Standard & Poor's Ratings Services said today that its foreign currency ratings and outlook on ICICI Bank Ltd. (BB+/Positive/B), the second-largest and the largest private-sector bank in India, are not affected by the bank's announcement of its proposed merger with Sangli Bank Ltd. (Sangli Bank). Through the merger, ICICI Bank will acquire Sangli Bank's network of over 190 branches and existing customer base across urban and rural centers, primarily in the Indian states of Maharashtra and Karnataka. This will reinforce ICICI Bank's focus on rural and small enterprise banking operations in the two states. The proposed merger would result in the issuance of additional equity shares of ICICI Bank, equivalent to about 0.4% of its existing issued equity share capital. Sangli Bank is very small in comparison with ICICI Bank, at less than 1% of the latter's total assets. Although the financial profile of Sangli Bank is weak, as evident in its capitalization and profitability, this merger will not have any material impact on ICICI Bank's financial profile. The merger proposal is subject to their respective shareholders' approval and the necessary regulatory approvals.
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