / 2.54 2.38 2.25 2.07 1.79
Total Funds

46. Ratio of axis
2011 2010 2009 2008 2007
Net Profit /
1.60 1.53 1.41 1.17 1.07
Total Funds
Loans
0.16 0.17 0.19 0.18 0.18
Turnover
Total
Income /
Capital 9.30 9.51 10.60 9.59 8.92
Employed(
%)
Interest
Expended /
Capital 4.06 4.04 5.56 4.83 4.87
Employed(
%)
Total Assets
Turnover 0.09 0.09 0.11 0.10 0.09
Ratios

47. Ratio of axis
2011 2010 2009 2008 2007
Interest
Expended /
56.69 57.00 65.98 63.09 65.64
Interest
Earned
Other
Income / 1.78 1.30 0.60 0.16 0.39
Total Income
Current Ratio 0.02 0.03 0.03 0.03 0.03
Quick Ratio 19.60 19.19 9.52 9.23 7.39
Asset
Turnover 5.65 7.31 7.78 6.32 4.97
Ratio

48. Segmentation-HDFC bank
• The different segments of HDFC bank are
• Personal banking
• Retail banking
• NRI banking
• Wholesale banking

49. Retail Banking
• HDFC Bank caters to various customer segments with a wide range of products and services.
• The Bank is a ‘one stop shop’ financial services provider of various deposit products, of retail
loans (auto loans, personal loans, commercial vehicle loans, mortgages, business banking, loan
against gold jewellery etc.), credit cards, debit cards, depository (custody services), investment
advisory, bill payments and several transactional services.
• Apart from its own products, the Bank distributes third party financial products such as mutual
funds and life and general insurance.
• The growth in your Bank’s retail banking business was robust during the financial year ended
March 31, 2011.
• The Bank’s total retail deposits grew by over 23.3% to - 139,961 crore in the financial year
ended March 31, 2011, driven by retail savings balances which grew much faster at 28.0%
during the same period.
• The Bank’s retail assets grew by 26.8% to - 80,113 crore during the financial year ended March
31, 2011 driven primarily by a growth in mortgages, business banking, commercial vehicle
loans and auto loans.

50. Branch Banking
• Bank expanded its distribution network from 1,725 branches in 779 cities as on March 31,
2010 to 1,986 branches in 996 Indian cities on March 31, 2011.
• The Bank’s ATMs increased from 4,232 to 5,471 during the same period. Your Bank’s branch
network is deeply entrenched across the country with significant density in areas conducive
to the growth of its businesses.
• The Bank’s focus on semi-urban and under-banked markets continued, with over 70% of the
Bank’s branches now outside the top nine Indian cities. The Bank’s customer base grew in
line with the growth in its network and increased product penetration initiatives, this
currently stands at 21.9 million customers.
• The average savings balance per account which is a good indicator of the strength of the
Bank’s retail liability franchise grew over 17%. The Bank continues to provide unique
products and services with customer centricity a key objective.
• In order to provide its customers increased choices, flexibility and convenience the Bank
continued to make significant headway in its multi channel servicing strategy.
• Your Bank offered its customers the use of ATMs, internet, phone and mobile banking in
addition to its expanded branch network to serve their banking needs.
• The increase in the Bank’s debit card base this year coupled with a growth in its ATM
network translated to an increase in ATM transactions by 14%. The Bank also made
strong inroads in its internet banking channel with around 60% of its registered
customers now using net banking facilities for their banking requirements. Your bank
now offers phone banking in 996 locations in addition to giving its customers the
convenience of accessing their bank accounts over their mobile phones. The success
of the Bank’s multi-channel strategy is evidenced in the fact that over 80% of
customer initiated transactions are serviced through the non-branch channels.

51. Retail Assets
• HDFC Bank continued to grow at a healthy pace in almost all the retail loan products that it
offers and further consolidated its position amongst the top retail lenders in India.
• The Bank grew its retail asset portfolio in a well balanced manner focusing on both returns as
well as risk.
• While the Bank’s auto finance business remained a key business driver for its retail asset
portfolio, other retail loan products exhibited robust growth rates and good asset quality.
• The Bank continued its focus on internal customers for its credit cards portfolio. Overall
credit cards remained a profitable business for your Bank with over 5 million cards in force as
at March 2011.
• As part of its strategy to drive usage of its credit cards the Bank also has a significant
presence in the ‘merchant acquiring’ business with the total number of point-of-sale (POS)
terminals installed at over 120,000.

52. Contd..
• In addition to the above products the Bank does home loans in conjunction with HDFC
Limited. Under this arrangement the Bank sells loans provided by HDFC Limited through its
branches.
• HDFC Limited approves and disburses the loans, which are booked in their books, with the
Bank receiving a sourcing fee for these loans.
• HDFC Limited offers the Bank an option to purchase up to 70% of the fully disbursed home
loans sourced under this arrangement through either the issue of mortgage backed pass
through certificates (PTCs) or by a direct assignment of loans; the balance is retained by
HDFC Limited.
• Both the PTCs and the loans thus assigned are credit enhanced by HDFC Limited upto a AAA
level. The Bank purchases these loans at the underlying home loan yields less a fee paid to
HDFC Limited for the administration and servicing of the loans.
• Bank originated approximately an average Rs. 700 crore of mortgages every month in the
financial year ended March 31, 2011, an increase from the Rs. 550 crore per month that it
originated in the previous year. During the year the Bank also purchased from HDFC Ltd.
under the “loan assignment” route approximately Rs. 4,300 crores of AAA credit enhanced
home loans most of which qualified as priority sector advances.

