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It gives me great pleasure once again to present the performance of your Bank for the year ended March 31, 2013.
Growth in the Indian economy has further decelerated in FY 2012–13 to 5.0 per cent as compared to 6.2 per cent growth in FY 2011–12. The slowdown in the economy in FY2012–13 has impacted the growth in the banking sector leading to moderation in growth of both deposits and credit.
External sector growth has moderated during 2012–13 due to substantial contraction in merchandise exports as compared to imports. While Exports showed a negative growth trend at 1.8 per cent, Imports registered 0.4 per cent growth, resulting in the trade deficit widening by 4.1 per cent to US $ 191 billion as compared to the previous year.
The year 2012–13 has seen a sustained pressure on Current Account Deficit (CAD), which at 5.4 per cent in the first nine months of the financial year was substantially higher compared to the already high CAD of 4.1 per cent of GDP in FY 2011–12.
Worsening Current Account Deficit, rupee depreciation vis–a–vis the dollar and the euro, high fiscal deficit, persistent inflation coupled with tight liquidity conditions through most of the year have contributed to the slowdown in the savings and investment climate in the country.
Considering the above backdrop in economic and banking scenario, your Bank was able to record a commendable performance.
Business and Financial Achievements
1. Your Bank's Business level grew by 17.52 per cent to Rs. 249,136 crore for the year ended March 2013. While Deposits grew by Rs. 21,176 crore or 17.53 per cent to Rs. 141,980 crore, Credit grew by Rs.15,972 crore or 17.52 per cent to Rs. 107,156 crore. The growth of your Bank in other financial parameters are as under:
2. Operating profit of your Bank was at Rs. 3,061 crore, while Net Profit stood at Rs. 1,581 crore in FY 2012–13.
3. Net worth of your Bank increased to Rs. 10,838.84 crore and the Capital Adequacy Ratio under Basel II was at 13.08 per cent (Tier I –10.88, Tier II – 2.20). Your Bank is well capitalized.
4. Return on Assets at 1.02 per cent continues to be the best among Public Sector Banks.
5. Your Bank's Net Profit to Business ratio at 0.64 is the second best among the Public Sector Banks.
6. Net Interest Margin (NIM) continues to be above the 3 per cent mark and stood at 3.09 per cent.
7. Your Bank has reached all the stipulated norms under Priority sector advances which at Rs. 36,421 crore was 42.1 per cent of the Adjusted Net Bank Credit (ANBC), while Agriculture lending has risen by Rs. 3646 crore to Rs. 17,001 crore as on March 31, 2013.
8. Your Bank has 73 specialised branches across the country exclusively catering to the SME sector; the SME portfolio increased by Rs. 3,588 crore or 35 per cent to Rs. 13,746 crore.
9. Earning per share (annualised) and Book value per share were at Rs. 35.80 and Rs. 242.89 respectively. Return on Equity was at 14.89 per cent in the current year.
10. Towards enhancing its pan India network and to extend its reach to the under–banked and unbanked areas, your Bank opened 143 branches and 42 ATMs in the current year to touch 2089 delivery points and 1322 ATMs.
11. Your Bank has international presence in Singapore and Colombo & Jaffna in Sri Lanka. Besides, your Bank has correspondent banking arrangements in 69 countries.
12. Towards having a healthy Balance Sheet, adequate provisioning has been made towards NPAs and employee benefits.
13. For specialized lending to SHGs, your Bank has exclusively 45 MICROSATE branches. These branches have disbursed Rs. 590 crore covering 23,457 SHGs during FY 2012–13 and the total outstanding advances as at end–March 2013 stood at Rs. 746 crore covering 56,913 SHGs.
14. Your Bank has opened 1418 Ultra Small Branches (USBs) in the villages with population above 2000, covered through BC model under Financial Inclusion.
15. Under the Financial Inclusion Plan, your Bank has provided banking services to 3494 villages with population above 2000 as well as below 2000 through various delivery channels as below:
a. 3380 villages through Smart card based Business Correspondent (BC) model;
b. 26 villages through Brick and mortar branches;
c. 34 villages through Banking Service Centres (BSCs); and
d. 54 villages through Mobile branch/van.
16. In the Union Territory of Puducherry, where your Bank is the SLBC Convenor, all the 42 villages with population above 2000 and 25 villages with population 2000 and below have been provided with banking services through various delivery channels under the Financial Inclusion Plan by the member banks.
