The Board of Directors is pleased to present the Seventeenth Annual
 Report of the Bank together with the Audited Statement of Accounts,
 Auditors Report and the report on business and operations of the Bank
 for the financial year ended 31 March, 2011.
 
 FINANCIAL PERFORMANCE
 
 The financial highlights for the year under review are presented below:
 
                                                      (Rs. in crores)
 
 PARTICULARS                        2010-11      2009-10       Growth
 
 Deposits                         189,237.80    141,300.22     33.93%
 
 Out of which
 
 - Savings Bank Deposits           40,850.31     33,861.80     20.64%
 
 - Current Account
 Deposits                          36,917.09     32,167.74     14.76%
 
 Advances                         142,407.83    104,340.95     36.48%
 
 Out of which
 
 Retail Advances                   27,759.23     20,820.73     33.32%
 
 Non-retail
 Advances                         114,648.60     83,520.22     37.27%
 
 Total
 Assets/Liabilities               242,713.37    180,647.85     34.36%
 
 Net Interest
 Income                         6,562.995,00          4.49     31.14%
 
 Other Income                       4,632.13      3,945.78     17.39%
 
 Out of which
 
 - Trading Profit                     496.97        822.38    (39.57%)
 
 . Fee & other income               4,135.16      3,123.40     32.39%
 
 Operating Expenses excl.
 depreciation                        4,489.8     43,475.40     29.19%
 
 Profit before depreciation, 
 provisions and tax                 6,705.28      5,474.87     22.47%
 
 Depreciation                         289.59        234.32     23.59%
 
 Provision for Tax                  1,747.17      1,336.83     30.70%
 
 Other Provisions & Write
 offs                               1,280.03      1,389.19    (7.86%)
 
 Net Profit                         3,388.49      2,514.53     34.76%
 
 Appropriations:
 
 Transfer to Statutory
 Reserve                             847.126         28.63     34.76%
 
 Transfer to/(from) Investment
 Reserve                             (14.94)         14.88       - 
 
 Transfer to Capital Reserve           4.76         223.92    (97.87%)
 
 Transfer to General Reserve         338.85           0.31       -
 
 Proposed Dividend                   670.36         567.45     18.14%
 
 Surplus carried over to 
 Balance Sheet                     1,542.34       1,079.34     42.90%
 
 (1) Excluding Merchant 
 Exchange Profit
 
 KEY PERFORMANCE INDICATORS                         2010-11    2009-10
 
 Interest Income as a percentage of working funds*    7.49%     7.73%
 
 Non-Interest Income as a percentage of 
 working funds*                                       2.29%     2.62%
 
 Net Interest Margin                                  3.65%     3.75%
 
 Return on Average Net Worth                        20.13%    19.89%
 
 Operating Profit as a percentage of working funds*   3.17%     3.48%
 
 Return on Average Assets                             1.68%     1.67%
 
 Profit per employee**                             14.35 lacs 11.63 lacs
 
 Business (Deposits less inter-bank 
 deposits + Advances) per employee**               13.66 crores 1.11  
                                                                crores
 
 Net non performing assets as a percentage 
 of net customer assets ***                          0.26%     0.36%
 
 - Working funds represent average total assets.
 
 ** Productivity ratios are based on average number of employees for the
 year.  *** Customer Assets include advances and credit substitutes.
 
 Previous year figures have been regrouped wherever necessary.
 
 In 2010-11 both business and earnings grew strongly with the Bank
 reporting a net profit of Rs.3,388.49 crores for the year ended 31 March,
 2011, rising 34.76% over the net profit of Rs.2,514.53 crores in the
 previous year. The solid growth of business across segments has been
 reflected in a set of robust financial indicators.
 
 The Banks total income increased 26.97% to reach Rs.19,786.94 crores
 during 2010- 11, compared to Rs.15,583.80 crores last year. Operating
 revenue during this period increased 25.08% to Rs.11,195.12 crores while
 operating profit increased by 22.42% to Rs. 6,415.69 crores. The growth
 in revenues may be attributed to the performance of the Banks core
 income streams: net interest income (Nil), fee and other income. Nil
 increased by 31.14% to Rs.6,562.99 crores from ^5,004.49 crores last
 year, while fee and other income increased by 17.39% to Rs.4,632.13
 crores from ^3,945.78 crores last year. Nil increased by 31.14% as a
 result of healthy growth of both assets and low-cost Current Account
 and Savings Bank (CASA) deposits, on a daily average basis. During the
 year, total earning assets, on a daily average basis, rose 34.70% to
 Rs.179,573 crores from Rs.133,309 crores last year. A 32.81 % growth of
 low-cost CASA deposits, on a daily average basis, from ^44,839 crores
 last year to Rs.59,551 crores, helped the Bank contain funding costs,
 which had risen in the last quarter of the year due to the hardening of
 interest rates on term deposits.
 
