An Analysis Of Icic And Bank Of Rajashtan 123 (1).docx

Chapter - 1 An Introduction

A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords. Banking in its modern sense evolved in the 14th century in the prosperous cities of Renaissance Italy but in many ways was a continuation of ideas and concepts of credit and lending that had their roots in the ancient world. In the history of banking, a number of banking dynasties – notably, the Medicis, the Fuggers, the Welsers, the Berenbergs, and the Rothschilds – have played a central role over many centuries. The oldest existing retail bank is Banca Monte dei Paschi di Siena, while the oldest existing merchant bank is Berenberg Bank.

Meaning of Bank: - The term bank is derived from an Italian word “banca” and from French word “banque” both meaning a Bench or Money exchange tables. A bank is a financial institution which deals with deposits and advances and other related services. It receives money from those who want to save money in the form of deposits and lends to those who need it.

Definition of Bank: - The Oxford Dictionary defines a bank as “An establishment for custody of money which it pays out on customer’s order”.

Types Of bank:-

Introduction on Merger: - Mergers and acquisitions are among the most effective ways to expedite the implementation of a plan to grow rapidly. Companies in all industries have grown at lightning speed, in part because of an aggressive merger and acquisition strategy. The impact of technology and the Internet has only further increased the pace and size of deals. Buyers of all shapes and sizes have many of the same strategic objectives—to build long-term shareholder value and take advantage of the synergies that the combined firms will create—but each industry has its own specific objectives. Technology companies, in search of new ideas, new products, trained knowledge workers, strategic relationships and additional market share, have been the most acquisitive. Deals in the pharmaceutical industry are driven by the need to put more products into development pipelines and achieve certain economies of scale in combining research and development efforts. Defense industry mergers have been driven by shrinking federal budgets and the need to win privatesector. Deregulation in the energy and financial services industries have just begun to spawn deals driven by the ability to offer a more diversified range of services. Merger-and-acquisition frenzy has created intense competition for the same target companies, where a premium is placed on price and speed. The fear in many boardrooms is that the company will be left out or left behind if it doesn't move quickly to acquire other businesses. Deals that used to take months to get done now close in a matter of days, especially if no regulatory approvals need to be obtained and no shareholder battles will take place as a condition for getting the deal completed. In this environment, acquisitions are moving so fast and are being bid up so high that the likelihood of problems and errors has increased dramatically. You need to be armed with as much knowledge and as many tools as possible to be an effective entrepreneur in this marketplace. This article, first in a series, offers some insights into the process of combining companies the right way.

Meaning: - The combining of two or more companies or organizations into one.

Definition: - The absorption of an estate, a contract, or an interest in another, of a minor offense in a greater, or of a cause of action into a judgment.

Histrory of Merger: - Tracing back to history, merger and acquisitions have evolved in five stages and each of these are discussed here. As seen from past experience mergers and acquisitions are triggered by economic factors. The macroeconomic environment, which includes the growth in GDP, interest rates and monetary policies play a key role in designing the process of mergers or acquisitions between companies or organizations. First Wave Mergers :- The first wave mergers commenced from 1897 to 1904. During this phase merger occurred between companies, which enjoyed monopoly over their lines of production like railroads, electricity etc. the first wave mergers that occurred during the aforesaid time period were mostly horizontal mergers that took place between heavy manufacturing industries. End Of 1st Wave Merger :- Majority of the mergers that were conceived during the 1st phase ended in failure since they could not achieve the desired efficiency. The failure was fuelled by the slowdown of the economy in 1903 followed by the stock market crash of 1904. The legal framework was not supportive either. The Supreme Court passed the mandate that the anticompetitive mergers could be halted using the Sherman Act. Second Wave Mergers :- The second wave mergers that took place from 1916 to 1929 focused on the mergers between oligopolies, rather than monopolies as in the previous phase. The economic boom that followed the post world war I gave rise to these mergers. Technological developments like the development of railroads and transportation by motor vehicles provided the necessary infrastructure for such mergers or acquisitions to take place. The government policy encouraged firms to work in unison. This policy was implemented in the 1920s. The 2nd wave mergers that took place were mainly horizontal or conglomerate in nature. Te industries that went for merger during this phase were producers of primary metals, food products, petroleum products, transportation equipments and chemicals. The investments banks played a pivotal role in facilitating the mergers and acquisitions. End Of 2nd Wave Mergers :- The 2nd wave mergers ended with the stock market crash in 1929 and the great depression. The tax relief that was provided inspired mergers in the 1940s.

Third Wave Mergers :-The mergers that took place during this period (1965-69) were mainly conglomerate mergers. Mergers were inspired by high stock prices, interest rates and strict enforcement of antitrust laws. The bidder firms in the 3rd wave merger were smaller than the Target Firm. Mergers were financed from equities; the investment banks no longer played an important role.

End Of The 3rd Wave Merger :-The 3rd wave merger ended with the plan of the Attorney General to split conglomerates in 1968. It was also due to the poor performance of the conglomerates.Some mergers in the 1970s have set precedence. The most prominent ones were the INCO-ESB merger; United Technologies and OTIS Elevator Merger are the merger between Colt Industries and Garlock Industries.

