ICICI Group

Current Economic Environment GDP growth 7.9% as on Sep-09 Industrial production grew by 9.1% in Sep-09 Strong capacity utilization in key sectors like steel,

aluminum & cement Comfortable systemic liquidity : Approximately Rs.1 trillion

lent to RBI on daily basis

Current Economic Environment RBI’s projection for credit / deposit growth for FY 2010 is

18% Increased momentum in home & car sales in the period Q2-

FY10 Increased card spending Growth in economy backed by domestic demand

Indian Banking IndustryINDIAN BANKINGSYSTEM

SCHEDULEDCOMMERCIALBANKS (96)

REGIONAL RURAL BANKS (86)

LOCAL AREAS BANKS (4)

COOPERATIVE BANKS (97782)

PSU BANKS (27)

PRIVATE BANKS (31)

FOREIGN BANKS (38)

NBFC (12740)

URBAN BANKS (1721)

RURAL BANKS (96061)

• The above structure shows number of entities of each type

• ICICI Bank is a Scheduled Private Commercial Bank

Indian Banking Industry

I nstitution AssetsSCBs 86.45%Regional Rural Banks 2.41%Local Area Banks 0.01%Cooperative Banks 9.55%NBFC 1.58%

• Total asset size : INR 60 trillion• Total deposit size : INR 45 trillion

Indian Banking Industry

Asset size of SCBs (Scheduled Commercial Bank) : INR 52 trillion

Asset size of Private SCBs : INR 11 trillion Total SCB branches : 64608 Total SCB ATMs : 43651

ICICI…an overview

India’s second largest bank with total assets worth INR 4 trillion

Present in 18 countries 1548 branches and 4816

ATMs Stock listed on NSE, BSE.

ADRs listed on NYSE

ICICI…an overview

10 domestic subsidiaries and 7 international subsidiaries

Key businesses : Retail banking, Corporate & SME Banking, Project finance, International banking, Rural & Agri Banking, Life/general Insurance, venture capital, Asset management & securities trading

Total number of employees : 35000 Net income : INR 160 billion Consolidated PAT : INR 36 billion

Key Domestic Subsidiaries

Strategic milestones Banking corporation setup by ICICI in 1994. Acquired Bank of Madura in 2001 New entitity formed by reverse merger of ICICI with ICICI

Bank in 2002 Opened subsidiaries in UK & Canada in 2003 Setup representative offices in Singapore, Dubai and China

in 2003

Strategic milestones Representative offices setup in Bangladesh & South Africa Commenced it’s Russian operations in 2005 by taking over

Investitsionno Kreditny Bank Opened offices in Belgium & Germany in 2007 Launched it’s tremendously successful pure online savings

brand ‘HiSAVE’ in UK & Canada in 2006. Acquired Sanglii Bank in 2007 with it’s 198 branches and

888 crore of deposits

Strategic milestones

Commenced branch operations in NewYork in 2008 Hived the Point of Sale (POS) terminal business to FirstData

corp for $80 million to unlock the value for shareholders Received full service bank approval from Singapore Govt. to

setup 20 branches Stake sale in 3i Infotech and Firstsource solutions on cards

Key Ratios

Downturn in certain key ratios due to economic environment in FY-09.

Ratio FY-08 FY-09Return on average equity 11.1 7.7Return on average assets 1.1 1Earnings per share 39.4 33.8Book value per share 417.5 444.9Fee to income 41.6 41.4Cost to income 50 43.4Net Interest Margin 2.2 2.4

Key Ratios – Comparison to Industry

CASA, Credit quality emerge as clear focus areas

Conserving capital, optimising costs required for higher profitability

The Bank adopted the ‘4C STRATEGY’ for FY-10

Metric I CI CI SCBCASA ratio 28.79% 33.20%Net Interest Margin 2.40% 2.40%Capital Adequacy ratio 15.50% 13.20%Net NPA 2.11% 1.10%Operating profit 2.33% 2.10%

CASA : Current/ Saving deposits to total LiabilitiesMandated Capital Adequacy : 9%NPA : Non performing assets

The 4C Strategy

CASA Ratio improvement

CREDIT qualityimprovement

CAPITALconservation

COST optimization

4C4C

Key enablers to 4C

4C

CASA Credit quality Capital Lean Costs

40% increase in branch base targeted for FY-10 Thrust on new account sourcing through branches Increase in wallet share by cross-selling at various contact

points Muted growth on wholesale banking to reduce high cost

liabilities

Key enablers to 4C

4C

CASA Credit quality Capital Lean Costs

In housing collection for specific products and NPA buckets Dedicated pre delinquency management Changes in field agency management Moderated disbursement of personal loans & credit cards

Key enablers to 4C

4C

CASA Credit quality Capital Lean Costs

Adherence to Basel norms High capital adequacy maintained vis-à-vis competitors Measured capital expenditure

Key enablers to 4C

4C

CASA Credit quality Capital Lean Costs

Reduction in account sourcing costs by focusing more on branches vis-à-vis Direct Marketing Agencies

Slowdown on hiring, wages & promotion to reduce wage costs

Focus on realignment of existing workforce

The 4C effect as on Q2…

Net interest margin increase by 10 basis points to 2.5% 28% increment in low cost CASA ratio at 36.9% Capital adequacy enhancement to 17.7% vs. BASEL II

requirement of 13.3% Net NPA in control at 2.19%

SWOT analysisSTRENGTHS

Largest Private Sector Bank in India Large retail franchise base 24*7 support via ATM, Callcentre & Internet Diverse product portfolio covering almost all financial needs International expansion supporting profitability

WEAKNESS

Over dependence on domestic market for major revenue High levels of Non performing assets Brand value erosion due to slew of media reports ranging from Bank’s recovery practices to exposure to subprime assets

OPPORTUNITIES

Rural financing & Loans to small enterprises Growth in general insurance market

THREATS

Banking reforms enabling foreign banks to gain more business

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