x Filed by ICICI Bank Limited
Pursuant to Rule 165 and Rule 425
under the Securities Act of 1933
Subject Company: ICICI Limited
Commission File No. 001-14954
On October 25, 2001, ICICI Bank and ICICI Limited held a meeting
for the investment community to discuss the merger of ICICI Bank and
ICICI Limited. A copy of the slides shown at the meeting and
available on the wecast follows.
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[LOGO ICICI] [LOGO ICICI BANK]
The merger:
Agenda for the new millennium
October 25, 2001
Content
o The merger
o Transformation in the financial sector
o ICICI group today - a virtual universal bank o Rationale for merger
o Merger process
o Conclusion
o Summary of half yearly performance
o ICICI
o ICICI Bank
2
Transformation in the financial sector
Technology
Globalization Liberalization
...are bringing about a fundamental change in financial sector business models
3
Change in business models
Demanding and
sophisticated Globalization
customers
Emergence of integrated universal banks
Shareholder Technological
returns innovation
...as evidenced by the international precedents in universal banking
4
Universal Banks
[LOGO ABN AMRO] [LOGO CITIGROUP]
[LOGO DEUTSCHE BANK] [LOGO HSBC]
[LOGO UBS] [LOGO JPMORGAN CHASE]
...many international players have realized the benefits of universal banking
5
The benefits
o Economies of scale through volumes in
o Operating costs
o Technology deployment
o Economies of scope
o Large product suite
o Cross-selling potential
o Optimization of Human capital
o Optimization of Financial capital
...all leading to the development of a more robust financial system
6
ICICI has harnessed some of the above benefits by transforming itself into a
virtual universal bank over the last five years
7
ICICI group today - a virtual universal bank
Retail Financial Services Internet Corporate Financial Services
o B2B
o Consumer
Finance Portals
ICICI o Web Trade ICICI
o Venture Capital
ICICI Bank ICICI Bank
ICICI Capital ICICI Securities
ICICI Prudential ICICI Brokerage
ICICI Web Trade Technology Platforms ICICI Venture
o Payment Gateway
ICICI PFS o Customer Relationship ICICI Infotech
Management
ICICI Home o Financial Vertical ICICI Lombard
o Web Technologies
...based on key building blocks present across the group
8
Building blocks
ICICI group's strategy for success
Organizational Values The building blocks
Human Capital supplemented by
Speed Capital organizational changes
Brand Identity have created the right
Knowledge Capital combination for
Technology Capital achieving leadership
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ICICI's leadership
o With these building blocks ICICI has built its
o Strong brand identity
o Technology enabled delivery channels
o Largest network of ATMs in India
o Highest number of Internet banking registrations
o Large product suite
o Largest auto financier
o Largest incremental issuer of cards
o Credit cards, debit cards and ATM cards
o Amongst the first banks in India to commence lead generation for
Insurance products
10
Current operating environment
o Blurring of boundaries amongst financial intermediaries
o Increasing competitive pressures
o Universal banking provides competitive advantages in the current
environment through
o Large product suite
o Diversified resource base
o Economies of scale and scope
o Optimization of Human and Financial capitals
...providing a strong business logic for merger of ICICI and ICICI Bank
11
Strong complementary organizations
ICICI ICICI Bank
o Large capital base o Largest private sector bank
o Diversified and de-risked assets o Strong retail franchise
o Strong brand o Technology leader among banks
o Well established corporate
relationships
...having similar operating architecture, people and processes. This merged
entity is consequently well-positioned to harness synergistic advantages and
thereby provide benefits to both ICICI and ICICI Bank
12
Benefits of merger
ICICI
ICICI Bank
o "Forward leap" in the hierarchy of Indian banks
o A discontinuous jump in size and scale
o Achieve size and scale of operations
o Leverage ICICI's capital and client base to increase fee income
o Higher profitability by leveraging on technology and low cost structure
o Offer a complete product suite with immense cross-selling opportunities
o ICICI's presence in retail finance, insurance, investment banking and
venture capital
o Access to the ICICI group's talent pool
13
Benefits of merger
ICICI Bank
ICICI
o Improved ability to further diversify asset portfolio and business revenues
o Lower funding costs
o Ability to accept/ offer checking accounts
o Availability of float money due to active participation in the payments
system
o Diversified fund raising due to access to retail funds
o Increased fee income opportunities
o Ability to offer all banking products
Merged entity would have key competitive advantages and would be a more
efficient provider of capital
14
Competitive advantages of the merged entity
Vast
talent
pool
Large Technology
capital -enabled
base distribution
architecture
Complete Low
product operating
suite costs
Extensive
customer
relationships
& strong
brand
franchise
...after the merger, the combined entity would be the second-largest bank in
India, with an asset base of over Rs. 1 trillion
16
Merger process - highlights
o Valuation
o Independently appointed investment bankers
o ICICI - JM Morgan Stanley
o ICICI Bank - DSP Merrill Lynch
o Jointly appointed independent accountant to recommend the final exchange
ratio
o Deloitte, Haskins & Sells appointed
o Recommended one share of ICICI Bank for two shares of ICICI,
which was approved by the respective Boards
17
Merger process - highlights (contd.)