Fourth Wave Merger:-The 4th wave merger that started from 1981 and ended by 1989 was characterized by acquisition targets that wren much larger in size as compared to the 3rd wave mergers. Mergers took place between the oil and gas industries, pharmaceutical industries, banking and airline industries. Foreign takeovers became common with most of them being hostile takeovers. The 4th Wave mergers ended with anti-takeover laws, Financial Institutions Reform and the Gulf War. Fifth Wave Merger:-The 5th Wave Merger (1992-2000) was inspired by globalization, stock market boom and deregulation. The 5th Wave Merger took place mainly in the banking and telecommunications industries. They were mostly equity financed rather than debt financed. The mergers were driven long term rather than short term profit motives. Hence we may conclude that the evolution of mergers and acquisitions has been long drawn. Many economic factors have contributed its development. There are several other factors that have impeded their growth. As long as economic units of production exist mergers and acquisitions would continue for an everexpanding economy.

Features of Mergers Marketing: – Marketing costs are often substantial, in some cases more than production costs. Instead of two companies marketing fiercely for the same market pie, a single combined company can achieve same result with much lesser marketing efforts and costs. While negative effects of competitor’s advertising are not there, many overlapping costs between two companies are also saved.

(ii) Product Portfolio Rationalization: – Most companies serve only a few segments and have no products offering for other segments. Take the case of HLL - TOMCO merger. While HLL had many western brands, appealing to high and middle class segments, it did not have an ethnic brand with appeal to lower strata (volume drivers) of the society. TOMCO had reverse problem. When the two merged, HLL could penetrate ethnic segment also. (iii) Procurement: – Combined procurement of raw material and services for added capacity gives economies of scale in procurement and bulk concessions. (iv) Production: – Production yields often improve, wastages fall, batch time comes down, etc, due to sharing of technology and knowledge between the two companies.

Growth: – Growth is often the reason for mergers and acquisitions. A company wanting to grow has two options. Either to erect a Green Field project and sit out through the gestation period or acquire a company. Growth is not limited to just production volume but may be in terms of Geography or product also. As quoted earlier, HLL added ethnic brands to its line of products by acquiring TOMCO. Similarly, when Kissan bought out Dippys, one of the primary purposes was to gain the market share in South India where Dippy’s brand had good market share.

Neutralizing Competition:- Though it is illegal (by Competition Commission in India, Anti Trust Laws in USA and similar laws in most countries and therefore, even authors are shy of quoting this as one of the reasons), it is still the purpose behind many takeover bids. Take for instance, Coca Cola’s purchase of Thumsup, Limca, Gold Spot, etc brands from Chauhans of Parle Group. These once popular brands commanding huge market share were purchased and killed gradually to make way for Coca Cola’s products.

Diversification of Risks: – Expansion of business, through product portfolio growth, geographical spread, distribution of production facilities, or spread through various segments of society reduces the risk of business.

Types of Mergers: - There are five commonly-referred to types of business combinations known as mergers: conglomerate merger, horizontal merger, market extension merger, vertical merger and product extension merger. The term chosen to describe the merger depends on the economic function, purpose of the business transaction and relationship between the merging companies.

Conglomerate: - A merger between firms that are involved in totally unrelated business activities. There are two types of conglomerate mergers: pure and mixed. Pure conglomerate mergers involve firms with nothing in common, while mixed conglomerate mergers involve firms that are looking for product extensions or market extensions.

Example: - A leading manufacturer of athletic shoes merges with a soft drink firm. The resulting company is faced with the same competition in each of its two markets after the merger as the individual firms were before the merger. One example of a conglomerate merger was the merger between the Walt Disney Company and the American Broadcasting Company.

Horizontal Merger: - A merger is occurring between companies in the same industry. Horizontal merger is a business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service. Horizontal mergers are common in industries with fewer firms, as competition tends to be higher and the synergies and potential gains in market share are much greater for merging firms in such an industry.

Example: - A merger between Coca-Cola and the Pepsi beverage division, for example, would be horizontal in nature. The goal of a horizontal merger is to create a new, larger organization with more market share. Because the merging companies' business operations may be very similar, there may be opportunities to join certain operations, such as manufacturing, and reduce costs.

Market Extension Mergers: - A market extension merger takes place between two companies that deal in the same products but in separate markets. The main purpose of the market extension merger is to make sure that the merging companies can get access to a bigger market and that ensures a bigger client base.

Example: - A very good example of market extension merger is the acquisition of Eagle Bancshares Inc by the RBC Centura. Eagle Bancshares is headquartered at Atlanta, Georgia and has 283 workers. It has almost 90,000 accounts and looks after assets worth US $1.1 billion. Eagle Bancshares also holds the Tucker Federal Bank, which is one of the ten biggest banks in the metropolitan Atlanta region as far as deposit market share is concerned. One of the major benefits of this acquisition is that this acquisition enables the RBC to go ahead with its growth operations in the North American market. With the help of this acquisition RBC has got a chance to deal in the financial market of Atlanta , which is among the leading upcoming financial markets in the USA. This move would allow RBC to diversify its base of operations.

Product Extension Mergers: - A product extension merger takes place between two business organizations that deal in products that are related to each other and operate in the same market. The product extension merger allows the merging companies to group together their products and get access to a bigger set of consumers. This ensures that they earn higher profits.

Example: - The acquisition of Mobilink Telecom Inc. by Broadcom is a proper example of product extension merger. Broadcom deals in the manufacturing Bluetooth personal area network hardware systems and chips for IEEE 802.11b wireless LAN. Mobilink Telecom Inc. deals in the manufacturing of product designs meant for handsets that are equipped with the Global System for Mobile Communications technology. It is also in the process of being certified to produce wireless networking chips that have high speed and General Packet Radio Service technology. It is expected that the products of Mobilink Telecom Inc. would be complementing the wireless products of Broadcom.

Vertical Merger: - A merger between two companies was producing different goods or services for one specific finished product. A vertical merger occurs when two or more firms, operating at different levels within an industry's supply chain, merge operations. Most often the logic behind the merger is to increase synergies created by merging firms that would be more efficient operating as one.

