It is indeed a pleasure and privilege for me to address this Annual General Meeting. This is the 8th Annual
General Meeting since we went public in November 2002 and the second in my tenure at Canara Bank.
 
 We are also happy that this day marks the 41st anniversary of nationalization of 14 major banks in the year
1969. Public ownership of banks, besides preventing the system from plunging into periodic crises, as
recently exemplified by the global financial crisis, delivers many growth and welfare benefits. This is why
it is manifestly clear that the nationalization of banks not only significantly extended the outreach of the
Indian banking system but also enhanced the strength and resilience of the Indian banking system. We would
like to assure you all that Canara Bank will always continue to sub-serve the society in the true spirit of
nationalization of banks.
 
 During the year 2009-10, we recorded impressive achievements in various fields. These include crossing of
three major milestones during 2009-10. First, the total business crossed the landmark figure of Rs.400000
crore mark, signifying a growth of 24.3%. Secondly, Net Profit crossed Rs.3000 crore to reach Rs.3021 crore,
up by 45.8%. Thirdly, the Bank's branch network crossed the 3000 mark to reach 3046, with an addition of 314
branches during the year.
 
 All these factors taken together have catapulted the Bank into the league of top performing Banks. This is
clearly a historic occasion - an occasion for all of us to rejoice in the all round progress of the Bank.
 
 I am also happy to inform you that in Karnataka, the state of our origin, we are now the Number One Bank in
terms of business.
 
 As in the preceding year, your Bank successfully met all targets under Statement of Intent (SoI) committed
to the Government. These are, by any standards, impressive achievements, particularly when looked at against
the background of macro-economic downturn, the slowdown in lending in the banking industry in the wake of
global financial meltdown and the increasingly competitive and transforming environment of the financial
sector.
 
 I am extremely happy to be able to maximize returns for all segments of our stakeholders. I am confident
that with your support and measures focused on business growth, structural
 
 transformation and profitability, we would significantly strengthen our position despite global and domestic
challenges. More specifically, the measures initiated by us relate to Marketing and Customer Focus,
Information Technology and Business Processes, Human Resources and Agri- business. We are, therefore,
confident of consolidating our position and overcoming multiple challenges.
 
 The final accounts of the Bank and the Directors' Report for the year ended
 
 March 2010 are already with you and with your permission I take them as read. Let me,
 
 therefore, just hit the high spots of our remarkable performance.
 
 GLOBAL AND INDIAN LANDSCAPE
 
 2009-10 was a year of stabilization and recovery for the global economy post global financial crisis and the
subsequent economic recession. The global outlook improved significantly and global recovery has progressed
better than previously anticipated. The emerging economies, which are increasingly influenced by domestic
growth factors, continue to drive global recovery.  According to the latest World Economic Outlook published
by International Monetary Fund (IMF) in April 2010, world economy's growth is expected to grow by 4.2% in
2010 as against a decline of 0.6% in 2009.
 
 India was one of the first countries to recover from the global crisis on account of its strong domestic
demand and healthy financial sector. Major macro-economic parameters, such as, industrial growth,
manufacturing and exports have been showing steady increase after the growth moderation observed in 2008-09.
India's economic growth projected at 8% for FY11 by the RBI in its Annual Policy Statement would make India
the second largest expanding economy after China.
 
 With the economy gaining traction, the banking system in India is widely expected to play a major role in
the broad-based inclusive growth process of the Indian economy. Bank credit covers about 55% of GDP.
Extensive support by banks to micro, small and medium enterprises (MSMEs), agriculture and other productive
segments and the thrust on financial inclusion as an integral element of the broader inclusive growth
strategy makes banks an important enabler in facilitating India's economic growth and development.
 
 REVIEW OF PERFORMANCE- HIGHEST EVER LEVEL OF BUSINESS
 
 I am delighted that the financial results of your Bank have been widely covered
 
 in both print and electronic media. With your permission, ladies and gentlemen,
 
 I would, therefore, highlight some basic numbers of our exceptionally strong results. What
 
 makes this performance particularly striking is the fact that we outperformed despite the
 
 turbulence in financial markets, global, macro-economic and banking challenges, including
 
 volatility of exchange and interest rates.
 
