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Non-Tech : ICICI Ltd - (Nyse: IC) -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (392)	3/15/2000 10:39:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 494

ICICI Bank to enter into strategic alliance with Corporation Bank corpbank.com Tamal Bandyopadhyay MUMBAI, MARCH 15: ICICI Bank is set to enter into a strategic alliance with Corporation Bank. In the first of its kind alliance between a private sectorbank and its public sector counterpart, ICICI Bank will offer its technology platform to Corporation Bank and in return use the latter's wide customer reach. Both the banks' boards have cleared the move and their chiefs will sign a memorandum of understanding on Friday at Mangalore, where Corporation Bank is headquartered. Industry sources interpreted the move as a first step by ICICI Bank towardspicking up a stake in Corporation Bank. "The bank is certainly not averse tothe idea," said ICICI Bank insiders. Corporation Bank chairman RS Hugar wasnot available for comment. ICICI Bank is slated to hit the overseas market with its maiden American depository shares issue by the end of this month. The bank has raised the issue size from $125 million to $175 million reportedly to fund future acquisitions. Corporation Bank is one of the six state run banks which has brought down Government's stake to raise equity from the public. Sources feel this is a strategic move by Corporation Bank to ward off any possible takeover threat. Another new generation private sector bank- HDFC Bank -- is believed to have recently made a presentation to the finance ministry to pick up Government's stake in Corporation Bank. However, this could not be confirmed. ICICI Bank and Corporation Bank are setting up a common group to decide onthe areas where both can work together. "The group will start working afterthe signing of the MoU. The two banks are going beyond the realm of correspondent and relationship banking. There will be joint strategy both onliabilities as well as assets sides," sources in Corporation Bank said. To start with, customers of both the banks will use ICICI bank's 125 ATMs and Corporation Bank's five ATMs. There will be sharing of credit information by setting up a joint credit information bureau. Besides,Corporation Bank customers will be allowed to use ICICI's technology platform to make payment of all utility bills. There will also be cobranding of the recently-launched ICICI credit card. "The potential of the alliance is immense. Both the banks are willing to explore the possibilities of sharing assets in the near future. There can be joint asset creation which will give both the banks the flexibility in risk taking," sources said. The traditional correspondent or relationship banking is generally restricted to three areas: remittances, letter of credit (LCs) and collections. Analysts interpreted the move as a win-win situation for both the banks."This is a classic example of a paradigm shift in Indian banking. We will see more of such alliances in this consolidation phase," pointed out a senior bank analyst. ICICI Bank has a branch network of 86 compared withCorporation Bank's 600. The number of employees at ICICI Bank is about 1,400 in contrast to Corporation Bank's 20,000. The number of ATMs set up by ICICI Bank is 130 against Corporation Bank's five. Corporation Bank's deposit liability stood at about Rs 12,000 crore($2.6 bil) against ICICI's Bank's Rs 8,000 crore ($1.7 bil); advances Rs 5,000 crore ($1.1 bil) against Rs 4,000 crore ($870 mil) and investments Rs 6,000 crore ($1.3 bil) against Rs 4,000 crore ($870 mil). INSIGHT Markets may not be enthused Tie-ups like this will become increasingly common owing to the synergies involved. However, the market buzz was of a takeover of Corporation Bank byICICI Bank, and the ICICI Bank stock has in fact tripled in the last three months on such rumours. Accordingly, a tie-up announcement, however important, will be taken as a let-down by the market, unless it is a precursor to an equity stake being picked up by ICICI Bank. But that is probably a distant dream, and the market is unlikely to be enthused. -- Urmik Chhaya -Indian Express Newspapers (Bombay) Ltd.