o Transfer of ICICI's shareholding in ICICI Bank to an SPV prior to the merger
o Divestment in FY2003 by way of appropriate placement
o Consolidation of retail operations
o Merger of ICICI PFS and ICICI Capital Services with ICICI Bank
Merger process - regulatory issues
o Merger effective on
o March 31, 2002 or the date of RBI approval, whichever is later
o Shareholders' approval
o High court approval
o Accounting for the merger in line with international best practices
o Purchase method, mandatory under US GAAP, to be adopted under Indian GAAP
as well
18
In conclusion
The merger will create a strong entity, which will redefine banking in the
highly competitive era of globalization and liberalization
19
[LOGO ICICI] [LOGO ICICI BANK]
Summary of half yearly performance
ICICI: Summary performance (Indian GAAP)
(Rs. in billion)
------------------------------------------------------------------------------------------------------------
Q2 Q2 Inc. (%) H1 H1 Inc. FY01
FY01 FY02 FY01 FY02 (%)
------------------------------------------------------------------------------------------------------------
Profit before tax 2.77 3.56 28.5 5.90 7.42 25.6 13.91(1)
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Profit after tax 2.54 2.82 11.0 5.41 6.08 12.2 13.51(1&2)
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Total assets 684.19 743.71 8.7 684.19 743.71 8.7 734.14
------------------------------------------------------------------------------------------------------------
Net NPA (%) 7.3 5.2 - 7.3 5.2 - 5.1
------------------------------------------------------------------------------------------------------------
Profit to equity holders increased by 16% in H1-FY02 (net of preference
dividend payout)
(1) After adding back accelerated provisions of Rs. 8.13 billion.
(2) Provision for tax for H1-FY02 has been made as per the new accounting
standard on deferred taxation.
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ICICI: Summary ratios (Indian GAAP)
-----------------------------------------------------------------------------
H1(1) H1(1) FY01(2)
FY01 FY02
-----------------------------------------------------------------------------
EPS (Rs.) 13.6 15.5 17.0
-----------------------------------------------------------------------------
Return on assets (%) 1.8 1.8 2.1
-----------------------------------------------------------------------------
Return on net worth (%) 13.5 14.7 16.4
-----------------------------------------------------------------------------
Overheads / Net income from operations(3) (%) 18.5 14.2 17.4
-----------------------------------------------------------------------------
Overheads / Average net assets (%) 0.6 0.5 0.5
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(1) Annualized
(2) After adding back accelerated provisions and write-offs of Rs. 8.13 billion
(3) Net income from operations includes net fund-based income, fees &
commissions and dividend income
22
ICICI: Consolidated profits (Indian GAAP)
(Rs. in billion)
--------------------------------------------------------------------------
H1 H1
FY01 FY02
--------------------------------------------------------------------------
Profit after tax of ICICI 5.41 6.08
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ICICI's share of income from
subsidiaries/affiliates 0.67 1.21
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Dividend elimination (0.36) (0.38)
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Consolidated profit 5.72 6.91
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21% increase in Indian GAAP consolidated profits
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ICICI: Consolidated profits (US GAAP)
(Rs. in billion)
---------------------------------------------------------------
H1 H1
FY01 FY02
---------------------------------------------------------------
Income before tax 5.33 5.38
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Net Income, after cumulative
effect of accounting change 4.50 5.01(1)
---------------------------------------------------------------
Total stockholder's equity 73.68 76.91
---------------------------------------------------------------
Total assets 685.32 755.88
---------------------------------------------------------------
(1) Net income, includes the cumulative effect of accounting change of Rs. 0.89
billion in H1-FY02.
