News Release
Mumbai, December 11, 2000
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 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)
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: bhashyams@icicibank.com
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.