icici+final

7/29/2019 Icici+Final.

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In the small town of Valsad in Gujarat

7 pm: Nihar Patnaik, Branch Manager of Valsad ICICI Bank, notices theunusually long queue in front of the ATM counter of the branch

11 pm: The queue gets longer. After withdrawing funds customers are busysending Group SMS to their friends and relatives about the imminentcollapse of ICICI Bank. ICICI bandh thai rahiyu che warns the SMS.

Ahmedabad, 6.30 am: Customers cant wait. ICICI Banks ATMs arespitting out money as never before. Why take chances? asks one.

April 10, 2008

April 11, 2008

Surat, 7 am: Retired school teacher, Ramniklal Mehta reads local Gujaratinewspaper which says ICICI Bank is in trouble and customers are rushing towithdraw funds in Valsad.

By 7.25 am, Mehta joins the long queue at the ATM.


2/20

Vadodara, 10 am: All banks are closed due to Ram Navami and ICICI Bankfails to realise the early warning signals. Almost all 115 ATMs in the state arenow spewing out money and customers are wary. Telephone calls are madeto friends and relatives all over the country as the rumour spreads like wildfire.

Gandhinagar, 1 pm: Despite the scorching 40 degree heat, BSNL employeeBharatbhai Patel who has a salary account with ICICI Bank stands in thequeue. He wants to reduce his exposure from Rs 50,000 to Rs 5,000. TheATM machine refuses. Patel gets panicky. So are rest of the customerspresent there.

Surat, 4 pm: Customers start rioting as ATMs run out of money. Full-lengthglass windows of ICICI Banks are broken as police steps in.

April 11, 2008


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By 12 midnight, the crisis team decides to issue a press statement affirming thesolvency of the bank. Many newspapers miss the statement.

Mumbai, ICICI Headquarters, Bandra-Kurla Complex, 7 pm:

Retail Banking Executive Director, Chanda Kochhar informs CEO and MD, K VKamath, Joint MD S N Sinor, and Executive Director, Kalpana Morparia about theGujarat crisis.

New Delhi, 11.30 pm: By Saturday evening, Delhi alone would withdraws Rs 15

crore extra as compared to normal withdrawals of Rs 5 crore.

Saturday, April 12, 7 am: Morparia calls up RBI Deputy governors, Vepa Kamesanand G P Muniappan and asks them to help out. Dr Bimal Jalan gets a call inWashington about the crisis. The RBI issues a statement within two hours indefence of ICICI Bank.

April 11, 2008


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Mumbai, 12 pm: Borivali branch witnesses massive crowd since it opened for

business at eight in the morning. Customers line up to withdraw funds throughcheques as wells as ATM cards. Some customers even fight and abuse bankofficials. They charge me Rs 25 even for a single sheet of bank statement... whyshould I be loyal to this bank? asks a customer. Police called in to maintain lawand order.

Ahmedabad, 5 pm: By now, ICICI Banks armoured vehicles have transportedcash worth crores from RBI vaults to its 35-odd branches and ATMs. Constantrefilling helps to restore confidence among customers. Almost Rs 550 crore isphysically moved around the country to refill ATMs, bank branches. Bank pastesnotice that in spite of holidays it will remain open for business even on Sundayand Monday. Many customers return home.

Valsad, 7 pm: The run on ICICI Bank peters out and branch manager Patnaiktakes a sigh of relief.

April 12, 2008


5/20

Review of ICICI Banks Strategy to

Restore Customer Confidence duringCrisis


6/20

Flow

About ICICI Major Competitors

Financial Structure

Pre-Crisis mktg strategy

Crisis Impact of Crisis on ICICI

Post-crisis mktg strategy

Impact of customer confidence

Steps taken to restore customer confidence Analysis of the strategy

Our Suggestions


7/20

ICICI Bank

ICICI Bank is India's second-largest bank

Largest private sector Bank in India

Total assets of Rs. 3,674.19 billion (US$ 77

billion) as of June 30, 2009

Profit after tax Rs. 8.78 billion for thequarter ended June 30, 2009

ICICI Bank has a network of 1,499branches and about 4,816 ATMs in India

Presence in 18 countries across the globe


8/20

Major Competition

Public Banks

State Bank of India

Bank of India

Bank of Baroda Central Bank of India

Union Bank of India

Canara Bank

Dena Bank

Allahabad Bank

And many others

Private & Foreign banks

HDFC

Axis Bank

IndusInd Bank Standard Chartered

HSBC

Yes bank

Barclays bank

Deutsche Bank

And many more


9/20

ICICI Bank Financial Snapshot

Dip in Performance in Quarter 4 FY09: Low margins.