53. Contd..
• HDFC Bank also distributes life, general insurance and mutual fund products through its tie-
ups with insurance companies and mutual fund houses.
• The income from these businesses continued to demonstrate robust growth largely due to
an expanded branch network and the increased penetration of the Bank’s managed portfolio
despite the fact that during the year there were regulatory changes which in some cases
impacted the commission paid by the manufacturers of these products to the Bank.
• The success in the distribution of the above products has been demonstrated with the
growth in the Bank’s fee income. Third party distribution income contributes approximately
25% of total fee income. The Bank’s data warehouse, Customer Relationship Management
(CRM) and analytics solutions have helped it target existing and potential customers in a cost
effective manner and offer them products appropriate to their profile and needs.
• Apart from reducing costs of acquisition, this has also led to deepening of customer
relationships and greater efficiency in fraud control and collections resulting in lower credit
losses. The Bank is committed to investing in advanced technology in this area which will
provide cutting edge in the Bank’s product and service offerings .

54. Wholesale Banking
• The Bank provides its corporate and institutional clients a wide range of commercial and
transactional banking products, backed by high quality service and relationship
management.
• The Bank’s commercial banking business covers not only the top end of the corporate sector
but also the emerging corporate segments and some small and medium enterprises (SMEs).
• The Bank has a number of business groups catering to various segments of its wholesale
banking customers with a wide range of banking services covering their working capital, term
finance, trade services, cash management, foreign exchange and electronic banking
requirements. The business from this segment registered a healthy growth in the financial
year ended March 31, 2011.
• The Bank’s wholesale deposits grew by around 27.4%, while wholesale advances showed a
growth of over 26.7% both of which were significantly faster than the growth in the system
during the same period. Your Bank provides its customers both working capital and term
financing.
• The Bank witnessed an increase in the proportion of its medium tenor term lending,
however working capital loans and short tenor term loans retained a large share of its
wholesale advances. While the duration of the Bank’s term loans largely remained small to
medium term, the Bank did witness an increase in its longer duration term loans, and project
lending including loans to the infrastructure segment.

55. Contd..
• During the financial year ended March 31, 2011, growth in the wholesale banking business
continued to be driven by new customer acquisition and higher cross-sell with a focus on
optimizing yields and increasing product penetration. Bank’s cash management and vendor
& distributor (supply chain) finance products continued to be an important contributor to
growth in the corporate banking business.
• It further consolidated its position as a leading player in the cash management business
(covering all outstation collection, disbursement and electronic fund transfer products across
the Bank’s various customer segments) with volumes growing to over Rs. 30 trillion.
• The Bank also strengthened its market leadership in cash settlement services for major stock
exchanges and commodity exchanges in the country. The Bank met the overall priority sector
lending requirement of 40% of net bank credit and also strived for healthy growth in the sub-
targets such as weaker sections, direct agriculture and the micro and SME segments.
• The Bank’s financial institutions and government business group (FIG) offers commercial and
transaction banking products to financial institutions, mutual funds, public sector
undertakings, central and state government departments. The main focus for this segment
remained offering various deposit and transaction banking products to this segment besides
deepening these relationships by offering funded, non-funded treasury and foreign
exchange products.

56. International Operations
• The Bank has a wholesale banking branch in Bahrain, a branch in Hong Kong and two
representative offices in UAE and Kenya. The branches offer the Bank’s suite of banking
services including treasury and trade finance products to its corporate clients. Your Bank has
built up an asset book over USD 1 billion through its overseas branches. The Bank offers
wealth management products, remittance facilities and markets deposits to the non-resident
Indian community from its representative offices.

57. Treasury
• The treasury group is responsible for compliance with reserve requirements and
management of liquidity and interest rate risk on the Bank’s balance sheet. On the foreign
exchange and derivatives front, revenues are driven primarily by spreads on customer
transactions based on trade flows and customers’ demonstrated hedging needs. During the
financial year ended March 31, 2011, revenues from foreign exchange and derivative
transactions grew by 26.2% to Rs. 786.3 crore.
• These revenues were distributed across large corporate, emerging corporate, business
banking and retail customer segments for plain vanilla foreign exchange products and across
primarily large corporate and emerging corporate segments for derivatives.
• The Bank offers Indian rupee and foreign exchange derivative products to its customers, who
use them to hedge their market risks. The Bank enters into foreign exchange and derivative
deals with counterparties after it has set up appropriate counterparty credit limits based on
its evaluation of the ability of the counterparty to meet its obligations in the event of
crystallization of the exposure.
• Appropriate credit covenants may be stipulated where required as trigger events to call for
collaterals or terminate a transaction and contain the risk. Where the Bank enters into
foreign currency derivative contracts with its customers it lays them off in the inter-bank
market on a matched basis. For such foreign currency derivatives, the Bank does not have
any open positions or assume any market risks but carries only the counterparty credit risk
(where the customer has crystallized payables or mark-to-market losses).
• The Bank also deals in Indian rupee derivatives on its own account including for the purpose
of its own balance sheet risk management. The Bank recognizes changes in the market value
of all rupee derivative instruments (other than those designated as hedges) in the profit and
loss account in the period of change. Rupee derivative contracts classified as hedge are
recorded on an accrual basis.

