ICICI_IM

1. ICICI has emerged as one of India’s leading retail banks- should it distract itself from opportunities in the Indian market by pursuing a global strategy? Why do you think it might succeed even though other Indian banks have failed in the overseas market? No, it shouldn’t because:  Indian exodus is on the rise & a parallel growth will be seen in the purchasing power  Within India they have presence in the retail sector which is strong & growing  The portfolio of retail products offered within India have greater need  Capital expenditure for each full- fledged branch ($30 million) does not justify the business opportunity possibility Even if they do pursue expansion, the route is through remittances which will be supported by the robust domestic retail network. 2. Does it make sense for ICICI to pursue the Indian diaspora? Why/ Why not? Who are its main competitors? The route of remittances will be supported by the robust domestic retail network. 3. What geographies should it focus on if you believe ICICI should go global & what should be the strategy for each geography? a. Please quantify the size of the retail and international businesses i. For retail businesses, use data in exhibit 6(a) & make assumptions on ICICI’s market share Product

Market Size Proj. Growth New Market ICICI Share ($ million) ($ million) Same increase 5% Deposits 659,000 15% 757,850 3.50% 3.68% Housing Loans 6382 35% 8615.7 3.00% 3.15% Auto Finance 1809 30% 2351.7 16.00% 16.80% 1 Credit Cards 159.57 25% 199.47 5.00% 5.25%

ICICI Share ($ million) Same increase 5% 26,524.75 27,850.99 258.47 271.39 376.27 395.09 9.97 10.47

ii. For remittances businesses, use data in exhibit 3 & 4(a). Also refer to economies of Western Union when determining ICICI’s fees.

Assuming the CIA fact-book growth of 10% annual growth of Indian diaspora & the same per capita remittance:

1

1USD= 47 INR

Country/ Region

Remittances ($ million)

Canada UK US GCC SE Asia Total

Growth

750 1500 5200 5000 1500

10% 10% 10% 10% 10%

13950

Model Western Union

10%

0.8 2.2 1.7 4.1 0.3

Per Capita ($) 937.5 681.82 3058.82 1219.51 5000.00

9.1 Revenue ($ million

Cost

Indian Diaspora (in million)

1534.5

Fees per transaction (Roughly, $) 153.30

Business Size ($ million) 825 1650 5720 5500 1650 15345

Transactions (million) 10.01

iii. For international corporate banking, use data in exhibit 8 & make assumptions on ICICI’s market share Product

Market Size Proj. Growth New Market ICICI Share ($ million) ($ million) Same increase 5% Trade Finance 750 10% 825 5.00% 5.25% Treasury & Corporate 70 10% 77 5.00% 5.25% Lending

ICICI Share ($ million) Same increase 5% 41.25 43.31 3.85

4.04

4. If ICICI decided to get into the retail banking in US & UK and charged $750/ customer, what would be their projected annual revenue if they captured 10% of the NRI market? (Use Exhibit 4(b)) Country/ Region UK US Total

Indian Diaspora (in million) 2.2 1.678

Growth 10% 10%

Market Share 10% 10%

Target Size (in million) 0.242 0.185

Customer Charge ($)

Revenue ($ Million)

750 750

181.5 138.435 319.935