Moreover, the bank has not just increased its ad volume, but it has also worked on a new branding strategy altogether. Right after the hurdle, it came across last year, the bank was quick enough to tweak its communication strategies. It moved away from its arrogant communiqué of ‘lead life on your terms’ to the ‘power of belief’. The new campaign not only echoed a soft voice of communication, but also presented the bank, which till then believed in aggressive growth alone, in a different manner altogether.
However, the biggest turning point for the bank could be its change in focus on the operations front. The bank, which once discouraged its customers from going to its branches and promoted the use of ATMs, is now persuading customers to visit its branches. Perhaps, it expects that a direct contact between the bank and the customers will not only help create a better relationship between the two, but also strengthen customers’ faith on the bank. Keeping that in mind, the bank has also reduced its huge army of direct selling agents by almost 70% with a target of zero reliance on any outsourcing for business acquisition and collections by next year. This certainly will help the bank gain some ground in the eyes of the customers, who have been irritated for the irrational behaviour of those external recovery agents.
But then, changing the way they operate alone won’t help it much. The internal workforce too has to deliver the best to the customers. Krishnan agrees, “No doubt, under Chanda Kochhar the bank is trying to regain lost grounds through advertisements and removal of external recovery system. But until and unless the bank improves its services it won’t be able to gain back the trust of its stakeholders.”
In the mean time, the bank is also working on its asset quality and capital adequacy, which actually brought them the crisis last year. As a result the asset quality of the bank has shown some signs of stabilisation. In absolute terms, the Gross NPAs of the bank have declined marginally, both on a y-o-y basis by 3% and on a sequential basis by 2%, to Rs.9,201 crore. In terms of capital adequacy too the bank is now at a stronger position. Explains Vaibhav Agrawal, VP – Research, Banking, Angel Broking, “Driven by a large net worth capital adequacy of ICICI Bank remained strong at 17.7% (Q2 FY09-10), comprising a substantial Tier-1 component of 13.3%. This puts the bank well for the imminent improvement in credit growth as the GDP outlook continues to improve.”
Moreover, as a part of its strategic change in focus and restructuring, the bank has now largely exited all its businesses outside its core competency including the small-ticket personal loans, which kept on bringing troubles every now and then for the bank. It has also reduced its non-India related exposures in international business. Though the books of the bank still do not reflect the results of such initiatives, analysts like Vaibhav believe that the bank is now well poised to grab the opportunities that would come in its way on account of the recovery. Investors too recognise the fact. As a result the share price of ICICI Bank has rallied from merely Rs.350 at the beginning of the present fiscal to over Rs.900 today.
However, the critical challenge for the bank will continue to win customers’ faith. K. J. Singh, CEO, Evolve Brands avers, “Riding on its campaigns since the beginning of the year, ICICI Bank’s image has certainly come a long way compared to the situation at the end of last year. However, service deliverance and right marketing strategies would help the bank in the long run.” Though the bank’s brand value has recovered by a fair margin as on date, critics say that it still has a long way to go. Apart from ad campaigns, the bank also needs more transparency in its operations, which perhaps has been a key reason for complaints against it in the past. By now, they’ve surely understood how even the smallest of ‘glitches’ can turn out to be an ultra-expensive ‘marketing’ proposition if customers lose faith in them?
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Outlook Magazine's B School Ranking Scam Exposed
Business Standard Exposes the Outlook Magazine Money Editor
Don't trust the Indian Media!
IIPM enters into media education
IIPM makes record 10,000 placements in five years
TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here
Pioneer Exposes the fraud called Mahesh Sharma and Mahesh Peri of Career 360 and Barbel Schwertfeger of mba-channel.com
IIPM Related Links
Detail of all IIPM branches
IIPM - Admission Procedure
IIPM, GURGAON
IIPM 3-year full-time Integrated (MBA BBA) Programme
IIPM 2-year full time Programme (leading to the award of the MBA degree from IMI)
However, the biggest turning point for the bank could be its change in focus on the operations front. The bank, which once discouraged its customers from going to its branches and promoted the use of ATMs, is now persuading customers to visit its branches. Perhaps, it expects that a direct contact between the bank and the customers will not only help create a better relationship between the two, but also strengthen customers’ faith on the bank. Keeping that in mind, the bank has also reduced its huge army of direct selling agents by almost 70% with a target of zero reliance on any outsourcing for business acquisition and collections by next year. This certainly will help the bank gain some ground in the eyes of the customers, who have been irritated for the irrational behaviour of those external recovery agents.
But then, changing the way they operate alone won’t help it much. The internal workforce too has to deliver the best to the customers. Krishnan agrees, “No doubt, under Chanda Kochhar the bank is trying to regain lost grounds through advertisements and removal of external recovery system. But until and unless the bank improves its services it won’t be able to gain back the trust of its stakeholders.”
In the mean time, the bank is also working on its asset quality and capital adequacy, which actually brought them the crisis last year. As a result the asset quality of the bank has shown some signs of stabilisation. In absolute terms, the Gross NPAs of the bank have declined marginally, both on a y-o-y basis by 3% and on a sequential basis by 2%, to Rs.9,201 crore. In terms of capital adequacy too the bank is now at a stronger position. Explains Vaibhav Agrawal, VP – Research, Banking, Angel Broking, “Driven by a large net worth capital adequacy of ICICI Bank remained strong at 17.7% (Q2 FY09-10), comprising a substantial Tier-1 component of 13.3%. This puts the bank well for the imminent improvement in credit growth as the GDP outlook continues to improve.”
Moreover, as a part of its strategic change in focus and restructuring, the bank has now largely exited all its businesses outside its core competency including the small-ticket personal loans, which kept on bringing troubles every now and then for the bank. It has also reduced its non-India related exposures in international business. Though the books of the bank still do not reflect the results of such initiatives, analysts like Vaibhav believe that the bank is now well poised to grab the opportunities that would come in its way on account of the recovery. Investors too recognise the fact. As a result the share price of ICICI Bank has rallied from merely Rs.350 at the beginning of the present fiscal to over Rs.900 today.
However, the critical challenge for the bank will continue to win customers’ faith. K. J. Singh, CEO, Evolve Brands avers, “Riding on its campaigns since the beginning of the year, ICICI Bank’s image has certainly come a long way compared to the situation at the end of last year. However, service deliverance and right marketing strategies would help the bank in the long run.” Though the bank’s brand value has recovered by a fair margin as on date, critics say that it still has a long way to go. Apart from ad campaigns, the bank also needs more transparency in its operations, which perhaps has been a key reason for complaints against it in the past. By now, they’ve surely understood how even the smallest of ‘glitches’ can turn out to be an ultra-expensive ‘marketing’ proposition if customers lose faith in them?
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Outlook Magazine's B School Ranking Scam Exposed
Business Standard Exposes the Outlook Magazine Money Editor
Don't trust the Indian Media!
IIPM enters into media education
IIPM makes record 10,000 placements in five years
TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here
Pioneer Exposes the fraud called Mahesh Sharma and Mahesh Peri of Career 360 and Barbel Schwertfeger of mba-channel.com
IIPM Related Links
Detail of all IIPM branches
IIPM - Admission Procedure
IIPM, GURGAON
IIPM 3-year full-time Integrated (MBA BBA) Programme
IIPM 2-year full time Programme (leading to the award of the MBA degree from IMI)
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