Example: - A vertical merger joins two companies that may not compete with each other, but exist in the same supply chain. An automobile company joining with a parts supplier would be an example of a vertical merger. Such a deal would allow the automobile division to obtain better pricing on parts and have better control over the manufacturing process. The parts division, in turn, would be guaranteed a steady stream of business. Synergy, the idea that the value and performance of two companies combined will be greater than the sum of the separate individual parts is one of the reasons companies’ mergers.

Advantages of mergers   

Economies of scale – bigger firms more efficient More profit enables more research and development. Struggling firms can benefit from new management.

Disadvantages of mergers  

Increased market share can lead to monopoly power and higher prices for consumers A larger firm may experience diseconomies of scale – e.g. harder to communicate and coordinate.

Pros of mergers 1. Network Economies: - In some industries, firms need to provide a national network. This means there are very significant economies of scale. A national network may imply the most efficient number of firms in the industry is one. For example, when T-Mobile merged with Orange in the UK, they justified the merger on the grounds that: “The ambition is to combine both the Orange and T-Mobile networks, cut out duplication, and create a single super-network. For customers, it will mean bigger network and better coverage, while reducing the number of stations and sites – which is good for cost reduction as well as being good for the environment.”

2. Research and development: -In some industries, it is important to invest in research and development to discover new products/technology. A merger enables the firm to be more profitable and have greater funds for research and development. This is important in industries such as drug research, where a firm needs to be able to afford many failures.

3. Avoid duplication: - In some industries, it makes sense to have a merger to avoid duplication. For example, two bus companies may be competing over the same stretch of roads. Consumers could benefit from a single firm with lower costs. Avoiding duplication would have environmental benefits and help reduce congestion.

4. Regulation of Monopoly: -Even if a firm gains monopoly power from a merger, it doesn’t have to lead to higher prices if it is sufficiently regulated by the government. For example, in some industries, the governments have price controls to limit price increases. That enables firms to benefit from economies of scale, but consumers don’t face monopoly prices.

5. Other economies of scale: -

Two smaller firms producing Q2 would have average costs of AC2. A merger which led to a firm producing at Q1 would have lower average costs of AC 1. The potential economies of scale that can arise include:   

Bulk buying – buying raw materials in bulk enables lower average costs Technical economies – large machines and investment is more efficient spread over a larger output. Marketing economies – A tech firm bought by Google may benefit from Google’s expertise and brand name. In a horizontal merger, economies of scale can be quite extensive, especially if there are high fixed costs in the industry. For example, aeroplane manufacture is now dominated by two large firms after a series of mergers. If the merger was a vertical merger (two firms at different stages of production) or conglomerate merger, the scope for economies of scale would be lower.

Cons of Mergers 1. Higher Prices: -A merger can reduce competition and give the new firm monopoly power. With less competition and greater market share, the new firm can usually increase prices for consumers. For example, there is opposition to the merger between British Airways (parent group IAG) and BMI. This merger would give British Airways an even higher percentage of flights leaving Heathrow and therefore much scope for setting higher prices. Richard Branson (of Virgin) states:This takeover would take British flying back to the dark ages. BA has a track record of dominating routes, forcing less flying and higher prices. This move is clearly about knocking out the competition. The regulators cannot allow British Airways to sew up UK flying and squeeze the life out of the travelling public. It is vital that regulatory authorities, in the UK as well as in Europe, give this merger the fullest possible scrutiny and ensure it is stopped.”

2. Less choice: - A merger can lead to less choice for consumers.A merger can lead to less choice for consumers. This is important for industries such as retail/clothing/food where choice is as important as price

3. Job Losses: -A merger can lead to job losses. This is a particular cause for concern if it is an aggressive takeover by an ‘asset stripping’ company – A firm which seeks to merge and get rid of under-performing sectors of the target firm.On the other hand, other economists may argue this ‘creative destruction’ of job losses will only lead to temporary job losses and the unemployed will find new jobs in more efficient firms.

4. Diseconomies of Scale: -The new larger firm may experience dis-economies of scale from the increased size. After a merger, the new bigger firm may lack the same degree of control and struggle to motivate workers. If workers feel they are just part of a big multinational they may be less motivated to try hard. Also, if the two firms had little in common then it may be difficult to gain the synergy between the two companies.

Benefits of Mergers 1. International competition: - Mergers can help firms deal with the threat of multinationals and compete on an international scale. This is increasingly important in an era of global markets.

2. Mergers may allow greater investment in R&D: - This is because the new firm will have more profit which can be used to finance risky investment. This can lead to a better quality of goods for consumers. This is important for industries such as pharmaceuticals which require a lot of investment. It is estimated 90% of research by drug companies never comes to the market. There is a high chance of failure. A merger, creating a bigger firm, gives more scope to tolerate failure, encouraging more innovation.

3. Greater efficiency: - Redundancies can be merited if they can be employed more efficiently. It may lead to temporary job losses, but overall productivity should rise.

4. Protect an industry from closing: - Mergers may be beneficial in a declining industry where firms are struggling to stay afloat. For example, the UK government allowed a merger between Lloyds TSB and HBOS when the banking industry was in crisis.

5. Diversification: - In a conglomerate merger, two firms in different industries merge. Here the benefit could be sharing knowledge which might be applicable to the different industry. For example, AOL and Time-Warner merger hoped to gain benefit from both the new internet industry and an old media firm.

