Bank Of India

The Board of Directors have pleasure in presenting the Bank’s
 Annual Report along with the audited statement of accounts and
 the cash flow statement for the year ended 31st March 2008.
 
 PERFORMANCE HIGHLIGHTS
 
 FINANCIAL PARAMETERS
 
 * Operating profit Rs. 3701 crore.
 
 * All time high Net Profit of Rs. 2009 crore, recording 79%
 growth over previous year.
 
 * Capital Adequacy Ratio at 12.95% as against 11.75%, the
 previous year.
 
 * Net Worth Rs. 8628 crore, growth of 57% over March 2007.
 
 * Book Value per share Rs. 164.05 (Rs.  112.75 previous year)
 
 * Gross NPA ratio declined to 1.68 % from 2.42% at March-end
 2007.
 
 * Net NPA ratio declined to 0.52% as against 0.96% as on
 31.03.07.
 
 * Total business reached at Rs. 264,805 crore recording a growth
 of Rs. 58,132 crore (28.1%). Domestic business grew by 31.8% to
 reach the level of Rs. 216,804 crore.
 
 * Total deposits increased by Rs. 30,130 crore to reach the
 level of Rs. 150,012 crore, a growth of 25.1%. Domestic deposits
 increased by 32.4% to reach the level of Rs. 125,416 crore.
 Share of low cost deposits in the domestic deposits is 36% as on
 31.03.08.
 
 * Gross credit touched Rs. 114,793 crore, growth by 32.3% with
 domestic credit recording a growth of 30.9% to reach level of
 Rs.91,388 crore.
 
 * Priority Sector lending constituted 49.33% of Net Adjusted
 Bank Credit and the share of Agricultural Credit to Net Adjusted
 Bank Credit stood at 19.73%.
 
 * Credit to SME sector grew from Rs.16,211 crore to Rs.20,400
 crore (25.84% growth as against 22.17% growth during the
 previous year).
 
 * Schematic Retail Credit grew by 22% from Rs. 6,235 crore to
 Rs. 7,607 crore.
 
 * Export Credit registered a rise of Rs. 1402 crore, i.e.,
 26.63% growth.  NEW PRODUCTS & SERVICES
 
 * SB Diamond Customers (SB account holders having average
 quarterly balance of Rs. 1 lac & above) apart from enjoying
 services of a Relationship Manager, now provided with free air
 accidental insurance upto Rs. 5 lacs.
 
 * Sale of gold coins of 99.9% purity was launched in a big way.
 During the year 1.05 lac gold coins were sold which earned an
 income of Rs. 12 crore.
 
 * Akshay Urja Shops under Retail Trade category and Star
 Dhanvantari Suvidha Scheme & Scheme for Tax Return Preparers
 under P&SE category were introduced. Features of our
 Priyadarshini Yojna, exclusively for women, have been revamped.
 
 * Star Mitra Personal Loan scheme, for extending financial
 support to physically challenged persons and Star Mahila Gold
 Loan Scheme to specifically cater to the needs of women were
 introduced as our commitment under “Relationship beyond
 banking”.
 
 * Core Banking Solution implemented in 1525 branches.
 
 * Around 13000 ATMs made available to customers through shared
 ATMs network, besides the network of ATMs of VISA and Master
 Card.
 
 * RTGS enabled branches numbered 1442 and NEFT enabled branches
 1400.
 
 * Payment hub created to integrate application of various
 payment systems like RTGS, SWIFT, etc.
 
 * On line facility made available for Educational Loan
 Application.
 
 * Solar Power System installed in 65 rural and semi-urban
 branches facing acute power shortage.
 
 * Technologies availed / implemented like Mobile technology to
 facilitate financial inclusion / payment solutions / e-commerce
 activities, wireless/V-SAT connectivity at rural branches and
 Credit Card details through Internet Banking.
 
 BUSINESS INITIATIVES
 
 * Strategic Business Units or SBUs based on customer
 segmentation have been formed consequent to Organizational
 Restructuring.  Branches have been categorised according to
 their business focus, i.e., Resource Centre, Profit Centre,
 Priority Sector Centre and General Banking Centre.
 