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ICICI Bank: Summary performance (Indian GAAP)
(Rs. in million)
-------------------------------------------------------------------------------------------------
Q2 Q2 Inc. H1 H1 Inc. FY01
FY01 FY02 (%) FY01 FY02 (%)
-------------------------------------------------------------------------------------------------
Operating profit 585.0 970.0 66.0 1204.0 2356.0 96.0 2902.0
-------------------------------------------------------------------------------------------------
Net profit 301.0 662.0 120.0 702.0 1314.0 87.0 1611.0
-------------------------------------------------------------------------------------------------
Deposits 97283.0 175153.0 80.0 97283.0 175153.0 80.0 163782.0
-------------------------------------------------------------------------------------------------
Customer assets 63242.0 114092.0 80.0 63242.0 114092.0 80.0 107560.0
-------------------------------------------------------------------------------------------------
Net NPA 845.0 1612.0 91.0 845.0 1612.0 91.0 1544.0
-------------------------------------------------------------------------------------------------
25
ICICI Bank: Summary ratios (Indian GAAP)
--------------------------------------------------------------------
H1 H1 FY01
FY01 FY02
--------------------------------------------------------------------
EPS (Rs)(1) 7.13 11.93 8.13
--------------------------------------------------------------------
Return on assets (%)(1) 1.29 1.37 1.34
--------------------------------------------------------------------
Return on net worth ( %)(1) 11.85 19.07 12.98
--------------------------------------------------------------------
Market share in deposits (%) 0.97 1.52 1.44
--------------------------------------------------------------------
Market share in customer assets (%) 1.26 2.01 1.92
--------------------------------------------------------------------
Cost to income (%) 51.2 54.1 53.5
--------------------------------------------------------------------
Capital adequacy (%) 17.59 13.00 11.57
--------------------------------------------------------------------
(1) Annualized
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ICICI Bank: Income statement (US GAAP)
(Rs. in million)
--------------------------------------------------------------
H1 H1
FY01 FY02
--------------------------------------------------------------
Net interest income (after provision
for credit losses) 1505.0 2152.0
--------------------------------------------------------------
Non-interest revenue 367.0 2231.0
--------------------------------------------------------------
Non-interest expense 1222.0 2792.0
--------------------------------------------------------------
Income before tax 650.0 1591.0
--------------------------------------------------------------
Tax 43.0 456.0
--------------------------------------------------------------
Net income 607.0 1135.0
--------------------------------------------------------------
27
Safe Harbor
ICICI Limited and ICICI Bank expect to make available Notice of the
Shareholders' Meeting, a copy of the Scheme of Amalgamation and an Information
Statement or Prospectus to shareholders of ICICI Limited and ICICI Bank and the
investors in each company's ADSs. These documents contain important information
about the merger. Shareholders and investors in the ADSs are urged to read
these documents carefully when they are available. Free copies of these
documents may also be obtained from ICICI Limited and ICICI Bank.
ICICI Limited`s and ICICI Bank's filings with the Securities and Exchange
Commission are also available to the public from commercial document-retrieval
services or from the website maintained by the SEC at www.sec.gov.
28
Safe Harbor
This presentation contains forward-looking statements based on the current
beliefs and expectations of ICICI Limited's and ICICI Bank's management and are
subject to significant risks and uncertainties. Forward-looking statements
include the information concerning possible or assumed future results of
operations. Actual results may differ from those set forth in the
forward-looking statements. These uncertainties include: the ability to obtain
governmental and other approvals of the merger on the proposed terms and
schedule; the failure of ICICI Limited and ICICI Bank shareholders to approve
the merger or the failure of the High Courts of Mumbai and Gujarat to approve
the Scheme of Amalgamation; the impact of the regulations applicable to banks
under Indian law to which the business being conducted by ICICI would for the
first time become subject consequent to the merger; the risk that the
businesses will not be integrated as swiftly as planned; the risk that the
revenue synergies and cost savings from the merger may not be fully realized or
may take longer to realize than expected; disruption of the merger making it
more difficult to maintain relationships with clients, employees or suppliers;
the effect of economic conditions and interest rates on a national, regional or
international basis and market volatility in the securities markets or foreign
exchange rates or indices; the risk of new and changing regulation in India and
internationally; competitive pressures in the financial services industries;
and unfavourable political or other developments in Indian or international
markets.
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Safe Harbor
These uncertainties may have an adverse effect on the results of our
operations, financial condition, liquidity and the price of our equity shares
and our ADSs. Additional factors that could cause ICICI Limited's and ICICI
Bank's results to differ materially from those described in the forward-looking
statements can be found in the 2001 Annual Reports on Form 20-F of ICICI
Limited and ICICI Bank, filed with the SEC and will be contained in the
Information Statement or Prospectus.
30
Thank You
31