• OUTLOOK ARENA
  • VIEWS ON NEWS
  • SEPTEMBER 20, 2000

ICICI Bank: Internet is the way

The concept of online banking in India is catching up fast. More players are joining the bandwagon. ICICI Bank is the first bank in India to offer Internet banking.

Internet banking is an additional channel through which a customer can transact apart from the normal brick and mortar banking. It helps banks gain substantially in terms of transaction costs.

Internet banking is a volume game. ICICI Bank has consistently increased its net banking customers from 110,000 as on March 2000 to 140,000 as on July 2000. It has invested around Rs 50 m in this initiative to offer Net banking products. As per the bankís estimate there will be around 30 m Internet banking users in the next 3-5 years. ICICI Bank will be able to gain a big share because of its early foray into this segment. Currently the bank is facing strong competition from HDFC Bank and Citibank among others.

ICICI Bank is planning to tie up with computer manufacturers such as Compaq to provide computers at concessional prices. It has also tied up with NIIT for providing basic training and has forged alliance with Internet service providers such as Satyam Online for providing Net access. It has planned to provide touch screen kiosks at its ATM centres.

The retail segment has emerged as a key thrust area for ICICI bank. The bank is primarily targeting middle and upper middle class customers, leveraging on its strong brand equity to deliver high quality products and services. To begin with, the bank through the launch of new products such as kid-e-bank for small children and bank@campus for students has associated its products with all stages of a personís life cycle. The bank has also launched array of new products in the personal segment, which includes web-enabled credit cards and loans against shares. The expanding retail reach should help the bank to reap the benefits of lower funding costs and cross-selling opportunities.

Over the past few years, ICICI Bank has positioned itself to leverage on competitive technological advantages to grow its retail clientele. The bankís initiatives on developing and aggressively expanding its multi-channel distribution strategy of branch, ATM and Internet banking would add value to its retail franchise and improve its deposit mix. Its enhanced services like depository services, bill payments and mutual fund distribution would help enhance customer loyalty. Its strong parentage and increased capital base after the recent ADR issue would also increase flexibility in the corporate banking business.

Comparative valuations
ParticularsHDFC
Bank
ICICI
Bank
Global Trust
Bank
UTI
Bank
Market Price230.0167.066.035.9
P/E30.320.45.47.3
Book value30.958.443.518.2
Price/Book value7.42.91.52.0

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst)
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407