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Updated:27 Oct, 2020, 15:59 PM IST

Change Change %
-0.10 -0.18%

Updated:27 Oct, 2020, 16:01 PM IST


Dear Esteemed shareholders,

I am privileged to address this message to all our stakeholders as the Chairman of The Federal Bank Limited from September 2012.

I have been on the Board of Directors for the last seven years; both as an enabler and as part of a fulfilling journey of the transformation process of your Bank.

The Annual Report for this fiscal 2012–13 therefore reflects both the resilience and positive performance of the Bank, despite the adverse global and domestic economic environment.

As you are aware, the year began with continuing crises in the Euro–zone as well as stresses in the Western banking system – that resulted in a contagion impact sweeping across the emerging economies, including India.

The U.S. economy started early in the fiscal to show signs of anemic recovery. Both the Federal Reserve and the U.S. authorities have therefore remained anxious to sustain the growth momentum through monetary stimulus –– such that other countries in Europe, Japan, China and elsewhere began to emulate with their own accommodative monetary stance.

India was naturally impacted by the headwinds drifting down from the developed economies. However, due to persistent domestic inflationary pressures, the monetary policy remained tight. During the year, manufacturing and other productive sectors declined – causing Gross Domestic Product (GDP) growth to dip in from 6.2% in 2011–12 to about 5%.

Despite this, during the fiscal, there was a good flow of NRI remittances and investments by Foreign Institutional Investors (FIIs) –– partly stemming from the falling Indian Rupee against major currencies.

The policy–makers made determined efforts, especially in the last few months of the fiscal, to create a more conducive business environment; focusing particularly on Foreign Direct Investments (FDIs).

All these policy measures augur well for 2013–14 and beyond.

Your Bank's performance

Despite the external challenges, your Bank improved its performance during the year in vigorous pursuit of its strategic business objectives.

The Bank invested in expanding its operating network; with the addition of 153 branches and 174 ATMs during the financial year to record 1103 branches and 1179 ATMS as at the 31st of March 2013.

Net profit increased by 7.9% and Earnings Per Share (EPS) improved from Rs.45.41 to Rs.49.00. Book value per share grew from Rs.333.61 to Rs.364.74.

I am happy to advise that the Board of Directors recommend a dividend for the year at the same level as in the previous year i.e. of Rs.9.00 per share, on par.

Excellent relationships with our customers and stakeholders

During the fiscal, the Bank increased the number of customers that it serves effectively across its operating geographies.

Federal Bank has always reached out to the Non–Resident Indian (NRI) diaspora and established tremendous connectivity with its customers overseas. This year, as in the recent past, witnessed a step–up in terms of remittances and other business flows from NRIs.

I have personally had the opportunity to engage with several of these NRI clients; especially those in the GCC. It is therefore, a matter of pride for me to hear from them of their appreciation and acknowledgement of Federal Bank's outstanding service quality and empathetic sensitivities to their needs – both at home and abroad.

The Bank has also continued to customise its products and services; so as to deliver differentiated and innovative products.

I am encouraged by the Bank's careful build–up of businesses in the SME segments in their chosen clusters of branches in the Western and Northern India; while deepening its domestic franchise in Kerala and in South India.

Growth in Progress

Strategically, the Bank's governance quality and management bandwidth are also being enhanced to cope with the emerging rigours of the banking and financial sector.

The Bank remains steadfastly committed to build on its core values, instilled in us by the Bank's Founder – the late Shri K.P. Hormis, and deliver a consistently positive growth in value for all our stakeholders.

We are grateful to all the authorities and regulators for their support and guidance in our endeavours.

Over the years, your Bank has invested in its human resources and technology as well as strengthened its technical and professional teams – through both training & development as well as a careful nurturing of talent and experience across the Bank and its subsidiary.

In conclusion, may I acknowledge the excellent dedication and contribution of all of the Bank's staff members i.e. the Federal family.

Suresh Kumar


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