 In sync with its strategic focus, the Bank's core deposits, comprising retail and Current and Savings
Accounts (CASA) deposits, rose robustly by 22% during the year. Responding to sustained efforts, special
campaigns and motivational incentives, the Bank added an incremental CASA deposit of Rs.12094 crore. The
ratio of CASA deposits to aggregate domestic deposits stood at 29.85% as at March 2010. With a CASA per
branch at Rs.22.4 crore, the Bank continues to be one of the best among the peers.
 
 Total Deposits of the Bank surged by 25.6% to reach Rs. 2,34,651 crore as at March 2010.  Concerted focus on
mobilization of low cost deposits and strong resistance to high cost preferential rate deposits helped the
Bank to reduce the cost of deposits to 6.12% from March 2009 level of 6.87%. The Bank's advances (net) grew
robustly by 22.5% in FY10 to reach Rs.  1,69,335 crore. In quantum terms, credit rose significantly by over
Rs.31000 crore.
 
 We delivered significant growth this year with the Bank's global business aggregating Rs.  4,03,986 crore as
at March 2010. The credit-deposit ratio of the Bank stood at 72.16%. The productivity, measured by Business
Per Employee improved to Rs.9.83 crore and business per branch grew to reach Rs.132.63 crore, making it one
of the highest among the peer banks.  Sustained efforts led to an accretion of 2.54 million clients during
the year. The clientele base of the Bank rose to 37.34 million, comprising 32.85 million deposit accounts and
4.49 million borrowal accounts.
 
 PROFIT AT A RECORD LEVEL
 
 All our efforts during FY10 were aimed at improving profits and profitability of the Bank. Net profit of the
Bank rose to Rs. 3021 crore, recording a robust growth of 45.79%. This is clearly a symbolic landmark, which
shows the power of performance. With a sharp focus on cost rationalization across functions, substantial
improvement in operating efficiency, stress on our core competencies, generation of new and stable revenue
streams and efficient capital deployment, we are confident of doing even better in future.
 
 Total income recorded a y-o-y growth of 11.22% to reach Rs.21610 crore, compared to Rs.19430 crore for the
preceding financial. Sustaining the core earnings growth, the Bank's interest income recorded a y-o-y growth
of 9.54%, driven by 8.84% growth in interest on loans/advances.  Growth of interest expenditure was contained
at 5.40%. Consequently, our net interest income recorded a 20.41% growth, helping the Bank's net interest
margin (NIM) to improve to 2.80%.
 
 MAXIMISING RETURNS TO SHAREHOLDERS
 
 The interest of our shareholders has always received focused attention by us.
 
 The pursuit of multiple growth drivers has enabled the rapid transformation of your Bank in
 
 providing superior returns, delivering growth and generating significant value for our
 
 shareholders. This is clearly reflected in the fact that the dividends have been progressively rising from
66% in FY06 to 70% in FY07 to 80% in FY08 and FY09 and further to 100% in FY10. While book value increased to
Rs.305.83 as at March 2010 compared to Rs.244.87 recorded for the last financial, Earnings per Share rose from
Rs.50.55 to Rs.73.69 for the year ended March 2010.
 
 SIGNIFICANTLY EXPANDED OUTREACH AND DELIVERY CHANNELS
 
 Delivery channels have further expanded for closer customer proximity and business potentiality.  Number of
branches increased to 3046, adding 314 new branches during the year. Apart from 118 specialized service
branches, the Bank has 38 Extension Counters.
 
 The Bank's IT initiatives led to significant gains in business apart from enhancing customer convenience. As
at March 2010, the Bank had 2017 ATMs spread across 728 centres, including 745 offsite ATMs and 180 ATMs in
railway stations. It has also set up 150 e-kiosks for booking railway tickets. Bank also has 24 x 7 ATM
cheque deposit facility for the debit card holders.  Focusing on increasing ATM usage, the Bank added a
significant 1 million debit cards during the year, taking the tally under debit card base to about 5 million
as at March 2010.
 