58. Risk Management and Portfolio
Quality
• Taking on various types of risk is integral to the banking business. Sound risk management and balancing risk-reward trade-
offs are critical to a bank’s success.
• Business and revenue growth have therefore to be weighed in the context of the risks implicit in the Bank’s business
strategy. Of the various types of risks your Bank is exposed to, the most important are credit risk, market risk (which
includes liquidity risk and price risk) and operational risk.
• The identification, measurement, monitoring and management of risks accordingly remain a key focus area for the Bank.
For credit risk, distinct policies and processes are in place for the retail and wholesale businesses. In the retail loan
businesses, the credit cycle is managed through appropriate front-end credit, operational and collection processes. For
each product, programs defining customer segments, underwriting standards, security structure etc., are specified to
ensure consistency of credit buying patterns.
• Given the granularity of individual exposures, retail credit risk is monitored largely on a portfolio basis, across various
products and customer segments. During the financial year ended March 31, 2008 the Bank obtained an ISO 9001:2008
certification of its retail asset underwriting. Last year, the second surveillance audit was conducted successfully at key
locations and the certification was confirmed with no instances of non-conformity.
• For wholesale credit exposures, management of credit risk is done through target market definition, appropriate credit
approval processes, ongoing post-disbursement monitoring and remedial management procedures. Overall portfolio
diversification and reviews also facilitate mitigation and management.
• The Risk Policy and Monitoring Committee of the Board monitors the Bank’s risk management policies and procedures, vets
treasury risk limits before they are considered by the Board, and reviews portfolio composition and impaired credits.

59. Kotak Mahindra Bank
• The Agri business rode on an impressive growth in the tractor loans, commodity funding which doubled in portfolio
size and an impressive growth in the working capital facilities to agro-processing sector.
• Delinquency levels in this portfolio have also been at all time lows and are even better than some of the other
urban oriented advances indicating the financial strength of clients associated with agriculture who are riding the
commodity price boom.
• The Agri business has also become the corner stone for your Banks targets for meeting financial inclusion and
lending to the weaker sections of the society such as small and marginal farmers, village artisans and other
socially deprived sectors identified by the government.
• These advances now have crossed a level of 8% of your Banks total advances. Your Bank is in the process
identifying more target segments in this sector to reach out to .

60. Contd..
• In the Home Finance business
• while there was strong growth in the first half of the year, the second half of the
year saw stabilisation and slight drop in demand from customers. Your Bank
introduced innovative new products during the year such as part tenure fixed home
loans and loan against property.
• Bank branches continued to play an important part and evolved into a stable
contributor month on month. There was an increased focus on existing Bank
customers and their contribution among the secured asset products went up.
• The Personal Finance business
• saw good growth and established your Bank as one of the leading lenders of
unsecured loans in the market. High-ticket products continued to be the focus and
were the biggest contributor to the overall volumes.
• The Personal Finance business also added new products to their existing bouquet
of financial services for businessmen. Working capital products in Rs. 50 lacs to
Rs. 1.5 crore range (both fund based as well as non-fund based) were some of the
new offerings .

61. Contd..
• Bank resolved several NPA accounts pertaining to stressed assets acquisition.
• Supreme Court upheld the NPA assignment between banks and other financial institutions. This landmark judgment will
further help in resolving several NPA accounts, which were litigated in several courts for the past few years.
• The NPA portfolio sale by banks continued to be sluggish and the serious pricing mismatch between the buyers and sellers
continued, this year as well. Bank continued to invest in large single asset transactions, with good prospects of turnaround
in stressed companies.
• Further, Bank has diversified in buying large retail NPA loans from other banks. During the year, your Bank saw a robust
growth in its overall advances portfolio.
• This was primarily driven by the overall growth of the corporate sector, spurred by strong domestic consumption demand
for their products post the recessionary period.
• A robust NPA management practice and strong internal controls, aided by a strong economic growth, has led to a reduction
in your Banks gross/net NPAs.

62. Treasury
• The Bank has an active proprietary desk trading in all products such as Fixed Income, Money Markets, Derivatives,
Foreign Exchange and Bullion. The Treasury plays an important role in balance sheet management and
implementation of Funds Transfer Price between various business units. In the area of Debt Capital Markets (DCM)
your Bank offered the following products: syndication of loans, bonds, mezzanine financing, promoter funding and
acquisition financing and securitisation.
• During the year, your Banks Treasury started Correspondent Banking Division to build and leverage on relationships
with offshore banks for improving quality and international reach for its customers. Your Banks credit card business
has issued 1.5 lac cards and is in its third year of operations. The card design and product benefits have received
overwhelming response from customers.
• The customer spends across all variants of cards have been amongst the top three in industry. The premium range of
our products – VISA Platinum and VISA Signature have driven the spends growth in the portfolio and it contributes to
34% of the spends while accounting for 12% of customer base. This has reaffirmed the customer acceptability of the
product.
• Credit card business clocked Rs. 600 crore of total spends in the year with a book size of Rs. 300 crore. Industry credit
cards spends has shown sign of growth after last years recessionary economic conditions.

