Profile of ICICI Bank

First Indian bank to list on the New York Stock Exchange with US
GAAP accounting.
Establishment: In 1994 by Industrial Credit and Investment
Corporation of India (ICICI) as a new generation private sector bank.
Asset Base: Over Rs.12, 000 crore
Capital Adequacy ratio: 19.6 percent.
Distribution reach and automation: Technology- driven business
growth with 104 branches, 366 ATMs (as on 7 December 2000),
Employees: Total strength of around 1500 all of whom are computer
literate.
Profile of Bank of Madura (BoM)

A south India based well established bank
Establishment: in 1943 with a track record of 57 years with strong brand
equity,
Asset base: over Rs.4,400 crore
Capital Adequacy Ratio: 14.25 %
Distribution reach (financial year 2000) and automation: 263 banking
branches; 182 branches in Tamil Nadu with 1.2 million customer accounts;
132 computersied branches ,47 branches networked through VSATs.
Employees: Total strength of 2577 of which 2000 employees were
computer literate of whom nearly half were clerks and around 350 were
subordinate staff.
Unionized bank

Other Key Factors
Key Factors Bank Of Madura ICICI Bank
Branch Network 263 branches 106 branches
Total Assets 39.88 billion 120.63 billion
Deposits 97.28 billion 36.31 billion
Return on Assets(ROA) 1.2 lakhs 87000
Business per employee 2.02 crore 5.94 crore
Profit per employee 1.73 lakhs 7.83 lakhs
No. of employees 2600 1800
Important Financial Ratios Analyzed for Swap Ratio Derivation
Bank of Madura ICICI Bank
NPA 4% 1.3%
Last dividend paid 55% 15%
Earning per share Rs.44 Rs.7
Book value (as on 30
th
September 2000) Rs.206 Rs.62
Market price of share before the merger
(7 December at NSE closing price)
Rs.122, 45 152.95
Profit after Tax (financial year 2000) Rs.456 million Rs.1,053 million
Swap Ratio Announced (no. of shares)
Bank of Madura ICICI Bank
1 2
Strategies of the Banks
ICICI Bank Bank of Madura
Objective Profitability Development and social
Interests of Shareholders Priority sector
Strategies Pro-active Passive
Segment Target Banking Mass Banking
NPA mgt Recovery mgt. cell Credit monitoring cell
Concentration Investments Advances
HR Policy Hire & Fire Job security
Synergies of Merger
Financial capability
Branch network
Customer base
Technology edge
Priority sector advances
Equity capital and EPS
Larger amount of low cost deposits
Knowledge oriented employee base
Challenges Envisaged
Managing Client base
Managing Rural branches
HR Challenges
Size of ICICI nearly 3 times of BOM, yet staff strength was 1400 as against
BOMs 2500.
Large differences in profiles, grades, designations and salaries of personnel
of the two entities.
Uneasiness among the staff of BOM.
Difference in working culture.
Difference in performance management system

Post merger BOM employee behavioral pattern
PERIOD EMPLOYEE BEHAVIOR
Day 1 Denial, fear, no improvement
After a month Sadness, slight improvement
After a Year Acceptance, significant improvement
After 2 Years
Relief, liking, enjoyment, business development
activities
MANAGING HR DURING THE ICICI-BoM
MERGER
THE HR BLUEPRINT
AREAS OF HR INTEGRATION
FOCUSSED ON
A data base of the entire HR
structure
Road map of career
Determining the blue print of
HR moves
Communication of milestones
IT Integration - People
Integration - Business
Integration.

Employee communication
Cultural integration
Organization structuring
Recruitment &
Compensation
Performance management
Training
Employee relations
Golden Handshake
VRS announced in 2003 to shed the excess existing manpower
Eligibliity: Age atleast 40 years and completed 7 years of service.
3 months salary offered for every completed year of service or the residual
value, whichever is lower.
Medical benefits for employees and family continue till retirement.
Part waiver of home loans. set off against VRS package.
Outgo towards ERO 150-160 crores.
Reduce the staff strength from 11000 employees to 9600.
Appropriate staffing plans for replacement of retiring employees in key
positions