 RAPID INFOTECH GROWTH
 
 The Bank made considerable progress in technology-delivery channels. As on 16th July, 2010, the number of
Core Banking Solution (CBS) branches rose to 2681 branches, covering 96% of business of the Bank. The Bank
also expanded its number of Anywhere Banking Branches (AWB) to 2091 and Internet and Mobile Banking Branches
(IMB) to 2681.
 
 Under the payment and settlement system, almost all branches of the Bank have been covered under RTGS and
NEFT facilities. E-payment of excise and service tax, direct tax and custom duty has also been implemented in
several branches under CBS setup. Centralized Pension Processing Cell was introduced and 84 branches of
Bangalore Metro Circle Office have been covered.
 
 GREATER CUSTOMER ORIENTATION
 
 With banks now moving from transaction to customer-centric solutions, customer focused orientation
necessitates renewed emphasis. This is why enterprise-wise quality improvement programmes need to be pursued
with an accent on customer service to create new, clearly differentiated value. We have identified prompt and
responsive customer service as a 'driver of change' in an industry marked by intensified competition and
increased business complexities.  Measures aimed at exceeding customer expectations through increased
attention to quality and service included adoption of minimum standards for fair and transparent treatment to
individual customers, prescribed by the Banking Codes and Standards Board of India (BCSBI). The Bank
 
 made arrangements for providing copies of the 'Code of Bank's Commitment to Customers' to customers at
branches.
 
 An informative booklet containing all the relevant information on 'Frequently Asked Questions by Customers'
was made available at all branches towards better Customer Service. The Policy guidelines relating to
Collection of Cheques / Instruments, Grievance Redressal Mechanism and Compensation Policy were placed on the
Bank's website for use of the customers. The Bank has started a Call Centre <1800 425 0018> for providing
information on various products / services.  The number of calls received by the Call Centre during the year
was more than 7.5 lakh.
 
 REMARKABLE CONTRIBUTION TO NATIONAL OBJECTIVES
 
 Your Bank's assiduous pursuit of avowed national objectives has always evoked overwhelming appreciation. In
accordance with the Government's steadfast commitment to meet the needs of agriculture, MSMEs and other
sectors in a greater and more substantial measure, advances to the priority sectors rose by Rs.10547 crore to
reach Rs.59310 crore, accounting for 43.92% of the Bank's adjusted net bank credit (ANBC) well above the 40%
norm. With a disbursal of Rs.4907 crore, outstanding agricultural credit reached Rs.25051 crore as at March
2010 covering 29 lakh borrowers. Agriculture credit as a proportion of ANBC rose to 18.55%, surpassing the
mandatory targeted level of 18%.
 
 The Bank issued 3.02 lakhs Kisan Credit Cards (KCC) during the year. Cumulative tally under KCC went up to
30 lakhs. The Bank so far has formed 3.2 lakhs SHGs and credit linked 2.75 lakhs SHGs as at March 2010.
Advances to SHGs rose to Rs.926 crore as at March 2010, spreading over 97498 SHGs.
 
 With Micro, Small and Medium Enterprises (MSME) emerging as the potential growth drivers of the Indian
economy, the Bank's MSME portfolio recorded a healthy growth of over 30% to reach Rs.31074 crore.
 
 The Bank continues to be number one among nationalized banks in terms of education loan portfolio. Education
loans recorded a significant growth of 25.9% to reach Rs.2896 crore covering 1.71 lakhs students.
 
 Retail lending operations of the Bank regained the growth momentum during the year. While disbursals under
the retail lending stood at Rs. 8653 crore, the outstanding advances rose to Rs.23902 crore, accounting for
14.59% of the net credit. The Bank took several measures during the year to expand retail credit, including
special packages for housing and auto loans.
 