63. Contd..
• Your Bank entered into a strategic arrangement with PVR Cinemas, one of the elite name in entertainment industry, to
distribute credit card products aimed at up-market customers.
• This partnership opens up the opportunity to tap new customer segment hitherto untapped by your Bank. Your Banks
technology team concentrated on innovation to provide new products and conveniences to the customers.
• This ranged from mobile to mobile payments (IMPs) to providing ATMs at remote locations on an air card. System upgrades
for continuous improvement in customer experience were a focus.
• The excellence of the CRM and Call Center which were rolled out across the Kotak Group, were recognized by awards from
the Indian Banking Association and Asian Bankers Technology Summit respectively.
• In preparation of the planned Core Banking upgrade, the technology foundation has been enhanced. Service Oriented
Architecture was introduced with the use of a world class product for system integration.
• Standard frameworks for digitization and internal development expedite deployment of new systems.

64. Ratio of kotak
2011 2010 2009 2008 2007
Net Profit /
1.85 1.70 0.97 1.22 0.94
Total Funds
Loans
0.19 0.20 0.20 0.21 0.18
Turnover
Total
Income /
Capital 10.78 11.13 11.59 11.75 10.62
Employed(%
)
Interest
Expended /
Capital 4.66 4.23 5.42 5.43 4.65
Employed(%
)
Total Assets
Turnover 0.11 0.11 0.11 0.12 0.11
Ratios

65. Ratios of kotak
2011 2010 2009 2008 2007
Current
0.05 0.05 0.09 0.06 0.05
Ratio
Quick Ratio 10.86 8.46 5.91 5.83 5.74
Dividend
Payout Ratio 5.04 5.28 10.07 10.29 18.91
Net Profit
Dividend
Payout Ratio 4.50 4.55 8.04 8.77 15.18
Cash Profit
Asset
Turnover 5.70 4.90 7.08 7.21 5.82
Ratio

66. Ratio of kotak
2011 2010 2009 2008 2007
Earnings
11.10 16.12 7.99 8.53
Per Share
Book Value 92.74 130.40 112.98 104.26

67. Opportunities spectrum for banks
• Low penetration of consumer finance at 13% of GDP
• Supported by structural drivers of rising income levels and growing consuming class
• Robust industrial and infrastructure investment pipeline estimated at about US$ 700 billion
• Internalisation of Indian industry
• Potential for acquisition and trade finance
• Vast Indian diaspora spanning the globe
• Potential for credit and liability products and transaction services
• Low penetration of insurance and asset management

68. ICICI bank- A look at its bright
future
• ICICI Bank has a fund raising target of $13 billion in the next 12 months point to a move to
work around the yet-to-be finalised RBI guidelines on holding companies. Before the central
bank initiated a discussion on the holding company structure, ICICI Bank had received formal
approval from the FIPB to create a holding company, ICCI Financial Services, which would
hold stakes in its three subsidiaries — the asset management firm and the two insurance
companies. It could sell as much as 25% stake in this holding company and would be able to
fund its future activities. Based on bids received from Goldman Sachs, the company was
valued at around $10 billion.
• Now, with the holding company structure in abeyance, the bank is looking overseas
for funding and will not compromise on its plans. Strategically, the opportunities that
the Indian financial services sector holds, requires quick action
• This is a once-in-a-life time opportunity to grab market share and call the shots.
Earnings could grow as fast as 30% on a compounded basis for the next three years,
reckon analysts.

69. Contd..
• And ICICI Bank does not want to lose this opportunity. It intends to target all the segments in
the retail finance space, which currently contributes around 65% of its advances. The focus
would be especially high on rural India. Meanwhile, it has taken an aggressive stance on
international loans, from the beginning of the year. The bank participated in 79% of
outbound mergers and acquisitions (M&A) in terms of value of the deals against 53% in
2006.
• The average loan size has also increased to $410 million this year from $225 million
in 2006. Analysts believe that this segment will contribute to 25% of ICICI’s total
advances by March 2010, rising from 16% for FY07.
• Trade experts believe that after recovering from the aftermath of the beating on fears
that ICICI Bank had derivatives exposure during the sub-prime crisis, the stock has
done well to make a comeback. While it may still take some hit on the basis of
nominal mark-to-market pricing, the extent would not be significant. Its successful
raising of $2 billion overseas also goes down well with the investing community

70. Contd..
• With a rate cut expected by the beginning of the next year, analysts believe that despite a
low current account savings account (CASA at 23%), its higher share of short term deposits
(45%) and its strong capitalization, would see it gain. Concerns over its asset quality, which is
steadily deteriorating, would also improve as rates ease. Overall, the bank is gearing to get
into action to take on competition, especially ahead of 2009, when the banking sector is
thrown open to foreign players.