17. Under the Direct Benefit Transfer (DBT) scheme, in the 43 pilot districts, your Bank is Lead Bank in Chittoor District of Andhra Pradesh and SLBC Convenor in the UT of Puducherry. In Puducherry district, accounts have been opened for all the 4249 beneficiaries under 13 schemes and in Chittoor district, accounts have been opened for all the 1.29 lakh beneficiaries under 8 schemes. In Krishna and Yanam districts, accounts have been opened for 1.07 lakh beneficiaries under 5 schemes and 753 beneficiaries under 3 schemes, respectively from whom details have been received.
Your Bank's performance has won recognition and several coveted awards were conferred in the current year too; the notable among them are
1. Your Bank has attained the first rank and has been conferred with the coveted National Award for Excellence in Lending to Micro Enterprises for FY 2012 by the Hon'ble President of India.
2. SKOCH Digital Inclusion Award 2012 for exemplary use of technology in Financial Inclusion.
3. SKOCH Challenger Award 2012 – Banking for outstanding contribution in providing banking services to the unreached villages through various Financial Inclusion initiatives.
4. SKOCH Financial Inclusion Award 2012 for completion of 100% Financial Inclusion in UT of Puducherry.
5. IBA – Banking Technology Awards 2011 for best use of technology in Training and e–learning (2nd Runner up).
6. Outlook Money Awards 2012 for Best Bank.
7. NFS ATM Operational Excellence Award 2012 –Runner–up under 'Public Sector Banks' category constituted by NPCI in recognition of its excellent performance in respect of ATMs and Switch connected to NFS ATM Network.
8. The Sunday Standard FINWIZ Award 2012 by New Indian Express for Quickest Turnaround.
9. Master Card Innovation Award – PREPAID CARD PROGRAM to the Bank for innovative prepaid card sales, targeting Corporate entities by M/s. Master card International.
Accolades in the recent past ...
1. Listed among Top 150 Banks for Best RoA as per Banker Magazine.
2. Adjudged Fifth among the Public Sector Banks as the Best Service Brand by Economic Times Brand Equity.
3. ISO 9001:2008 Certification for our Corporate Office Building – First Corporate Office building of PSBs in India to get the ISO Certification.
I am also happy to inform you that the Board of Directors of your Bank has recommended a dividend of 66 per cent.
Several new initiatives were also taken by your Bank during the year as part of its commitment to customers and stakeholders to facilitate convenience banking.
4. Online application facility for MSME loans.
5. E–Payment Interface for Direct Tax, Indirect Tax, Commercial Taxes Collection for West Bengal, Maharashtra Virtual Treasury payment, Puducherry, Karnataka, Orissa, Andhra Pradesh, Tamil Nadu CST/VAT, Tamil Nadu RTO fees, Tamil Nadu Electricity Bill payment, Multi–challan Customs Duty payment through IceGate site, receipt of CST and DVAT for Dept. of Trade & Taxes, Government of NCT Delhi etc., enabled.
6. Online Merchant Payment Gateway Interface with more than 5000 merchants / brokers, for payment of Bills.
7. Tamil Nadu Electricity Bill (TNEB) payments through SMS Mode.
8. Contribution to Prime Minister's National Relief Fund facilitated through net banking.
9. IB Prepaid Gift Cards and IB Prepaid International Travel Cards under Master Card Brand launched. The Prepaid Gift Cards are available in free loading denominations and issued to the customers free of charge. The Prepaid Travel cards are sold through all FOREX authorized branches of the Bank.
10. Opening e–TDA (electronic–term deposit account) through net banking – customers having net banking facility can open term deposits (FD/STD/RIP/RD) electronically by instant debit to the accounts through net banking.
11. Online remittance facility from UAE Exchange enabling instant credit to our customers' accounts.
12. Collection of application fees for various Universities enabled through Multi Utility Payment Module.
The confidence reposed by our 30 million customers on us has inspired us to put in consistently better performance year after year.
We expect the current financial year 2013–14 to be a challenging one with moderate recovery in the economy. With the global economic outlook continuing to be uncertain, the twin deficits in the domestic economy coupled with persistent inflation, slower GDP growth, lower growth in the Gross Domestic Savings and the slowing investment climate may moderate the growth in the banking system.
I am confident that with your continued patronage and our concerted efforts, your Bank would be able to surge ahead and further enhance stakeholders' value.
With the continued support of our shareholders, customers, well–wishers and the unrelenting efforts of our employees, together with the support of the Government of India and the Reserve Bank of India, I am sure your Bank will continue to move ahead in its quest for excellence.
With best wishes
T M BHASIN
Chairman and Managing Director