Item 3
ICICI Limited
ICICI Bank Board Approves Merger of Bank of Madura with ICICI Bank
The Boards of ICICI Bank Limited and Bank of Madura Limited met today at Mumbai
and Chennai respectively and separately approved the merger of Bank of Madura
Limited with ICICI Bank Limited (NYSE: IBN). The Scheme of Amalgamation
envisages a share exchange ratio of two shares of ICICI Bank for one share of
Bank of Madura. The share exchange ratio approved by the respective Boards was
based on recommendations made by M/s. Deloitte, Haskins & Sells, which acted as
independent valuers to the transaction.
The Scheme of Amalgamation will be placed for approval at the meetings of
shareholders of the two banks on January 19, 2001 and will be subject to
approval of the Reserve Bank of India. The Appointed Date of merger is proposed
to be February 1, 2001.
DSP Merrill Lynch Limited acted as advisor to Bank of Madura for the
transaction. Kotak Mahindra Capital Company will advise ICICI Bank on the
merger process.
"This merger is full of possibilities. The large customer base, geographical
reach and infrastructure managed by trained personnel would help us accelerate
our growth plans," said Mr. H. N. Sinor, Managing Director and CEO, ICICI Bank.
According to Dr K. M. Thiagarajan, Chairman of Bank of Madura, "merger with a
new private sector bank, particularly a financially and technologically strong
bank like the ICICI Bank should add to shareholder value and enhance the career
opportunities for our employees besides providing first rate, technology-based,
modern banking services to customers."
A proforma analysis of the merged bank shows that the merger is EPS accretive
for ICICI Bank shareholders by 23% based on September 2000 half-year results
(Rs 7.1 per share (annualised) to Rs. 8.7 per share (annualised) proforma for
the merged entity). On proforma basis, as on September 30, 2000, the merged
entity will have total assets of Rs. 160.51 billion and deposits of Rs. 131.23
billion.
Synergies in Operations
Considerable synergies are expected to accrue from the combination of ICICI
Bank and Bank of Madura as they bring together complementary business strengths
which would enhance product portfolio, distribution network and brand image.
The merged entity will have around 2.6 million customer accounts and an
extensive network of about 350 branches spread across India, giving it the
critical mass in an intensely competitive banking arena. The expanded customer
base and distribution network of the merged entity would provide considerable
cross-selling opportunities enhancing the universal banking strategy of ICICI
Bank. The enlarged distribution network also offers scope to enhance fee income
particularly in core areas like cash management services, a traditional
strongpoint of both banks and payment and collection services.
Bank of Madura has a number of branches in upcoming semi-urban and rural areas
and has developed robust micro-credit systems which combined with the strong
brand image of ICICI Bank can be successfully leveraged to tap rural markets.
The merger also offers larger amount of low cost deposits and possibility of
reorienting assets profile to enable better spreads for the merged entity.
The focus of both banks on developing a knowledge-oriented employee base with a
strong focus on technology will facilitate the process of post merger
integration.
About Bank of Madura
Bank of Madura is a profitable and well-capitalised private sector bank, in
operation for 57 years with a national network of 263 branches including
presence in each of the top 30 banking centres in the country. The Bank has
fostered an environment akin to new private sector banks with a progressive
employee base and technology driven operations in major branches. It has among
the lowest cost of
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deposits at 7.3% and a high return on equity of 21.3%. As on September 30,
2000, the Bank had total assets of Rs. 39.88 billion and deposits of Rs 33.95
billion. In India, the Bank's equity shares are listed on the Stock Exchanges
at Mumbai and Chennai and the National Stock Exchange.
About ICICI Bank
ICICI Bank is a leading technology-oriented private sector bank, promoted by
ICICI Limited (NYSE: IC). ICICI Bank had total assets of Rs. 120.63 billion and
deposits of Rs 97.28 billion as on September 30, 2000. The Bank's capital
adequacy as on September 30, 2000 stood at 17.59 %. The Bank's network of
branches and extension counters presently covers 106 locations across India.
ICICI Bank is India's largest ATM provider with 366 ATMs. In India, the equity
shares of ICICI Bank are listed on the Stock Exchanges at Mumbai, Calcutta,
Delhi, Chennai, Vadodara and the National Stock Exchange. ICICI Bank's American
Depositary Shares (ADS) are listed on the New York Stock Exchange.
Summary Profit & Loss Statement - Bank of Madura
(Rs in Crore)
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H1 -2001 FY 2000 FY 1999
(unaudited)
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Interest income 201.51 370.21 323.21
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Other Income 45.31 98.72 98.57
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Total income 246.82 468.93 421.78
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Interest Expenditure 134.50 266.09 255.16
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Operating Expenditure 60.50 107.39 105.70
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Total Expenditure 195.00 373.48 360.86
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Gross Profit before Tax and Provisions 51.82 95.45 60.92
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Provisions (Incl. of Income Tax) 25.58 49.87 30.79
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Net Profit 26.24 45.58 30.13
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Paid-up Equity Share Capital 11.77 11.77 11.77
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Reserves (excl. Reval. Reserves) 230.17 203.93 165.66
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Total Deposits 3394.84 3631.04 3013.11
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Advances (Incl. Credit Substitutes) 2210 2072 1746
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Summary Profit and Loss Statement - ICICI Bank
(Rs in Crore)
---------------------------------------------------------------------------
H1 -2001 FY 2000 FY 1999
---------------------------------------------------------------------------
Interest income 570.90 852.87 544.05
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Other Income 65.35 194.05 89.03
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Total income 636.25 1046.92 633.08
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Interest Expenditure 389.55 666.95 425.52
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Operating Expenditure 126.29 153.31 82.97
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Total Expenditure 515.84 820.26 508.49
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Gross Profit before Tax and Provisions 120.41 226.66 124.59
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Provisions (Incl. of Income Tax) 50.21 121.36 61.24
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Net Profit 70.20 105.30 63.36
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Paid-up Equity Share Capital 196.82 196.82 165.00
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Reserves (excl. Revaluation Reserves) 1022.89 952.69 143.33
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Total Deposits 9728.27 9866.02 6072.94
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Advances (incl. credit substitutes) 6324.20 5030.96 3387.60
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For further press queries, contact:
P. H. Ravikumar - (91)-22-653 8413 or 653 8433
For investor queries, contact:
Bhashyam Seshan
Phone: (91)-22-653 8420 or 653 7460
E-mail: [email protected]
Note: (a) Rs. = Indian Rupees (b) 1 Crore = 10 million
Except for the historical information contained herein, statements in this News
Release which contain words or phrases such as 'will', 'would', 'aim',
'likely', 'will likely result', 'believe', 'expected', 'will continue',
'anticipate', 'estimate', 'enable', 'enabling', 'intend', 'plan',
'contemplate', 'seek to', 'future', 'objective', 'goal', 'project', 'should',
'will pursue' and similar expressions or variations of such expressions may
constitute 'forward-looking statements'. These forward-looking statements
involve a number of risks, uncertainties and other factors that could cause
actual results to differ materially from those suggested by the forward-looking
statements. These risks and uncertainties include, but are not limited to our
and ICICI Group's ability to obtain statutory and regulatory approvals and to
successfully implement our strategy and the merger, future levels of
non-performing loans, our growth and expansion in business, the adequacy of our
allowance for credit losses, technological implementation and changes, the
actual growth in demand for banking products and services, investment income,
cash flow projections, our exposure to market risks as well as other risks
detailed in the reports filed by us with the United States Securities and
Exchange Commission. ICICI Bank undertakes no obligation to update
forward-looking statements to reflect events or circumstances after the date
thereof.
December 11, 2000.
END