71. Swot analysis of Icici bank
• Strengths
2) Online Services: ICICI Bank provides online services of all it’sbanking facilities. It also provides
D-Mart account facilities on-line, soa person can access his account from anywhere he is.[D-
Mart is a dematerialized account opened by a salaried personfor purchase & sale of shares of
different companies.
3) Advanced Infrastructure: Branches of ICICI Bank are wellequipped with advanced technology
to provide the customers withtaster banking services. All the computerized machines are
located insuitable manner & are very useful to the customers and staff of the bank
4) Friendly Staff: The staff of ICICI Bank in all branches is veryfriendly & help the customers in all
cases. They provide faster services along with bonding & personal relationship with
thecustomers.
5) 12 hrs. Banking services: Compared to other bank ICICI bankprovides long hrs. of services i.e.
8-8 services to the customers. Thisservice is one of it’s kind & is very helpful for the customers
who are n urgent need of money.
6) Other Facilities to the Customers & Employees: ICICI Bank also provides other facilities
likedrinking water facilities, proper sitting arrangements to the customers. And there are also
proper Ventilation& sanitary facilities for the employees of the bank.
7) Late night ATM services: ICICI bank provides late night ATM services to the customers. ATM
centers of ICICI bank works ven after 11:00pm. at night in certain branches.

72. Weakness
• High Bank Service Charges: ICICI bank charges highly to customers for the services provided by them when compared to
other bank & that is why it is only in the reach of higher class of society.
• Less Credit Period: ICICI bank provides credit facilities but only up to limited period. Even when the credit period is not over
it sends reminder letters to the customers which may annoy them.
Opportunities
• 1) Bank ±Insurance services: The bank should also provide insurance services. That means thebank can have a
tie-up with a insurance company. The bank will advertise & promote the different policies introduced by the
insurance company & convince their customers to buy insurance policies.
• 2) Increase in percentage of Returns on increase: The bank should provide higher returns on deposits in
comparison of the present situation. This will also upto large extent help the bank earnprofits & popularity.
• 3) Recruit professionally guided students: Bank & Insurance is a special non-aid course wherethe students
specialize in the functioning & services of the bank & also are knowledge aboutvarious tax policies. The bank can
recruit these students through tie- ups with colleges. Suchstudents will surely prove as an asset to the bank.
• 4) Associate with social cause: The bank can also associate itself with social causes like providing relief aid
patients, funding towards natural calamities. But this falls in the 4th quadrant so the bank should neglect it.

73. Threats
• Competition: ICICI Bank is facing tight competition locally as well as internationally. Bank like CITI Bank, HSBC, ABM,
Standered Chartered, HDFC also provide equivalent facilities likeICICI do and also ICICI do not have consistency in its
international operation.
• Net Services: ICICI Bank provides all kind of services on-line. There can be easy access tothe e-mail ids of the customers
through wrong people. The confidential information of thecustomers can be leaked easily through the e-mail ids.
• Decentralized Management: Each branch manager is given the authority of taking decisionsin their respective branches. The
decisions made by different managers are diverse and any onewrong decision can laid to heavy losses to the bank.
• No Proper Facilities To Uneducated customers: ICICI Bank provides all services through electronic computerized machines.
This creates problems to the less educated people.

74. Swot analysis of HDFC bank
Strengths
• Right strategy for the right products.
• Superior customer service vs. competitors.
• Great Brand Image.
• Products have required accreditation.
• High degree of customer satisfaction
• Good place to work
• Lower response time with efficient and effective service.
• Dedicated workforce aiming at making a long-term career in the field.
Weakness
• Some gaps in range for certain sectors.
• Customer service staff need training.
• Processes and systems, etc
• Management cover insufficient.
• Sectoral growth is constrained by low unemployment levels and competition for staff

75. Opportunities
• Profit margins will be good.
• Could extend to overseas broadly.
• New specialist applications.
• Could seek better customer deals.
• Fast-track career development opportunities on an industry-wide basis.
• An applied research center to create opportunities for developing techniques to provide added-value services.
Threats
• Legislation could impact.
• Great risk involved
• Very high competition prevailing in the industry.
• Vulnerable to reactive attack by major competitors.
• Lack of infrastructure in rural areas could constrain investment.
• High volume/low cost market is intensely competitive.

76. Swot analysis of Kotak Mahindra
Strengths
• Innovative financial products of diverse categories
• Kotak Mahindra Finance Ltd. is the first company in the Indian banking history to convert to a bank
• Comprehensive Cash Management System
• Has over 20,000 employees
• Customer account base of over 2.7 million
• Professional management
• Strong technology,
• Well capitalized,
• Comprehensive cash management system
Weakness
• Lesser penetration as being late entrants
• Low publicity and marketing as compared to other premium banks in the urban areas

77. Opportunities
• Increase in Industry banking
• Explore opportunities abroad by International banking
Threats
• Capital Market slow-down
• Other better Saving Facility by other Competitor
• Rising Rates
• investment option available (like Insurance, Mutual fund, Real-estate, Gold)
• Government Rules And Regulation

78. Swot analysis of Axis bank
Srengths
• The bank has a good image among urban population
• The bank is registering a good growth
• A huge portfolio of product and services
• Decent penetration in the rural areas
• One of the largest private sector financer in India for Agriculture loans wiz Retail Agri & Corporate Agri
Weakness
• Lesser no. of branches compared to its competitors
• Image of the bank still under the shadow of the UTI debacle

79. Opportunities
• Expansion in rural areas
• Going to foreign markets and exploring the new economies
Threats
• New banking licenses issued by the Reserve Bank Of India
• Foreign banks
• Competitors

