ICICI Bank today

Agenda

Retail banking
Corporate banking & structured finance

Merger process
Financial performance

 Large capital base

ICICI Bank today

Indias largest private sector bank and one stop financial solutions provider with a diversified and derisked business model

Vast talent pool

Low operating costs Technology focus Strong corporate relationships

ICICI Bank today (contd.)

Diversified portfolio
March 2001- Proforma merged March 2002- Merged
5% 7% 23%

33%

Pro ject finance Co rp o rate finance Retail finance

12% 4% 12% 3% 36%

Reserves & cash Investments Other assets

34% 8% 23%

Rs. 931.50 billion

Rs. 1,041.10 billion

the asset composition change on account of statutory requirements and increase in retail assets is contributing to derisking the portfolio
4

Online Products
Bill Junction Utility bill payments Pay Seal electronic payment system Corporate Infinity online transfer/ settlement system

e-banking in ICICI

ICICI Markets online FX, Debt, SME Portal

ICICI Direct and ICICI Select

Business Multiplier web interface

ICICI Bank today (contd.)

ICICI Bank is well positioned to redefine the banking model by focussing on the untapped potential in the profitable retail business segments and leveraging its superior delivery capabilities and lower operating costs in the under-served corporate banking business

Retail banking

Corporate banking

Structured finance

ICICI Bank today

Contents

Retail banking
Corporate banking & structured finance

Merger process
Financial performance

Size
500 400

Retail loan disbursements

CAGR 32%
350.00 450.00

220. 00

(Rs. in billion)

300 200 100

260.00

180. 00

130. 00 230. 00

130. 00 0 2000
ICICI estimates

170. 00

2001 Mortgages Other retail loans

2002

Despite the fast growth, the Indian retail market continues to be under-penetrated in comparison to its peers
8

Household segment migration

No. of households (million)
CAGR 48%
6.8
22.9

2.1

1996 Rich (> Rs. 0.5 mn p.a.) Mass (Rs. 0.1-0.3 mn p.a.)

1999

2002

Mass affluent (Rs. 0.3-0.5 mn p.a.)

Source: 1996, 1999 data is from NCAER study for top 24 cities, 2002 data is estimated by ICICI Bank

ICICI Banks strategy to capture retail potential Strong corporate

relationships

Brand Achieving leadership in retail financial services Technology

Operational excellence

the core of this strategy is our relentless focus on the customer and cross-selling of products

10

Catalyzing cross-sell

Internet Banking

Call Centers

500 Outlets

1005 ATMs

Customized cross-selling by leveraging relationships, brand and technology

Fixed deposits Power Pay

Bonds Consumer loans

Life insurance Auto & home loans

Health insurance Credit & debit cards

11

Operational excellence
Prudent credit policies

Bolstered by a company wide 6 sigma initiative

Adequate fraud control

Rigorous collection mechanism

These measures have ensured that we have followed a cautious approach while maintaining high growth rates and profitability in all segments
12

Our growth in retail (contd.)

Outstanding loans

80 70 60 50 40 30 20 10 -

79.86

(Rs. in billion)

Growth rate 167%

Home loans grew at

5 1 .3 4
30.73

2 2 .1 2
5.15

8 .6 1

2 8 .5 2

230% in FY 2002 Amongst the leading providers of home loans in India Other retail loans grew at 130% in FY 2002

2000 2001 2002 Ho m e lo ans Other retail lo ans

Home & others

Bank accounts

Credit cards

13

Our growth in retail (contd.)

Int e rne t ba nk ing c us t o m e rs B a nk c us t o m e r a c c o unt s

5 4
3 .2

5 .0

Bank accounts grew at

3 2 1

(million)

53% in FY 2002 Internet customer accounts grew at 100% in FY 2002

Comprised 25% of bank

accounts
1 .2 0 .6 0 .3 0 .1 0 .6

Among top twelve

1999 2000 2001 2002

internet banks in the world

Home & others

Bank accounts

Credit cards
5.0 14

Our growth in retail (contd.)