 PIONEERING FINANCIAL INCLUSION
 
 The Bank consistently promoted financial inclusion across the country. The Bank formulated a scheme to bring
all financial inclusion products under one umbrella called 'Canara Nayee Disha' for financial deepening under
the second phase. Notably, the Bank achieved Total Financial Inclusion in all the 26 Lead the Districts
spread over five States, namely, Karnataka, Kerala, Tamil Nadu, Bihar and Uttar Pradesh. The State of Kerala,
where Canara Bank is the Convenor of State Level Bankers Committee, was the first major State to achieve total
financial inclusion in the year 2007.
 
 The Bank mobilized 4.50 lakh no-frill accounts (CanSaral) during 2009-10 and reached a cumulative level of
21.80 lakh since inception. The total savings in the no-frill accounts reached a level of Rs. 382.50 crore.
The Bank undertook several technology initiatives to further financial inclusion process, such as,
multi-lingual bio-metric ATMs, voice-enabled mobile bio- metric ATM and launching of Smart Card project.
Electronic Benefit Transfer (EBT) scheme for disbursement of Government benefits like wages under MGNREGA and
Social security Pension was launched by RBI on 22.03.2010 at Bangalore. The Bank is participating in three
districts, viz., Chitradurga, Bellary and Gulbarga in Karnataka.
 
 Canara Bank is the first bank in the country to launch mobile Biometric-voice enabled ATM in Bangalore
rural. In a novel initiative, the Bank has launched 'Gramin Vikas Vahini'- vehicles to spread financial
literacy. The Bank has so far formed 1231 Farmers' Clubs to promote financial inclusion. The Bank started
Credit Counseling Centre in three districts in Karnataka to enhance financial literacy. In order to help the
urban poor, the Bank opened Exclusive Micro-finance branches in nine urban centres, viz., Bangalore, Madurai,
Chennai, Coimbatore, Hyderabad, Lucknow, Chandigarh, Amritsar and Mumbai. These branches will educate the slum
dwellers and urban poor about the group mechanism and provide the credit facilities.
 
 ADVANCING RURAL DEVELOPMENT
 
 Your Bank's strategic commitment to rural development and rendering of other socially beneficial services
has always been well-recognised. The Bank has catalysed employment to 2.38 lakhs unemployed youth with a
settlement rate of 70% by training unemployed rural youth and assisting them in setting up their own
businesses through its 23 Rural Development and Self- Employment Training Institutes (RUDSETIs). Similarly
under Canara Bank Centenary Rural Development Trust, the Bank has established exclusive training institutes
to promote entrepreneurship development among rural youth and encourage them taking up self- employment
activities.
 
 During the year, 9 new training institutes were opened at Aligarh and Etah districts in Uttar Pradesh,
Sheikhpura district in Bihar, Calicut and Palakkad districts in Kerala, Nilgiris, Erode, Theni and Dindigul
in Tamil Nadu enhancing the number of such training institutes to 26. These institutes have so far trained
94935 unemployed youth, comprising 60% women with an
 
 impressive settlement rate of 70%. The Bank is also co-sponsoring Deshpande-RUDSETI at Haliyal in Karnataka
and Andhra Pradesh Bankers Institute of Rural Development (APBIRED) at Hyderabad in Andhra Pradesh. As a
responsible corporate social citizen, the Bank has donated hi-tech and solar powered 'Mobile Sales Van' to
assist women entrepreneurs, SHGs and artisans to market their products.
 
 TREASURY & INTERNATIONAL OPERATIONS
 
 Aggregate investments of the Bank, as at March 2010, increased to Rs.69677 crore. The Bank has been
effectively managing the investment portfolio. The trading profit during the year was higher at Rs.872 crore,
as against Rs.675 crore in the previous year. The yield on investments stood at 7.52% as at March 2010.
 
 Foreign Business Turnover of the Bank, as at 31st March 2010, aggregated to Rs.127614 crore.  Foreign
business turnover comprised Rs.45777 crore under exports, Rs.37235 crore under imports and Rs.44602 crore
under remittances. Outstanding export credit of the Bank moderated to Rs.8966 crore, compared to Rs. 8967
crore during the corresponding period a year ago, indicating economic downturn and decline in exports
demand.
 
