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Chairman & Managing Director's Letter to Shareholders
I am pleased to share with you the performance of your Bank for the Financial Year 2012–13. Even under stressed economic environment, your Bank has shown robust growth in Business. I am happy to inform that your Bank has crossed the milestone of Rs.2,00,000 Crore of Total Business during 2012–13.
Risks and uncertainties remain on the global economic front and lead indicators point to a sluggish global growth. Political economy risks that block or delay credible and determined policy actions in advanced economies (AEs) are inhibiting recovery.
For Emerging and Developing Economies (EDEs), risks of spillovers from AEs remain significant. While global inflationary pressures are likely to be subdued, given still large output gaps, several EDEs could potentially face the threat of elevated energy prices.
The domestic economy continues to face major challenges in the form of an alarming Current Account Deficit
(CAD) and worsening Balance of Payments situation. These factors have contributed to the deteriorating investors' confidence and market sentiments. The Advance Estimates of National Income 2012–13 released by Central Statistics Office (CSO) have estimated GDP growth at a decade low level of 5.0%.
During the Financial Year 2012–13, Banking Industry performed better than the previous year even in the backdrop of a slowing economy. The Deposits of Scheduled Commercial Banks registered a growth rate of 14.3% over the previous year as compared to a y–o–y growth of 13.4% registered during the previous Financial Year.
Gross Bank Credit of SCBs recorded a growth rate of 14.1% over the previous year, which is lower than the growth of 17.0% witnessed during FY 2011–12. The general economic slowdown contributed to a low credit off–take during 2012–13.
The Credit–Deposit Ratio for the industry remained stable at 78.0%.
The performance highlights of your Bank for the Financial Year 2012–13 are as follows:
Total Business increased from Rs.1,90,535 Crore in 2011–12 to Rs.2,23,933 Crore in 2012–13, registering a growth rate of 17.5%.
Total Deposits increased to Rs.1,23,796 Crore from
Rs.1,05,851 Crore in the previous year, registering a growth rate of 17.0%.
CASA Deposits increased to Rs.31,759 Crore from Rs.27,947 Crore, registering a growth rate of 13.6%.
Cost of Deposits stood at 7.87%.
Gross Bank Credit increased to Rs.1,00,138 Crore from Rs.84,684 Crore, registering a growth rate of 18.2%.
Credit Deposit Ratio stood at 80.94% compared to 80.07% during the previous year.
Net Interest Margin stood at 3.21%.
Non–Interest Income stood at Rs.1,047 crore.
Net Profit for 2012–13 stood at Rs.1,289 Crore.
Gross NPAs to Gross Advances Ratio stood 3.71%. at
Net NPAs to Net Advances Ratio stood at 2.45%.
Capital Adequacy Ratio stood at 11.76% under BASEL–II.
Return on Average Assets stood at 0.99%.
Net Profit per Employee stood at Rs.7.80 lakh.
Average Business per Employee stood at Rs.12.22 Crore.
It gives me great pleasure to inform that your Bank has surpassed the targets under Priority Sector Lending,including Agricultural Advances.
During FY 2012–13, your Bank has taken the following I.T.initiatives to improve Customer Service:
Cheque Deposit Machines have been installed during the year at select Branches.
Bunch Note Acceptor machines have been deployed at e–banking centres.
100 self–service passbook printing kiosks have been deployed during the year.
Bank has launched IMPS P2A (Person to Account) funds transfer facility using beneficiary account number as IFSC code.
IMPS facility has been extended to the customers through our Bank's ATMs also.
Security features for Internet Banking transactions have been enhanced by introducing One Time Password (OTP) for financial transaction, One time Access Code (OAC) and cooling period for addition of third party payee.
Due to the confidence and support placed by the shareholders on the Bank and on account of the hard efforts put in by the committed staff, your Bank received the following awards during 2012–13:
Based on the evaluation of 503 Rural Self Employment Training Institutes (RSETIs) spread across the country, our Rajahmundry Institute has been adjudged the Best RSETI in the country for the year 2011–12 by Ministry of Rural Development, Government of India.
In the NFS Operational Excellence Awards 2012 (National Payment Corporation of India) held at Mumbai on 14.12.2012, your Bank was presented "Special Jury Award" in recognition of your Bank's excellent performance in key parameters in respect of ATMs and Switch connected to NFS ATM Network.
The Board of Directors of the Bank have recommended a dividend of 50% for the year 2012–13. Your Bank is committed towards delivering best services to customers by leveraging on technology and human resources, and would tirelessly work towards maximizing shareholders' value.
With warm wishes,
(B. A. PRABHAKAR)
Chairman & Managing Director
Place : Hyderabad
Date : 02.05.2013