N um be r of cre dit cards

0. 8
Growth rate 100%

0.6

(million)

0. 5
0.3

0. 3

2000 2001 2002

Home & others

Bank accounts

Credit cards

15

In summary
Mortgages
Other retail loans

Credit cards

Nascent ICICI Bank analysis -

Developing

Matured

Commoditized

For mortgages & other retail loans: Nascent <1% of GDP, Commoditized >30% of GDP. For credit cards: Nascent <0.1% penetration, Commoditized > 50% penetration

We entered the retail market at the beginning of the growth stage and are now harnessing the untapped potential in all the profitable business segments
16

ICICI Bank today

Contents

Retail banking
Corporate banking & structured finance

Merger process
Financial performance

17

Corporate banking and structured finance Maximize value of client relationships

Leverage

technology to enhance delivery capabilities portfolio management

Strategy

Proactive

For efficient capital utilisation and lower balance sheet exposure

The aim is to provide state-of-the-art, low cost and efficient banking services, with a focus on increasing fee-based income
Corporate Banking Structured Finance

18

Corporate banking and structured financeproducts and services Grow market share in fee-based
4%

Fee market size

51%

Corporate Retail

13%

Government Forex Overseas branches

14% 18%

Market size: Rs. 111.10 billion

Corporate Banking

Structured Finance

19

Corporate banking and structured finance

Corporate

Solutions Group

Reach the entire universe of current and potential clients (over 1300) and offer tailor-made solutions

Government

Solutions Group

Strategy

Develop comprehensive banking relationships with all central, state and local governmental entities

Small & Medium Enterprises Group

Develop comprehensive banking relationships with small & medium sized enterprises leveraging corporate linkages Focus on agri-lending to help in compliance with priority sector norms

Corporate Banking

Structured Finance

20

Corporate banking and structured finance

Leverage

Strategy

expertise to facilitate loan origination and ensure sell down leading to Reduced concentration of risk Optimal risk-return trade-off pursue cross-sell opportunities for all ICICI group products

Aggressively

Significant opportunities for funding well-structured projects with in-built risk mitigation Corporate Banking Structured Finance

21

Corporate banking and structured finance

Infrastructure

Projects Group

Create a balanced portfolio across sub-sectors

Telecom, Power, Transportation, Urban Infrastructure

Strategy

Focus on non-fund based activities

Manufacturing

Projects Group

Consolidation and modernization in core sectors

Cement, Steel, Textiles, Chemicals Oil & gas, Mining, Retail, Agri infrastructure

Structured opportunities in certain emerging sectors

Corporate Banking

Structured Finance

22

ICICI Bank today

Contents

Retail banking
Corporate banking & structured finance

Merger process
Financial performance

23

In conclusion

Having complied with all regulatory requirements, the merged entity, with an established brand and strong technology focus, is now well placed to harness the vast retail potential and consolidate its position in corporate banking to emerge as the leading financial solutions provider in India

24

Present Scenario
Indian retail banking has been showing phenomenal growth In 2004-05, 42% of credit growth came from retail Over the last 5 years CAGR has been over 35% Retail credit levelcrossed Rs.189K Crore in 2004-05 Market has transformed into a buyers market from a sellers market Comprises of multiple products, channels of distribution and multiple customer groups

Industrys response to the change

Any where, Any time Banking Improved processes/Bundled product offerings Faster service/Reduced TATs Customer specific products/offerings on a regular basis Bank customer has replaced Branch customer Focus on understanding customer needs/ preferences Segmentation/Differentiation of customers Customer driven strategies Building relationships

Future Of Retail Banking

The accelerated retail growth has been on a historically low base Penetration continues to be significantly low compared to global bench marks Share of retail credit expected to grow from 22% to 36% Retail credit expected to grow to Rs.575,000 crs by 2010 at an annual growth rate of 25%
Source: Cygnus industry insight

Strategies for Future

Reaching to masses : Need to customize Customer segmentation/differentiation

Data mining/CRM based campaigns

Products per customer/loyalty Promoting low risk retail lending products Offer an array of products and financial advisory.