International loan Book remains a Big Concern.

NPAs and Restructured Loans will Increase further.

Continued deterioration in assets quality. Balance Sheet size to contract.

Earnings likely to move Southwards in FY2010-11.

Business to go down in coming years. Advances and Deposits to slowdown in FY2010.

Rise in Provision & Contingencies.

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

4,500.00

2006 2007 2008 2009 2010(E)

Net Profits (In Crs.) Deposits (In 100 Crs) Advances (In 100 crs.)


10/20

Under Performed to its

Peers

Particulars ICICI Bank HDFC Bank Axis Bank Yes Bank

Loan Growth -3.00 56.00 37.00 32.00

Deposit Growth -11.00 42.00 34.00 22.00

Credit/Deposit Ratio 100.00 69.00 70.00 77.00

Net Interest Margin 2.60 4.20 3.40 3.00

Annualized RoE 6.20 17.60 25.10 21.80

Year of Year 31st March,2009

ICICI

Bank

StateBank of

India

HDFCBank

AxisBank

Bank OfBaroda

OtherPublic

Banks


11/20

Marketing Strategy

Introduced concept of branding in the Indian banking industry Process, People and Physical evidence brought to life by ICICI

Cash on the celebrity fever Introduced the concept of brand

ambassadors

Introduction of DSAs and DSTs

Unleashed the power of the internet introduced the concept of net

banking and e-mail marketing

First bank to focus on retail banking as a driver for growth

Comprehensive data centre availability & data protection solutions

Described by the competitors and industry expert in one word

Aggressive


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Focus areas of marketing

efforts Target marketing and customer acquisition

Share of wallet

Channel strategy and management

Relationship management and database marketing

Product development & innovation

Credit approval


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14/20

The Sub-prime Crisis

Loans offered at Higher Rates than Prime Lending Rates

Target audience was High Risk Potential Defaulters category

Attributes Unstable Incomes, Low Creditworthiness, Bad Credit

History

Companies went after the QuickBuck

Home loans were given at Floating Rates

Borrowers started defaulting due to higher EMIs leading to what we

know as The Sub-prime Crisis

Global banks including Citigroup, UBS, Barclays, HSBC etc. lost

amounts between 1-18 billion dollars as a result of this this crisis


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Sudden Death- Impact on ICICIBank Foreign operations of ICICI Bank reported MTM loss of INR

1060 crores

It was due to exposure to Credit Derivatives and Investments

ICICI Bank stated that the Sub-prime loss could wipe off upto

9% of years profit

Bank clarified that underlying securities would offset losses

ICICI Bank suffered a loss of around INR 300 crores in Q3 and

INR 250 crores in Q4

Bank Stated : remaining losses were notional


16/20

Impact of Crisis on ConsumerConfidence Customer flocking the branches and ATMs for

withdrawing deposits.

ICICI Bank borrows INR 2000 crore from RBI to

suffice customer withdrawals.

10th October: ICICI Bank script plunges 26% onSENSEX and NIFTY


17/20

Measures to RestoreConfidence13th October 08 : News

ICICI Bank asked Moodys and S&P to state that theywere in No-Risk Zone

RBI : ICICI Banks Capital adequacy better than SBI and

HDFC ICICI Bank files FIR against malicious SMS

Chanda Kochar : ICICI Bank has enough liquidity evenin International Operations

K V Kamath: Ignore rumors. ICICI Bank is safe Change in Brand tag line

Hum Hai Nato Vishwas hai to subh kuch hai


18/20

Suggestions

Prompt in disclosing the extent of foreign exposureand MTM losses

Financial rating agency like CRISIL and MODY

Get the management as well as the PM and financeminister across all format of media

Well planned and structured PR program which re-in

stores confidence among members.


19/20

Suggestions (Cont.)

Public Relation Plan1. Propagate the various initiatives taken and being

taken by ICICI BANK. SME programs, CSR, Housing,Education, Automobile etc initiatives under taken.

2. Create an Emotional chord with the citizen andinvestors of faith and trust.

3. Make aware the various accomplishments and thesuccess of ICICI BANK

4. Come up with new sponsorship programs to boostmarket sentiments

5. Role of ICICI BANK in making India the 2nd fastestgrowing economy.


20/20

Thank You

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