Examples of mergers 2017 – Amazon merger with Whole Foods. Amazon has knowledge and expertise in online shopping. Whole Foods is a major food retailer. It is hoped the merger will enable Whole Foods to benefit from Amazon’s existing infrastructure and online delivery. 2000 Glaxo Wellcome Plc and SmithKline Beecham Plc – became GlaxoSmithKline. Hoped larger firm more powerful in developing R&D. 2014 Facebook – WhatsApp – 2016 Microsoft acquired LinkedIn ($26.2 billion)

Chapter – 2 Research Methodology

Research Objectives:

To study the pre and post-Merger impact of Bank.



To understand the financial performance and differences.



To understand the importance of Merger in Bank.



To increase efficiency



To maximize shareholder’s value



To enhance profitability



To gain market power



To attain optimal size of business



To capture large portion of the growing retail business



To achieve economies of scale of operation



To build up financial strength



To withstand against global.

Hypothesis Development:

H0 (1): There is no significance difference in financial performance amongst the selected Banks With respect to their pre and post-Merger Analysis.



H1 (1): There is a significance difference in financial performance amongst the selected Banks with respect to their pre and post-Merger Analysis.



H0 (2): There is no significant difference in Earning per Share (EPS) amongst the selected Banks with respect to their pre and post-Merger Analysis.



H1 (2): There is a significant difference in Earning per Share (EPS) amongst the selected

LIMITATIONS OF THE RESEARCH:This Research study in mainly based on secondary data derived from the annual reports of Banks. The reliability and the finding are contingent upon the data published in Annual Reports. Accounting ratios have its own limitation which also applied to the study. The study is limited to three years before merger and three years after merger only.

Data Collection:The study is on the basis of Secondary data collection. Secondary data was collected from the Annual Report of Bank and various other sources. Research may be defined as the research for knowledge through an objective. The ratios taken by researcher in our research are analyzed by using paired T – test to investigate any significant difference. The data analysis is done using SPSS.

Scope of the study:Data analysis and interpretation having important role in the completion of any research work. This provides the actuality of the results which are based on the structured data. As per the objectives of the study analysis and interpretation of the whole data are categorized into two categories. In primary category, pre and post-merger announcement effect on daily closing share prices as well as turnover (daily trading in rupees) shown separately, when the board of members

of both the banks announced for merger as on May 23, 2010. This section covered with one another parameter, which describes the net average effects on the shares prices movements in pre-post announcement context. In the second category, pre and post-merger announcement effect on daily closing share prices as well as turnover (daily trading in rupees) shown separately, when the distinct body of Indian banking RBI approved permission for merger between both the banks. RBI approved permission for merger as on August 13, 2010. IRJC International Journal of Marketing, Financial Services

Research Methodology: Research is a systematic study of knowledge obtained from various sources. Tools used for collection of data or information are various website related as per topics & reference books. This is a descriptive research where survey method is adopted to collect secondary data information from the respondent required and the primary information for the analysis. 

Company websites



Books



Related information from internet.

Chapter – 4 Data Analysis

ICICI

Bank

Limited

is

an Indian multinational banking and financial

services company

headquartered in Mumbai, Maharashtra with its registered office in Vadodara, Gujarat. As of 2018, ICICI Bank is the second largest bank in India in terms of assets and market capitalisation. It offers a wide range of banking products and financial services for corporate and retail customersthrough a variety of delivery channels and specialised subsidiaries in the areas of investment banking, life, non-life insurance, venture capital and asset management. The bank currently has a network of 4867 branches and 14367 ATMs across India and has a presence in 17 countries including India. ICICI Bank is one of the Big Four banks of India. The bank has subsidiaries in the United Kingdom and Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar, Oman, Dubai International Finance Centre, China and South Africa; and representative offices in United Arab Emirates, Bangladesh, Malaysia and Indonesia. The company's UK subsidiary has also established branches in Belgium and Germany.

History of ICICI Bank:ICICI Bank was established by the Industrial Credit and Investment Corporation of India (ICICI), an Indian financial institution, as a wholly owned subsidiary in 1994. The parent company was formed in 1955 as a joint-venture of the World Bank, India's public-sector banks

and public-sector insurance companies to provide project financing to Indian industry. The bank was founded as the Industrial Credit and Investment Corporation of India Bank, before it changed its name to the abbreviated ICICI Bank. The parent company was later merged with the bank. ICICI Bank launched internet banking operations in 1998. ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public offering of shares in India in 1998, followed by an equity offering in the form of American Depositary Receipts on the NYSE in 2000. ICICI Bank acquired the Bank of Madura Limited in an all-stock deal in 2001 and sold additional stakes to institutional investors during 2001-02. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group, offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002 and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002.

In 2008, following the 2008 financial crisis, customers rushed to ICICI ATMs and branches in some locations due to rumours of an adverse financial position of ICICI Bank. The Reserve Bank of India issued a clarification on the financial strength of ICICI Bank to dispel the rumours.

Acquisitions:

1996: ICICI Ltd. A diversified financial institution with headquarters in Mumbai



1997: ITC Classic Finance. incorporated in 1986, ITC Classic was a non-bank financial firm that engaged in hire, purchase, and leasing operations. At the time of being acquired, ITC Classic had eight offices, 26 outlets, and 700 brokers.



1997: SCICI (Shipping Credit and Investment Corporation of India)



1998: Anagram(ENAGRAM) Finance. Anagram had built up a network of some 50 branches in Gujarat, Rajasthan, and Maharashtra that were primarily engaged in retail financing of cars and trucks. It also had some 250,000 depositors.



