Manpower Planning in Mergers and Acquisition (Merger of Bank of Madura with ICICI Bank) Presented by – 53 Amit Malankar 125 Mahesh Sharma Coming together is the beginning. Keeping together is a progress. Working together is a success ……Henry Ford

Merger & Acquisition Life Cycle Pre Deal Due Diligence Integration Planning Implement Merger Evaluate Merger

Role of HR in each Phase Pre Deal Phase Assessing the potential Compatibility. Due Diligence Phase Contract, terms condition,Government law, Union relationship. Integration Planning Talent management, New roles, work environment & location issues. Implementation phase Restructure of organisation, Business strategies,Process redesign Evaluating Phase Review Post Merger scenario

Comparison of Bank of Madura and ICICI Bank Bank of Madura Established in the year 1943 Asset base: over Rs.4,400 crores Capital Adequacy ratio of banking branches, 132 Computerized branches that account for 90 percent of business. 1.2 million customer accounts Total Employee strength of 2577 of which 2000 employees were computer literate of whom nearly half were clerks and around 350 were subordinate staff. ICICI Bank Established in the year 1994 Asset base: over Rs.12, 000 crores Strong capital Adequacy ratio of 19.6 percent. Technology- driven business growth with 104 branches, 366 ATMs (as on 7 Dec, 2000), the largest ATM Network in India. All branches have been computerized, and Internet Banking facilities have been provided to customers. Employees: Total strength of around 1500 all of whom are computer literate

Progress of Merger Decision for Merger Official Announcement of the merger with Swap ratio Share holder Approval RBI Approval 11 th Dec th Dec th Jan st March 2001

Comparison of Balance Sheets

Comparing Income Statements of ICICI Bank & Bank of Madura

Key Factors

Swap Ratio Bank of MaduraICICI Bank 12 Particulars Bank of MaduraICICI Bank NPA4%1.3% Last dividend paid55%15% Earning per shareRs.44Rs.7 Book value (as on 30 th September 2000) Rs.206Rs.62 Market price of share before the merger (7 December at NSE closing price) Rs.122, Profit after Tax (financial year 2000)Rs.456 millionRs.1,053 million

New (IN) Vs Old (OUT) ICICI BANK Bank of Madura

Synergy of the Merger Network of over 360 branches. Network of over 360 branches. Reduced time for setting up new branches. Reduced time for setting up new branches. Combined customer base of 2.7 million. Combined customer base of 2.7 million. Combined asset base of Rs.16, 000 crore, which makes the ICICI bank amongst the largest I private sector banks in India. Combined asset base of Rs.16, 000 crore, which makes the ICICI bank amongst the largest I private sector banks in India.

Continue… Stronger Financial and operational structure Stronger Financial and operational structure Increased Geographic Reach Increased Geographic Reach Huge Customer Base (Can be use for cross selling) Huge Customer Base (Can be use for cross selling) Tech Edge – ATM, Phone and internet banking will save cost and operational expense. Tech Edge – ATM, Phone and internet banking will save cost and operational expense. Priority Sector Advances Priority Sector Advances Equity Capital & EPS Equity Capital & EPS Large amount of low cost deposit. Large amount of low cost deposit.

Challenges Managing Human Resources Cultural Integration Creating Knowledge – Oriented Employee base Managing Client base Managing Rural Branches Positioning both the bank in the context of new trend

Post Merger Actions Global Consultant –Hewitt Appointed ICICI bank has created 55 Panels to look after different aspects Golden Handshake – VRS Replacement of VRS employee with management trainee Integration Process Promotion of BOM employee

Golden Handshake (VRS) Eligibility – 7 Years of service / Minimum age 40 years as on July 31, Month Salary for every completed year of service or salary to be drawn by for the remaining period of service Medical Benefits for employee & dependents till normal retirement age. Part Waiver of Home loans

Conclusion Establish Clear Communication through proper Channel among the employees. Training program should have been conducted for the BOM employees Mixture of ICICI and BOM employee base is require in BOM branches. Deposit base need to be reduce for BOM client

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