 * Special focus on SME financing is given through 50 specialised
 SME branches in the country.
 
 * The retail credit business is receiving continued focus
 through the operationalised ‘Retail Hubs’ at 20 centres across
 the country working on the concept of single window banking.
 
 * To achieve objectives of financial inclusion, information
 technology initiatives implemented and the concept of business
 correspondents and business facilitators introduced.
 
 * A comprehensive domestic travel insurance scheme under tie-up
 with NICL has been launched specially for the Bank of India
 account holders.
 
 * Tie-up entered with ING Investment Management and Franklin
 Templeton Investments for sale of their mutual fund products,
 thereby increasing number of tie up arrangement with five
 leading MFs.
 
 * A stake of 76% acquired in PT Bank Swadesi Tbk, Indonesia for
 expanding international operations.
 
 FINANCIAL REVIEW
 
 Financial Performance
 
 The Bank recorded an operating profit of Rs. 3701.21 crore,
 growth of 54.54% as against previous year’s growth of 40.78%.
 Net Profit increased to Rs. 2009.40 crore recording growth of
 78.90% as against previous year’s growth of 60.12%.
 
 The Net Interest Margin marginally declined largely due to fall
 in yield on investment. However, due to rise in volume of
 business mix by 28.13% (from Rs. 206672 crore to Rs. 264,805
 crore), net interest income grew by 22.93%.
 
 Non-interest income got quantum leap by 35.44%. Non interest
 income has covered 80% of operating expenses as against 60% in
 the previous year.
 
 The Financial performance of the Bank for the year 2007-08 is
 summarised below:
 
                                                  (Amount in Rs. crore)
 
 Particulars                                           2006-07
 
 Net Interest Income                                   3440.47
 
 Non-Interest Income                                   1562.95
 
 Operating Expenses                                    2608.43
 
 Operating Profit                                      2394.99
 
 Provisions / Contingencies                            1271.82
 
 Net Profit                                            1123.17
 
 Earnings per share              ( Rs.)                  23.04
 
 Book value per share            ( Rs.)                 112.75
 
 Return on Average Networth       (%)                    22.28
 
 Return on Average Assets         (%)                     0.88
 
 2007-08       (%) Growth(%)
 
 4229.27               22.93
 
 2116.93               35.44
 
 2644.99                1.40
 
 3701.21               54.54
 
 1691.81               33.02
 
 2009.40               78.90
 
 40.83                 77.21
 
 164.05                45.50
 
 28.44                     -  
 
 1.25                      -
 
 Key Financial Ratios are presented below:
 
                                                (Percentage)
 Parameters                                   2006-07     2007-08
 
 Yield on Advances                              8.52          9.34
 
 Yield on Investment                            6.59          6.83
 
 Yield on Funds                                 7.03          7.71
 
 Cost of Deposits                               4.31          5.23
 
 Cost of Funds                                  4.32          5.07
 
 Net Interest Margin 
 (excluding amortisation exp.)                  3.20          3.11
 
 Net Interest Margin 
 (including amortisation exp.)                  2.99          2.95
 
 Non Interest Income to Operating Expenses     59.92         80.04
 
 Other Income to Average Working Fund           1.23          1.32
 
 Operating Expenses to Average Working Fund     2.05          1.65
 
 Staff Expenses to Average Working Fund         1.27          1.03
 
 Other Operating Exp. to Average Working Fund   0.78          0.62
 
 Asset Utilisation Ratio                        1.88          2.31
 
 Non-Interest Income to Total Income           14.89         14.63
 
 Non-Interest Income to Net Income             31.24         33.36
 
 Cost to Net Income                            52.13         41.68
 
 BASEL-I                                          BASEL-I
                      Amount     CRAR             Amount           CRAR
 
 Tier I Capital         5825     6.53%              9439          8.19%
 
 Tier II Capital        4667     5.22%              5487          4.76%
 
 Total Capital         10492    11.75%             14926         12.95%
 
 Risk Weighted Assets  89261                      115280
 
 BASEL-II
 
 Amount            CRAR
 
  9409              7.70%
 
  5303              4.34%
 
  14712             12.04%
 
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