2001: Bank of Madurai



2002: The Darjeeling and Shimla branches of Grindlays Bank



2005: Investitsionno-Kreditny Bank (IKB), a Russian bank



2007: Sangli Bank. Sangli Bank was a private sector unlisted bank, founded in 1916, and 30% owned by the Bahte family. Its headquarters were in Sangli in Maharashtra, and it had 198 branches. It had 158 in Maharashtra and 31 in Karnataka, and others in Gujarat, Andhra Pradesh, Tamil Nadu, Goa, and Delhi. Its branches were relatively evenly split between metropolitan areas and rural or semi-urban areas.



2010: The Bank of Rajasthan (BOR) was acquired by the ICICI Bank in 2010 for ₹ 30 billion. RBI was critical of BOR's promoters not reducing their holdings in the company. BOR has since been merged with ICICI Bank.

Role in Indian Financial Infrastructure:The bank has contributed to the set-up of a number of Indian institutions to establish financial infrastructure in the country over the years: 

The National Stock Exchange was promoted by India's leading financial institutions (including ICICI Ltd.) in 1992 on behalf of the Government of India with the objective of establishing a nationwide trading facility for equities, debt instruments and hybrids, by ensuring equal access to investors all over the country through an appropriate communication network.



In 1987, ICICI Ltd along with UTI set up CRISIL as India's first professional credit rating agency.



NCDEX was set up in 2003, by ICICI Bank Ltd, LIC, NABARD, NSE, Canara Bank, CRISIL, Goldman Sachs, Indian Farmers Fertiliser Cooperative Limited (IFFCO) and Punjab National Bank.



ICICI Bank has facilitated setting up of "FINO Cross Link to Case Link Study" in 2006, as a company that would provide technology solutions and services to reach the underserved and underbanked population of the country. Using technologies like smart cards, biometrics and a basket of support services, FINO enables financial institutions to

conceptualise, develop and operationalise projects to support sector initiatives in microfinance and livelihoods. 

Entrepreneurship Development Institute of India (EDII), was set up in 1983, by the erstwhile apex financial institutions like IDBI, ICICI, IFCI and SBI with the support of the Government of Gujarat as a national resource organisation committed to entrepreneurship development, education, training and research.



Eastern Development Finance Corporation (NEDFI) was promoted by national level financial institutions like ICICI Ltd in 1995 at Guwahati, Assam for the development of industries, infrastructure, animal husbandry, agri-horticulture plantation, medicinal plants, sericulture, aquaculture, poultry and dairy in the North Eastern states of India.



Following the enactment of the Securitisation Act in 2002, ICICI Bank, together with other institutions, set up Asset Reconstruction Company India Limited (ARCIL) in 2003. ARCIL was established to acquire non-performing assets (NPAs) from financial institutions and banks with a view to enhance the management of these assets and help in the maximisation of recovery.



ICICI Bank has helped in setting up Credit Information Bureau of India Limited (CIBIL), India's first national credit bureau in 2000. CIBIL provides a repository of information (which contains the credit history of commercial and consumer borrowers) to its members in the form of credit information reports.

Products:ICICI Bank offer products and services like online money transfer & tracking service, loans, automated lockers, credit card, debit card and digital wallet.

Subsidiaries:Domestic:

ICICI Prudential Life Insurance Company Limited



ICICI Lombard General Insurance Company Limited



ICICI Prudential Asset Management Company Limited



ICICI Prudential Trust Limited



ICICI Securities Limited



ICICI Securities Primary Dealership Limited



ICICI Venture Funds Management Company Limited



ICICI Home Finance Company Limited



ICICI Investment Management Company Limited



ICICI Trusteeship Services Limited



ICICI Prudential Pension Funds Management Company Limited

International:

ICICI Bank USA



ICICI Bank UK PLC



ICICI Bank Canada



ICICI Bank Germany



ICICI Bank Eurasia Limited Liability Company



ICICI Securities Holdings Inc.



ICICI Securities Inc.



ICICI International LImited

Award and Achievements of ICICI:2003 

"The Asian Banker Excellence in Retail Financial Services Program" by The Asian Banker[46]

2004 

Best Bank in India Award presented by Euromoney Magazine[47]

2006 

Bank of the Year 2006 India by the Banker[48]

2007 

ICICI Bank has been conferred the Euromoney Award 2007 for the Best Bank in the AsiaPacific Region



ICICI Bank wins the Excellence in Remittance Business award by The Asian Banker



ICICI Bank was got the awards for 'Best Transaction Bank' in India, 'Best Domestic Bank' in India, 'Best follow-on offering'(US$4.94 billion), 'Best Investment Grade Bond'(US$2 billion, three-tranche bonds), Best Syndicated Loan Managers by Asset.

2009 

ICICI Bank bags the "Best bank in SME financing (Private Sector)" at the Dun & Bradstreet Banking awards



ICICI Bank won the Best Banking Security Systems Project Award and Best E-Banking Project Implementation Award by The Asian Banker.

2010 

ICICI Bank won the Best Banking Security System by The Asian Banker.

2011 

ICICI Bank is the only Indian brand to figure in the BrandZ Top 100 Most Valuable Global Brands Report, second year in a row



ICICI Bank won the 'Best CRM Project' and 'Best Banking Security Systems' by The Asian Banker.

2012 

Airtel, ICICI among 'top 100 global brands'[59]



ICICI Bank received the Golden Peacock Innovative Product / Service Award.



ICICI Bank received the Dataquest Technology Innovation Awards 2012 for Data center migration by Dataquest.



ICICI Bank was conferred the Best Performance Award for Self Help Group (SHG) Bank Linkage Programme in NABARD's State Level Awards announced by their Maharashtra Regional Office. The Bank received the first prize for the year 2010–11 in the Private Sector Bank category and 2nd runner up for the year 2011–12 in the Commercial Bank category.