 Other income comprising fees, trading profit and miscellaneous income
 also rose 17.39% to ^4,632.13 crores in 2010-11 from Rs.3,945.78 crores
 last year. Fee income constituted 33.86% of the operating revenue of
 the Bank and rose 29.59% to Rs.3,790.37 crores from Rs.2,924.96 crores last
 year. The Bank earns fee income from a diverse set of products and
 businesses such as client- based merchant foreign exchange trade,
 service charges from account maintenance, transaction banking including
 cash management services, syndication and placement fees, processing
 fees from loans and commission on non-funded products such as letters
 of credit and bank guarantees, inter-change fees on ATM-sharing
 arrangements and fee income from the distribution of third-party
 personal investment products. During the year, proprietary trading
 profits fell 39.57% to Rs.496.97 crores from Rs.822.38 crores last year,
 primarily due to adverse market conditions in the debt and equity
 markets. Miscellaneous income was buoyant, rising 73.75% mainly due to
 strong recoveries of loans and derivative receivables written-off in
 previous years. During the year, such recoveries amounted to Rs.325.22
 crores compared to Rs.174.43 crores last year.
 
 During the year, the operating revenue of the Bank increased 25.08% to
 Rs.11,195.12 crores from Rs.8,950.27 crores last year. The core income
 streams (Nil, fee and miscellaneous income) constituted 95.56% of the
 operating revenue, reflecting the stability and sustainability of the
 Banks earnings. Operating expenses increased by 28.84% to ^4,779.43
 crores from Rs.3,709.72 crores last year, on the back of the continuing
 growth of the Banks network and infrastructure required for supporting
 existing and new businesses. During the year, the Cost: Income ratio
 was 42.69% compared to 41.45% last year.
 
 During the year, the operating profit of the Bank increased 22.42% to
 Rs.6,41 5.69 crores from Rs.5,240.55 crores last year.  During this period,
 provisions (excluding provisions for tax) charged to the Profit & Loss
 account were Rs.1,280.03 crores compared to Rs.1,389.19 crores last year.
 Of this, provisions for loan losses were ^955.12 crores compared to
 Rs.1,357.04 crores last year, while the provision for standard assets was
 Rs.166.16 crores. The Bank accelerated its provisioning requirements in
 some portfolios as a measure of prudence, increasing the overall
 provision coverage. The Bank also provided Rs.15.06 crores compared to
 Rs.56.47 crores last year against restructured assets. During 2010-11,
 the Bank restructured loans of Rs.404 crores, significantly lower than
 Rs.1,633 crores last year. The Bank continued to maintain a generally
 healthy asset-quality with a ratio of Gross NPAs to gross customer
 assets of 1.01% compared to 1.13% last year and a Net NPA ratio
 (percentage of Net NPAs as percentage of net customer assets) of 0.26%
 compared to 0.36% last year. With higher levels of provisions, built
 over and above regulatory norms during the year, the Bank has further
 improved its provision-coverage to 80.90% (after considering prudential
 write-offs) from 72.38% last year.
 
 Due to a consistent trajectory of core earnings, there has been an
 all-round improvement in various financial metrics. The Return on
 Equity (RoE) improved to 20.13% from 19.89% last year. Basic Earnings
 Per Share (EPS) rose to Rs.82.95 from Rs.65.78 last year, while the Diluted
 Earnings Per Share was Rs.81.61 compared to Rs.64.31 last year. The Book
 Value Per Share increased from Rs.395.99 on 31 March, 2010 to Rs.462.77 on
 31 March, 2011, while Return on Assets (RoA) improved to 1.68% from
 1.67% last year. Employee productivity has also improved with Profit
 per Employee increasing to Rs.14.35 lacs from ^11.63 lacs last year and
 Business per Employee increasing to Rs.13.66 crores from Rs.11.11 crores
 last year. Hardening of interest rates on Term Deposits in the final
 quarter of the year pushed up the cost of funds, compressing the Net
 interest Margin by 10 basis points of the year to 3.65% from 3.75% last
 year. The quarterly NIMs during the year were as follows: 3.71% in Q1,
 3.68% in Q2, 3.81% in Q3 and 3.44% in Q4.
 
 The total assets of the Bank were Rs.242,713 crores, rising 34.36% from