Communication in a Crisis ICICI Bank

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Excerpts....

In September 2008, there were reports of several US-based investment banks filing for bankruptcy due to their exposure to subprime mortgage loans. On September 15, 2008, Lehman Brothers declared chapter 11 bankruptcy soon after it reported a loss of US$ 2.8 billion in the second quarter ended May 2008. The collapse of Lehman Brothers and other US investment banking majors was widely covered by the media. Subsequently, trouble started brewing for ICICI Bank when analysts said that ICICI Bank had huge exposure to Lehman Brothers. Soon after the news broke out, investors rushed to sell their shares of ICICI Bank, dragging the bank’s stock down by 10 percent.

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As the rumors about ICICI Bank’s financial position refused to die down, the bank started a massive email and messaging campaign. It sent messages and emails to its 27 million customers stating, ‘Dear customer, your deposits with ICICI Bank are safe. Your bank is well capitalized with good liquidity. Please do not listen to baseless rumors.........

Despite communicating through various media channels, customers continued to flock to ATMs and the bank’s branches fearing that they could lose their deposits. Kochhar then requested the Finance Ministry to intervene. On September 30, 2008, the Finance Minister, P Chidambaram, said, “All our banks are well capitalized, well regulated. No Indian depositor need be apprehensive. We’re watching the situation carefully........

Industry watchers felt that it was ICICI Bank’s efforts at communicating during the crisis that helped it restore its brand value. According to the Brand Finance Global Banking 500 Report for 2011, ICICI Bank’s brand value had reached a figure of US$ 2.5 billion. In addition to this, the bank was ranked 70 in 2011 from 108 in 2009 in the same list.........

Having tackled the crisis by effectively communicating to its customers through email, messaging, and print and television campaigns to have faith in the bank, ICICI Bank tweaked its marketing strategies in February 2009 and focused on the consumer’s security and belief first. The year marked the bank’s 15th anniversary. Making all its communication subtle, the bank shifted from its previous ‘know all’ approach to relationship building with its customers.........

Exhibit I:ICICI’s Profit and Loss Statement
Exhibit II: ICICI Bank’s ‘Power of Belief’ Print Campaign