2013 

ICICI Bank has been adjudged winner at the Express IT Innovation Award under the Large Enterprise category



ICICI Bank won the RMAI received the "Gram Samvad", Service for Low cost/Small budget marketing initiative Award by Rural Marketing Association of India (RMAI).



ICICI bank won the 'Next Generation Banking solution' award by Celent.



ICICI bank won the Best Domestic Trade Finance Bank and Best Financial Supply Chain Project Award in India by The Asian Banker



ICICI Bank won the honours of the Medici Innovation Hall of Fame Award, instituted by The Medici Institute in collaboration with the Medici Group, USA.

2014 

According to the Brand Trust Report 2014, ICICI Bank was ranked 28th among India's most trusted brands, a research conducted by Trust Research Advisory.



ICICI Bank was ranked second at the 'National Energy Conservation Award 2014' under the office buildings (less than 10 lakh kWh/year consumption) category.



ICICI Bank was fifth in the world and second in India on the 'Top Companies for Leaders' in a study conducted by Aon Hewitt.



ICICI bank won the Best Private Sector Bank - Global Business Development by Polaris Financial Technology Banking Awards 2014.



IDBRT awarded ICICI for 'Best Bank Award for Business Intelligence Initiatives among Large Banks' and 'Best Bank Award for Social Media and Mobile Banking Among Large Banks'.[71] Companies in Corporate Governance in the 14th The Institute of Company Secretaries of India National Awards for Corporate Governance. They were honoured by Arun Jaitley.



ICICI Bank has been honoured as The Best Service Provider - Risk Management, India at The Asset Triple A Transaction Banking, Treasury, Trade and Risk Management Awards 2014.



ICICI Bank was awarded the 'Best Retail Bank in India', 'Best Microfinance Business' and 'Best Retail Banking Branch Innovation' under the 'Excellence in Retail Financial Services awards 2014' and Technology Implementation Award for Lending Platform Implementation by The Asian Banker.

2015



ICICI Bank won an award in the BFSI Leadership Summit & Awards in the 'Best Phone Banking for End-users' category



ICICI Bank won in six categories and was the first runner-up in one category among Private Sector Banks at IBA Banking Technology Awards, 2015. The bank was declared winner in the six categories of Best Technology Bank of the Year, Best use of Data, Best Risk Management Initiatives, Best use of Technology in Training, Human Resources and eLearning initiatives, Best Financial Inclusion Initiative and Best use of Digital and Channels Technology. ICICI Bank was the first runner-up in Best use of Technology to Enhance Customer Experience



ICICI Bank has been declared as the first runner up at Outlook Money Awards 2015 in the category of ‘Best Bank’



ICICI Bank has been adjudged the ‘Best Retail Bank in India’ by The Asian Banker. It has also emerged winners in the categories of ‘Best Internet Banking Initiative’ and ‘Best Customer Risk Management Initiative’ awards given by The Asian Banker.



‘Best Local Trade Finance Bank in India’ at Global Trade Review Asia Leaders in Trade Awards 2015.



‘Best Foreign Exchange Bank’ in India, at Finance Asia’s 2015 Country Banking Achievement Awards.



‘Best Private Sector Bank’ under ‘Global Business’ category at the Dun & Bradstreet Banking Awards 2015.



‘Best Website Design’ in Asia-Pacific at Global Finance 2015 World’s Best Digital Bank Awards.



Winner at the National Energy Conservation Awards 2015 under the ‘Office Buildings’ category (energy consumption of over 1 million units per annum).



First among private sector banks in The Economic Times Brand Equity’s Most Trusted Brands survey 2015.



Runner up in the categories of ‘Immediate Payment Service’, ‘Cheque Truncation System’ and ‘National Financial Switch’ at the National Payments Excellence Awards 2015 organised by the National Payments Corporation of India. The Bank was also felicitated with a special award for issuing the largest number of RuPay Platinum cards.

2016 

‘Best Retail Bank in India’ at the Asian Banker International Excellence in Retail Financial Services Awards 2016. ICICI Bank has won this award three years in a row.



Gold awards in the ‘Bank’ and ‘Credit card issuing Bank’ segments under Finance category in the Reader’s Digest Trusted Brand 2016 Survey.



First in The Brand Trust Report, India Study 2016 by Trust Research Advisory under the ‘Banking Financial Services and Insurance’ category.



Winner at the ‘Global Safety Awards 2016’ organised by the Energy and Environment Foundation. This award is sponsored by Ministry of Petroleum & Natural Gas and Ministry of Coal, Government of India.

Mergers and Acquisitions by ICICI Bank Ltd.

1. Amalgamation of SCICI. Effective April 1, 1996, ICICI acquired SCICI Limited, a diversified financial institution in which ICICI had an existing 19.9% equity interest. ICICI acquired SCICI principally to benefit from the scale efficiencies of being a larger entity. The assets of SCICI amounted to Rs. 50.4 billion (US$ 1.0 billion), approximately 16.8% of ICICI’s total assets at year-end fiscal 1996. The business combination was accounted for by the purchase method. The business combination resulted in negative goodwill of Rs. 3.1 billion (US$ 65 million) as the purchase price was less than the fair value of the net assets acquired. Of this amount, Rs. 600 million (US$ 13 million) was set-off against certain property and equipment and an amount of Rs. 253 million (US$ 5 million) was accrued to income in each of the years for fiscal 1997 to fiscal 2001. In addition, in fiscal 1998, income of Rs. 242 million (US$ 5 million) was accrued from the sale of SCICI's headquarters building in Mumbai.