80. Strategies of the past
ICICI Bank Ltd. Acquires Bank of Madura (March '01)
• Intent
ICICI Bank Ltd wanted to spread its network, without acquiring RBI's permission for branch expansion.
BoM was a plausible target since its cash management business was among the top five in terms of
volumes. In addition, there was a possibility of reorienting its asset profile to enable better spreads and
create a more robust micro-credit system post merger.
• Benefits
The branch network of the merged entity increased from 97 to 378, including 97 branches in the rural sector.9 The Net
Interest Margin increased from 2.46% to 3.55 %. The Core fee income of ICICI almost doubled from Rs 87 crores to Rs 171
crores. IBL gained an additional 1.2 million customer accounts, besides making an entry into the small and medium
segment. It possessed the largest customer base in the country, thus enabling the ICICI group to cross-sell different products
and services.
• Drawbacks
Since BoM had comparatively more NPAs than IBL, the Capital Adequacy Ratio of the merged entity was lower (from 19% to
about 17%). The two banks also had a cultural misfit with BoM having a trade-union system and IBL workers being young
and upwardly mobile, unlike those for BoM. There were technological issues as well as IBL used Banks 2000 software, which
was very different from BoM's ISBS software. With the manual interpretations and procedures and the lack of awareness of
the technology utilisation in BoM, there were hindrances in the merged entity.

81. Strategies of the past
Technology partnership with Infosys
To support its technology focused strategy, ICICI Bank needed a robust technology platform that would help it achieve its
business goals. After an intense evaluation of several global vendors, ICICI Bank identified Infosys as its technology partner
and selected Finacle, the universal banking solution from Infosys, as its core banking platform. An open systems approach
and low TCO (Total Cost of Ownership) were some of the key benefits Finacle offered the bank. Unlike most banks of that
era, ICICI Bank was automated from day one, when its first branch opened in the city of Chennai. Some of the reasons cited
by the bank for its decision to select Finacle include Finacle’s future-proof technology, best-of-breed retail and corporate
banking features, scalable architecture and proven implementation track record. With the ICICI group having several
companies under its umbrella, Finacle needed to seamlessly integrate with multiple applications such as credit cards,
mutual funds, brokerage, call centre and data warehousing systems.
Reaping The Benefits
A powerful, scalable and flexible technology platform is essential for banks to manage growth and compete
successfully. And Finacle provides just the right platform to ICICI Bank thus fuelling its growth.
The bank has successfully leveraged the power of Finacle and has deployed the solution in the areas of core
banking, consumer e-banking, corporate e-banking and CRM. With Finacle, ICICI Bank has also gained the
flexibility to easily develop new products targeted at specific segments such as ICICI Bank Young Stars- a product
targeting children, Women's Account addressing working women and Bank at campus targeting students.

82. Strategies of the past
Amalgamation with Investitsionno-Kreditny Bank (IKB), a Russian bank
ICICI Bank has acquired the entire paid-up capital of Investitsionno-Kreditny Bank (IKB), a Russian bank with its registered
office in Balabanovo in the Kaluga region and a branch in Moscow. As on March 31, 2005, IKB had total assets of about US$
4.4 million. ICICI Bank had a profit after tax of Rs. 20.05 billion for the year ended March 31, 2005 (Rs. 16.37 billion in fiscal
2004).
On the strategy behind the move into Russia-
In Russia, if you were to get a new banking license that itself is a fairly time consuming process and even after you acquire a
license you have to wait for another two years before you can access the retail depositories. ICICI started looking out for
any small bank, which would be a vehicle for us to get to the market immediately and IKB indeed offers that opportunity. It
is a small bank, four and a half million dollars in assets. However, it was licensed as a bank in 1998 and has deposit
insurance cover. That means ICICI could straight away tap the retail depository. Certainly, ICICI would explore consumer
business because the Russian markets are roughly at where the Indian consumer market was about 7 to 8 years ago.
Naturally, it offers a good opportunity.

83. Strategies of the past
Amalgamation with Sangli Bank
The boards of directors of ICICI Bank and Sangli Bank Limited at their respective meetings held here on Saturday
approved an all-stock amalgamation of Sangli Bank with ICICI Bank. Deloitte Haskins & Sells, the independent
valuer appointed jointly by ICICI Bank and Sangli Bank, has recommended a share exchange ratio of 100 shares
of ICICI Bank for 925 shares of Sangli Bank. The proposed amalgamation would result in issuance of an
additional 3.45 million shares of ICICI Bank, equivalent to about 0.4 per cent of its existing issued equity share
capital.
Reap the benefits
The proposed amalgamation is expected to be beneficial to the shareholders of both entities. ICICI Bank will
seek to leverage Sangli Bank’s network of over 190 branches and existing customer and employee base across
urban and rural centres in the rollout of its rural and small enterprise banking operations, which are key focus
areas for the Bank. The amalgamation would also supplement ICICI Bank’s urban distribution network. The
amalgamation would enable shareholders of Sangli Bank to participate in the growth of ICICI Bank’s strong
domestic and international franchise. The amalgamation will also provide new opportunities to Sangli Bank’s
employees, and give its customers access to ICICI Bank’s multi-channel network and wide range of products and
services.

