ICICI Bank SWOT and PESTLE Analysis

Strengths

1. Collaborations: ICICI bank is easing the banking for their customers through strategic partnerships. Some of the collaborators are Samsung Pay, BharatQR, and Truecaller Pay. BharatQR is the digital initiative with Government of India which provides merchants and customers easily make the payment through their mobile. Samsung Pay gives customers access to pay through their Samsung Galaxy smart phones by loading their credit and debit cards. Last the Truecaller Pay which gives instant and safe UPI based services access to 150 million people Indian users. This is one of the great strength for the ICICI bank to increase their brand image as a digital bank in the urban area market and add new customers.

2. Strong Organisation culture: ICICI bank is currently implementing the program DYNAMIC ICICI to reinforce and foster the organizational culture. DYNAMIC ( Digital, Young, Nurturing, Agile, Mindful, Inclusive and Connected) is preaching the employees of ICICI bank to experiment and come up with new ideas which are novel and useful in itself. Under this program the primary focus is on serving customer and thereby helps employees to learn and relearn faster.

3. Smooth banking for NRIs: ICICI Bank is offering easy to access services to Non- Resident Indias (NRIs) who are dispersed all around the globe and increasing at the fast pace. Hence it has become the preferred bank among the NRIs in the key global markets. ICICI bank is known for its remittances business as India is the highest recipient globally for inward remittances which are sent by NRIs. It is focusing on its international banking business to its clients in the countries like the USA, and much more. In the year 2017 ICICI bank launched Money2India, an online platform for inward remittances providing amazing features to the customers. Besides it also launched fingerprint enabled application to send the money in India which enabled their customers to send money to their family quickly.

4. Management of their Treasury Operations: ICICI bank has four groups to manage their treasury operations. Firstly, the Asset Liability Management Group which manages banks' liquidity. Second is Structural Rate Risk Management Group whose role is to get a yield on the portfolio and maintain the compliance with statutory and regulatory requirements. Third, Markets Group which offers detailed insights about the global market into the local market and thereby provide foreign exchange and derivatives solutions to their clients. Last is the Proprietary Trading Group that manages the trading position being in their limits of risk. These four groups helped the company to get the most returns from the market by carrying the systematic and unsystematic risks intelligently. ICICI bank received various awards such as ‘Best Derivative House of the Year', ‘Best Bond House of India’ and ‘Best Foreign Exchange Provider-India.'

5. Industry specific solutions: ICICI Bank is offering Services and products to their business customers other than retail customers. They are providing specific solutions to specific industries according to their requirements of the business they are in. The platform for the real estate industry is Developer High Rise Platform which gives multiple services like Online Project Approval, Promotion Campaign Management, and Society Promotional Creation. For the IT/ITES clients, the service is e-Softex, to regularise and simplify the invoice of software exports. It helps companies to reduce their cost significantly and use their time efficiently.

Weaknesses

1. Increasing NPAs: NPAs (Non-Performing Assets) are growing subsequently year on year basis and impacting the Indian economy as a whole. It is also chocking the bank's ability to provide their lending facilities effectively. ICICI bank reported 17.08% reduction in their net profits in Q4 of FY 17 due to increasing NPAs which in turn requires high provisioning for bad loans and lead to decrease in assets quality. The increase in NPAs in the Q4 was due to the one account in the cement sector. But the bank is taking strict measures to improve the condition working under the guideline provided by RBI.

2. Higher service charge: ICICI Bank has higher service charge in comparison to other banks due to which the people are shifting their preference to other banks. For instance, ICICI charges Rs. 250 for chequebook of 10 leaves whereas SBI charges Rs. 30 plus service tax. Thus if ICICI Bank can control its cost, they might see an increase in market share.

Opportunities

1. Using Robotics: As the world is getting technologically advance so the various businesses are adopting the technology to ease their operations and thereby reduce the operations. ICICI bank is the first bank in India that has employed ‘Software Robotics’ to re-engineer business processes. These Robots are configured to interpret information form systems, recognize pattern and run business processes through applications. Currently, it has 500 such robots which are handling 1 million banking transactions every working day. This results in 60%reduction in response time and increase in productivity.

2. Strategic Investment in Rural and semi urban areas to growth: Various companies have recognized the great potential in the rural and semi urban areas where they can expand their operations. It is the big opportunity for banks to build goodwill among the people residing in rural areas by helping them starting their business or training them which in turn will increase the customer base for the future market. ICICI Bank has started two initiatives namely ‘ICICI Digital Villages’ where the objective is to digitise 100 villages in 100 days. The commercial activities will be digitised, ICICI foundation will impart vocational training and credit facilities will provide to villagers where they can enhance their livelihood opportunities. Another initiative is ‘Mera iMobile’, an app available in 11 languages. It also gives weather information and agricultural market price for the farmers. It can run the low internet speed which is common in rural and semi-urban areas.

The unpublished sections of the entire SWOT analysis is available in the 'Complete Report' on purchase.

Political

1. Financial Inclusion Policies by Indian Government: In the year 2016-17 there are many financial inclusion policies have been launched by the Indian government like Pradhan Mantri Jan Dhan Yojana (PMJDY), Kisan Vikas Patra (KVP) etc. The scheme is to spread awareness among the people living in the rural areas so that they start using banking facilities rather taking a loan from the landlords. ICICI bank has executed Memorandum of Understanding (MoU) with National Housing Bank (NHB) to implement credit linked subsidy scheme through Kisan Credit Card which will open another better option for the people.

Economic

1. Uncertain Fed Rates: There is uncertainty about the interest rate set by US Federal Reserve which creates a ripple effect on the Indian economy. Currently, the market is expecting a rate hike in December 2017 which will lead to a slowdown of debt and equity inflow in India by FIIs and will create pressure on the rupee. Also, the international debt in the USA will become expensive. These all things will impact the operations of the ICICI bank which might reduce its profitability as it has a significant focus on international business.

2. Reduction in Manufacturing: After the demonetization many small businesses got impacted because they transact on cash basis. On the other hand, GST also impacted because on some goods the rates are changed, and it created the confusion among the businesses about the tax laws. This lead to a reduction in manufacturing, the PMI index is 50.7 the four months low. Which might influence the change in credit taking behavior of the clients.

Social

1. Growth in awareness of banks among the rural people: After demonetization took place in November, 2016, the people residing in rural areas learned the importance of banks in their lives. Previously, they used to transact in cash, borrow from moneylenders who charge high interest rates and also save their earnings in homes instead of banks. As people are getting more aware which is creating a big opportunity for the banks to expand their customer base in the rural areas. In addition, providing the easy access to banking facilities for their agriculture and small business operations activities.

2. Increase in participation of women to live sustainabily: In Rural and Semi-urban areas there is socio-economic development among the villagers giving opportunity to the women. The increased women employment will contribute to the family disposable income and GDP of the country. ICICI foundation along with ICICI bank launched ICICI academy for skills in which they are training 11,300 villagers at the 100 ‘ICICI Digital Villages’ from that 60% are women.

The unpublished sections of the entire PESTLE / PESTEL analysis is available in the 'Complete Report' on purchase.