2. Amalgamation of ITC Classic Finance Ltd. It was one of the first-of-its-kind mergers in the country's financial sector, ITC Classic Finance Ltd, the beleaguered non-banking financial arm of ITC Ltd, and country's premier development financial institution, Industrial Credit Investment Corporation of India (ICICI) to merge their operations and share swap ratio for ITC Classic-ICICI merger was 15:1. Tobacco major, ITC was desperately scouting a buyer for ITC Classic, which had accumulated losses of over Rs. 300 crore. ITC Classic Finance Ltd was named after ITC’s premium cigarette brand ‘Classic.’ It was incorporated in 1986. ITC Classic was a non-banking finance company (NBFC). Largely, it was

engaged in hire, purchase, and leasing operations. In addition, the company undertook investment operations on a substantial scale. The company did very well in the initial years and developed a strong network to mobilize retail deposits. Its fund-based activities such as corporate leasing, bill discounting, and equities trading also grew substantially over the years. At a compounded annual growth rate of 78% during 1991-96, ITC Classic’s annual turnover increased from Rs. 17.3 crore to over Rs. 310 crore and net profits from Rs. 2.3 crore to Rs. 31 crore in the same period. By the June 1996, the company had a deposit portfolio of Rs. 800 crore consisting mainly of retail deposits. The capital market boom of the early 1990s was responsible largely for ITC Classic’s impressive financials growth. Around 50% of ITC Classic’s assets had to be kept in financing and a further 25% was to be held in liquid funds or cash to handle cash outflows. However, Classic was free to invest the remaining 25%, which happened to be in the ‘boom stocks.’ When the markets crashed in 1992, ITC Classic had to face heavy losses. As far as ICICI was concerned, it was totally a ‘win’ proposition. The biggest benefit and opportunity for ICICI was ITC Classic’s retail network, which comprised 8 offices, 26 outlets, 700 brokers, and a depositor-base of 7 lakhs investors. ICICI planned to use this to strengthen the operations of ICICI Credit (I- Credit), a consumer finance subsidiary that ICICI had floated in April 1997. It was rightly stated by the then ICICI managing director and CEO, K. V. Kamath said that the merger would give them a fantastic retail base as ITC Classic had an investor base of over seven lakhs. Besides, there would be a synergy in business profile as on the asset side the ITC outfit is into leasing, hire, purchase, and bill discounting as they had a common corporate clientele.

3. Amalgamation of Anagram Finance

Anagram was primarily engaged in retail financing of cars and trucks. Between 1992 and 1998, Anagram has built a strong retail franchise, a distribution network of more than 50 branches, which were located in the prosperous states of Gujarat, Rajasthan, and Maharashtra, and it has a depositor base of 250,000 customers. Anagram Finance was adversely affected by the problems faced by the banking sector because of diverse factors including accounting and financial issues such as non-performing assets and high cost of funding etc. Anagram Finance conducted a detailed examination and review of the operations and financial condition of the company. It included a conservative estimation of provisions required for no performing or potential nonperforming assets had resulted in the net worth of the company becoming negative, necessitating infusion of further funds into the company. In order to protect the interests of the creditors including depositors and public shareholders, the investment companies had decided to infuse long term resources of Rs 125 crores convertible into nominal equity capital of the company upon the merger becoming effective in pursuance of the Articles of Agreement signed with ICICI on May 20, 1998. Share swap set for ICICI, Anagram Finance merger 1:15. Listing the reasons for the merger, ICICI said it has over the years consolidated its premier position as a wholesale provider of finance.

4. Amalgamation of Bank of Madura For over 57 years, Bank of Madura (MoM) operated as a profitable entity in Indian Banking Industry. It had a significant coverage in the southern states of India. It had extensive network of 263 branches across India. According to Murthy (2007), the bank had total assets of Rs. 39.88 billion and deposits of Rs. 33.95 billion as on September 30, 2000. It had a capital adequacy ratio of 15.8% as on March 31, 2000. With a view to expanding its assets, client base and geographical coverage, ICICI Bank was scouting for private banks for merger. In addition to that, its technological up gradation was inching upwards at snail’s pace. In contrast, BoM had an

attractive business per employee figure of Rs. 202 lakh, a better technological edge, and a vast base in southern India as compared to Federal Bank. While all these factors sound good, a tough and challenging task in terms of cultural integration and human resources issues lay ahead for ICICI Bank. With these considerations, ICICI Bank announced amalgamation with the 57 year BoM, with 263 branches, out of which 82 were operating in rural areas; the majority of them were located in southern India. As on December 9, 2000, on the day of announcement of the merger, the Kotak Mahindra group was holding about 12% stake on BoM, the Chairman of BoM, Mr. K. M. Thaigarajan, along with his associated, was holding about 26% stake, Spic group had about 4.7%, while LIC and UTI were having marginal holdings. This merger was supposed to increase ICICI bank’s hold on the South Indian market. The swap ratio was approved to be at 1:2.

Takeover of Standard Chartered Grindlays Bank’s Two Branches ICICI Bank acquires Shimla and Darjeeling Branches from Standard Chartered Grindlays Bank Ltd. in these two most sought after tourist destinations in the Himalayas. In a telephonic conversation, ICICI Bank ED Chanda Kochhar told to Economic Times from Mumbai that the bank has been planning to grow its network countrywide, and "this acquisition is one step in that direction and a continuation of our strategy to expand our brand of technology banking". ICICI Bank senior vice-president and regional head, Chandigarh, Anand Kumar revealed that the Shimla branch had more than 3,000 retail accounts and a deposit base of Rs 41 crore.