84. Strategies of the past
Credit control mechanisim2008
In mid-2008, the credit control teams at ICICI Bank were confronted with a new set of challenges. In mid-2008, the credit
control teams at ICICI Bank were confronted with a new set of challenges. Amidst these challenges, ICICI Bank had to ensure
that its customers remained satisfied with its services and did not switch to its competitors. Debt collection was identified
as the key process where a friendlier approach could result in improved customer satisfaction and loyalty. Thus, the bank
introduced customer-friendly practices, which, in addition to ensuring collection, were aimed at improving customer
relationship and its own brand value. The bank management, with the aim to transform debt collection as a customer
retention tool, decided to use technology to achieve the objective. It employed analytical models developed with SAS that
factored in several parameters such as efficiency of collector, customer profile, risk behaviour, and exposure. For instance,
low risk and low outstanding debtors may just need a gentle reminder, whereas high risk and high outstanding debtors need
to be directly contacted via field agencies or bank employees.
Current account & Savings account
The Bank has adopted a conscious strategy of focusing on current and
savings account deposits and reducing its wholesale term deposit base. Current and savings account deposits
increased 16% toRs.66,914 crore (US$ 14.2 billion) at September 30, 2008 from Rs. 57,827 crore (US$ 12.3
billion) at September 30, 2007. Current and savings account (CASA) deposits constituted 30% of total deposits at
September 30, 2008 compared to 25% at September 30, 2007.

85. Strategies of the past
Enhance share of retail
Domestic Retail Banking deposits and position in credit
franchise
Leverage corporate
Global corporate and relationships ,structuring
investment banking expertise, balance sheet and
global syndication capability Shareholder
value
Leverage NRI opportunity
International Retail banking
and technology capabilities
Rural banking Invest for future growth

86. Strategies of the past
•Leadership position with demonstrated pricing power
Credit
•Centralized credit and operations
•Full range of products distributed through in house
network& external agent force
•Superior deposit gathering franchise: highest savings
Deposi account deposit per branch in the industry
ts •Savings account ratio at 27% compared to 22% at march
31 2007
•Diversified fee income streams :Loans, cards , transaction
Fee banking and distribution
income •Focus on cross sell of insurance and asset management
products

87. Strategies of the past
Corporate and investment banking strategy: April 2008
Origination Structuring Syndication
•Leveraging domestic
•Structuring skills •Global distribution capability
corporate relationships
•Balance sheet support- • Focus on risk diversification
•Project appraisal capabilities.
domestic and international and return optimization
•M&A advisory

88. Strategies of the past
International banking
•Strategy to comprehensively
cover an identified rural
geography with branches ,
International partnerships and technology
retail based channels.
banking •Branches at major agriculture
markets
•Franchisees, internet kiosks ,
MFI and corporate partners.
Rural Banking: An investment for the future
•Strategy to comprehensively cover an
Comprehe identified rural geography with branches ,
nsive partnerships &technology based channels
channel •Branches at major agricultural markets.
strategy •Franchisee, internet kiosks , MFI and
corporate partners
•Multi product suite for catering to various
Comprehe customer segments :farmer financing , agri
nsive businesses, commodity based financing and
product micro credit
strategy •Savings and investment products
•Insurance

89. Strategies of the past
Strategic developments to market development in May 2009
Conscious moderation
Volatile liquidity
in credit growth ahead
conditions
of cycle
Maintain high
Increased risks
capitalization levels
Focus on increasing
High wholesale deposit proportion of CASA
rates deposits and repayment
of wholesale deposits
Slower revenue growth Stringent cost control

90. Strategies of the past

91. Strategies of the past
No promotion no bonus but no attrition too: August 2009
This policy is serving two purposes for ICICI bank, cutting down employee cost and employee retention. Well! The
first one, that is cutting down employee cost through no increment is self explanatory and does not needs any
elaboration. As the company has already announced no bonus year it will save tens of thousands of rupees on
bonus and increment. . More than this, it is an appreciating fact that, it will also be able to control the attrition rate
as the policy is made public and other competitors would not be willing to offer a smart hike to candidates who are
looking for an opportunity outside the organization. In such a scenario, employees of the bank are left with the
only option to remain where they are and enjoy the no promotion and no bonus year.
Lending activities: August 2009
The main banking function is to accept deposits and lend money. Most of the aggressive loan sales departments
of the bank were operating at lesser operating and manpower levels due to a strategic slow down policy. This
helped the bank to reduce the increase in the Non-Performing Assets (NPA). The bank had gone slow on its
housing loans, mortgage loans and automobiles loans (both 2 wheelers and 4 wheelers). Most of the automobile
showrooms did not have an ICICI Bank representative throughout the year. ICICI Bank was also the last among
the major banks to reduce the housing loan interest rate to the competitive 8.5 per cent. Most of the PSU banks
lead by SBI were offering this rate since the beginning of the year 2009.The going slow on the lending has helped
the bank to have a better portfolio of assets. This will help the bank in the years to come.