6. Amalgamation of Sangli Bank Sangli Bank Ltd. was an unlisted private sector bank headquartered at Sangli in the state of Maharashtra, India. As on March 31, 2006, Sangli Bank had deposits of Rs. 20.04 billion, advances of Rs. 8.88 billion, net NPA ratio of 2.3% and capital adequacy of 1.6%. In the year ended March 31, 2006, it incurred a loss of Rs. 29 crore. Sangli Bank had 198 branches and extension counters, including 158 branches in Maharashtra and 31 branches in Karnataka. Approximately 50% of the total branches were located in rural and semi-urban areas and 50% in metropolitan and urban centres. The bank had approximately 1,850 employees. The Board of Directors of ICICI Bank Ltd. and the Board of Directors of The Sangli Bank Ltd. at their

respective meetings approved an all-stock amalgamation of Sangli Bank with ICICI Bank on December 09, 2006. The amalgamation was subject to the approval of the shareholders of ICICI Bank and Sangli Bank, Reserve Bank of India and such other approvals required. The deal was in the ratio of one share of ICICI Bank for 9.25 shares of the privately-owned, non-listed Sangli Bank. The Bhate family of Sangli almost hold 30% of Sangli Bank. The proposed amalgamation was expected to be beneficial to the shareholders of both entities. ICICI Bank would 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 were 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 also provided new opportunities to Sangli Bank’s employees, and gives its customers access to ICICI Bank’s multi-channel network and wide range of products and services. The provisions of Section 44(A) of the Banking Regulation Act, 1949, governed the proposed amalgamation. The proposed amalgamation had the approval of the respective Boards of ICICI Bank and Sangli Bank and to become effective, required the consent of a majority in number representing two-thirds in value of the shareholders of ICICI Bank and Sangli Bank, present in person or by proxy, at their respective meetings called for this purpose, the sanction of Reserve Bank of India by an order in writing and sanction or approval, if required, under any law or regulation, of the Government of India, or any other authority, agency, department or persons concerned

Bank of Rajasthan to merge with ICICI Bank in Business Standard :Bank of Rajasthan (BoR) is set to merge with ICICI Bank, the country’s largest private sector lender. Under the deal, ICICI Bank would give 25 shares for 118 shares (1:4.72) of BoR. The proposal was approved in-principle by the boards of the two banks. In a statement, ICICI Bank said it had entered into an agreement with certain shareholders of BoR. The swap indicates that ICICI bank is paying a 90 per cent premium over BoR stock’s closing price of Rs 99.50 on the Bombay Stock Exchange on Tuesday. The BoR stock touched a 52-week high on Tuesday, soaring 20 per cent. ICICI Bank’s shares closed 1.45 per cent lower at Rs 889.35 on a day when the benchmark Sensex rose by 0.24 per cent.“The valuation implied by the share exchange ratio is in line with the market capitalisation per branch of old private sector banks in India,” ICICI Bank said in the statement. “It also compares favourably with relevant precedent transactions. The final determination of the share exchange ratio is subject to due diligence, independent

valuation and approvals.” Due diligence and valuation by an independent valuer will be undertaken now.BoR Managing Director G Padmanabhan said after the board meeting that Haribhakti & Co has been appointed jointly by both the banks to assess the valuation.The banks would seek regulatory approval from the Securities and Exchange Board of India (Sebi) as well as the Reserve Bank of India at an appropriate time, he said, adding that the “swap ratio was not discussed at the board meeting”.The move to merge BoR with ICICI Bank comes in the wake of regulatory pressure mounted on the Tayals, who according to Sebi, hold nearly 55 per cent stake in the bank. At the end of 2009, the promoters held a 28.6 per cent stake in the bank, according to stock exchange data. Nearly 100 entities related to the Tayals were barred from dealing in securities. BoR has a market capitalisation of Rs 1,600 crore compared with ICICI Bank’s Rs 99,000 crore. It reported a net loss of Rs 44.7 crore for the quarter ended December 2009 on a revenue of Rs 344.83 crore.In terms of assets, ICICI Bank is around 25 times as large as BoR. In terms of branch network, BoR with 463 branches, is less than one-fourth of ICICI Bank’s network.Analysts said the takeover would help ICICI Bank in expanding its footprint further, which is in line with its new-found branch-focused strategy. As most of BoR branches are concentrated in northern India, ICICI Bank would gain deeper access in these markets.Since 1997, when it acquired ITC Classic, ICICI Bank has periodically merged banks with itself to increase its reach.P K Tayal, the main promoter of BoR said the deal was a win-win solution for everyone and the agreement with ICICI Bank envisaged that the bank’s employees would get the same position in the merged entity.While analysts do not expect an adverse impact of the merger on ICICI Bank, they were worried about the lack of clarity on the legal liabilities of BoR.They, however, said that based on December numbers, bad debts appeared to be under control for

BoR.“But given that the fourth quarter numbers are not announced for Bank of Rajasthan, and the controversy shrouding it, there are some worries,” said an analyst at a large Indian brokerage.While Tayals have been under regulatory scanner for a while, pressure intensified earlier this year when Sebi accused them of misleading investors about the shareholding pattern of the bank.In February, RBI also slapped a fine of Rs 25 lakh on the bank following violations related to know-your customer (KYC) guidelines, acquisition of immovable property, deletion of records in the bank’s IT system, irregularities in the conduct of accounts for certain companies and for failure to present documents to the regulator. It has also ordered a special audit of the books of the bank, after it found lapses in corporate governance and disclosure norms. Subsequently, the Tayals, who have been under pressure to lower their stake in the bank to RBIprescribed level of 10 per cent, were forced to start looking at options to exit BoR.