92. Strategies of the past
Capital Adequacy: August 2009
During the year, the Bank has pursued a strategy of prioritising capital conservation, liquidity management and
risk containment given the challenging economic environment. This is reflected in the Bank's strong capital
adequacy and its focus on reducing its wholesale term deposit base and increasing its CASA ratio. The Bank is
maintaining excess liquidity on an ongoing basis. The Bank has also placed strong emphasis on efficiency
improvement and cost rationalization. The Bank continues to invest in expansion of its branch network to enhance
its deposit franchise and create an integrated distribution network for both asset and liability products. In line with
the above strategy, the total deposits of the Bank were Rs. 218,348 crore (US$ 43.0 billion) at March 31, 2009,
compared to Rs. 244,431 crore (US$ 48.2 billion) at March 31, 2008. The reduction in term deposits by Rs.
24,970 crore (US$ 4.9 billion) was primarily due to the Bank`s conscious strategy of paying off wholesale
deposits. In line with the strategy of prioritising capital conservation and risk containment, the loan book of the
Bank decreased marginally to Rs. 218,311 crore (US$ 43.0 billion) at March 31, 2009 from Rs. 225,616 crore
(US$ 44.5 billion) at March 31, 2008.

93. Strategies of the past
CASA
Increase the proportion of low cost
Capital
CASA deposits
Maintain high capital adequacy
Reduce the proportion of wholesale
deposits
Credit
Focus on opportunities in
Cost
mortgages, project finance and
Keep stringent control on operating
commercial banking
expenses
Further reduce unsecured retail
profile
Strategy for international business in 2010
• Strong term deposit mobilization capability in UK and canada subsidiaries.
• To be selectively deployed primarily in india linked assets
• Asset repayments in international branches being used to repay maturing liabilities.
• Limited growth in overall international balance sheets.

94. Strategies of the past
Key enablers in 2010
Distributio •Enhanced branch network as focal point for customer relationship.
n •Branches responsible for customer acquisition, sales and class
architectur servicing
e •Select “mega branches” identified for commercial banking opportunities
headed by senior employees
Collection
architectur •In-house collections for specific products and buckets
e •Dedicated pre-delinquency management cell
•Changes in the field agency management and incentives
• Retaining and redeployment of staff for new responsibilities in
Human branches
resources

95. Strategies of the past
Progress in execution of strategy in 2010
•Robust growth in CASA deposit.
Targets on 4 •Reduction in operating expenses
Cs achieved •Sharp reduction in NPL formation.
•Well capitalized for sustained growth.
Credit costs
• Retail NPA acceleration declined from Rs 14bn in Q1 2010 to Rs 5bn in Q42010
• Total provisions declined from Rs 13.24 bn in Q1 2010 to 9.72 bn in Q4 2010
• Provision cover ratio at 59.5% at March 31 2010 as compared to 51.2% at December 31 2009

96. Strategies of the past
Growth programme for 2011
Wholesale •Infrastructure and other project finance
banking •Commercial banking
•Mid-corporate and SME segments
•Leverage expanded branch infrastructure
Retail banking Retail deposits
Secured retail loans (vehicle)
Selective growth in personal loans & credit
cards

97. Strategies of the past
Reorganizing for customer centricity
Mar Mar Mar Mar Mar Mae20 Mar Mar
2003 2004 2005 2006 2007 08 2009 2010
Branch 446 469 562 614 755 1262 1419 2000
es
Branch as •Retail business reorganized around geographies and
primary customer segments
channel •Enhanced decision making
•Sales and service orientation
From
“product
focus” to •Segment specific strategies and value proposition
“customer encompassing both asset and liability relationship
focus”

98. Strategies of the past
Amalgamation with Bank Of Rajasthan
•25% increase in branch network to drive CASA /Retail deposits
Rationale •Significant presence in North and West India and large metro urban
cities.
•Supports move towards branch- centric /customer centric model
•Reduced time-market
Valuation
•25 shares of ICICI bank FOR 118 shares of Bank of Rajasthan
•In line with market cap per branch of comparable banks
•Board of directors of both banks have approved merger and swap
Current Status ratio

99. Strategies of the past
International Business
•Focus on the needs of Non resident Indians
Retail •Remittances into India
business •Savings and investment products
Funding •Build a stable & diversified funding base
franchisee •Develop retail deposit franchise by leveraging low cost technology
•Tap long term sources of funding like bonds and syndicated loans in a
calibrated manner to diversify funding.
•Lending to Indian corporate
Lending and •Leverage domestic relationships
trade •Trade finance
•Include select non-India exposures linked to trade with India

100. Strategies of the past
Progress against strategy in 2011
Rs in bn March 31st September CAGR
2009 30th 2011
Savings 410.36 701.49 23.9%
Deposit
Current 216.32 329.97 18.4%
account
deposits
CASA ratio 28.7% 42.1%

101. Strategies of the past
Progress against strategy: asset quality
Rs in bn Q2-2010 Q2-2012 Change
Provisions 10.71 3.19 -70.2%
Provisions/A 2.2% 0.6%
verage loans
Unsecured 8.9% 2.3%
retail/domest
ic loans
Net NPA 2.19% 0.80%
Provisioning 51.1% 78.2%
coverage

102. Opportunity spectrum for Icici bank
 Growing consuming class
• Rural consumption on an uptrend; pay commission
• implementation to increase public sector income
• Decrease in inflation and interest rates to support
• Consumption
 Significant industrial and infrastructure requirements
 Vast Indian diaspora spanning the globe
 Potential for remittances and NRI deposits
 Low penetration of insurance and asset management

103. Looking ahead
• Focus on rolling out branch network to enhance capability for retail deposit gathering & asset origination
• Actively monitor and manage existing portfolio for risks arising out of changing operating environment
• Continue to look for opportunities to reduce costs
• Maintain high capitalisation levels to be prepared for next round of growth