 The Bank's overseas presence covered four branches at London, Hong Kong, Shanghai and Leicester (opened
during the year) and a joint venture bank, namely, Commercial Bank of India LLC in Moscow. The Bank has
already obtained approval from the RBI to open 10 branches/offices in Johannesburg, Frankfurt, Muscat,
Manama, QFC-Qatar, New York, Sao Paulo, Dar-er-Salam, Tokyo and Sharjah, out of the 20 international
financial centres identified for global expansion in the medium term. The Bank is in the process of obtaining
regulatory approvals from the host countries for opening branches in the above centres.
 
 ASSET QUALITY, RISK MANAGEMENT AND BASLE II COMPLIANCE
 
 In tune with the industry and stressed economic conditions, the gross NPA level of the Bank rose to Rs. 2590
crore during the year. Notwithstanding the above, the Bank could contain its gross NPA ratio to 1.52% compared
to 1.56% in the previous year. The Bank's gross NPA ratio continues to be one of the lowest among the peers.
Net NPA ratio stood at 1.06% as at March 2010. Cash recovery during the year aggregated to an all time high
of Rs. 1575 crore, well exceeding the preceding year's cash recovery of Rs. 1289 crore.
 
 The Bank has effectively implemented sound risk-mitigation practices to attain global best practices, which
are aimed at striking an optimal balance between competitiveness and profitability and in conformity with the
Basle II framework and RBI guidelines. Capital to Risk Weighted Assets Ratio (CRAR) worked out to 13.43%, well
above the regulatory minimum of 9%.
 
 We have put in place well-defined risk management policy and procedures, which are aimed at minimizing
various risks to which our businesses are exposed to because of the very nature of banking operations as well
as their strategic actions. The Bank has adopted Standardized Approach for credit risk, Modified Duration
Approach for market risk and Basic Indicator approach for operational risk.
 
 CORPORATE GOVERNANCE
 
 The Bank's well-defined “Corporate Governance Mechanism” harmonises the interests of all stakeholders. The
Bank's corporate governance policy attempts to benchmark with the best global policies. Towards this end, it
promotes corporate fairness, transparency, accountability, efficiency and fairness in the basic pursuit of
aligning the interests of all segments of the stakeholders as also the society at large.
 
 ACCENT ON HUMAN CAPITAL
 
 To ease human resource management process, the Bank implemented Human Resource Management Solution (HRMS),
an efficient centralized solution covering all HR activities.
 
 Your Bank's human resource policies have been repeatedly fine-tuned in line with the transforming banking
scenario. Strategic HR interventions like SPANDAN for bringing attitudinal change among front line staff,
PRATIBHA for grooming in-house talents in varied specialized areas were continued in 2009-10. Other
significant HR instruments, such as, Quality Circles, Study Circles, Staff Meetings and Brain Storming
Sessions have been implemented for effective team building and collective excellence.
 
 Of the over 43,000 employees as at March 2010, the number of Scheduled Castes and Scheduled Tribes together
constituted 25.9% of total staff strength of the Bank. The Bank has been strictly adhering to the Reservation
Policy in respect of Scheduled Castes and Scheduled Tribes as per the guidelines of the Government of India.
 
 EXPANDING ROLE OF CANARA BANK
 
 The strengthening competitive capability of your Bank's businesses has enabled it to aim at a total business
of Rs.5,00,000 crore by March 2011, comprising total deposits of Rs.2,85,000 crore and total advances of Rs.
2,15,000 crore. Your Bank will continue to focus on core business, with the objective of augmenting profits
and profitability. Productive segments like Agriculture, Corporates, MSMEs, Retail including housing, auto
and education, infrastructure and other potential growth segments will significantly drive the Bank's credit
growth. All branches are slated for full coverage under CBS before 31st July, 2010, apart from intending to
open about 200 new branches during the year. Technological automation will be leveraged fully to provide a
wide range of value-added services to vast cross-section clientele and sustain business growth of your Bank.
 
 AWARDS AND ACCOLADES
 
 In recognition of the varied initiatives, the Bank was conferred with several awards and accolades during
the year. Some prominent awards, which clearly testify to our strengths and capabilities, were:
 
 Best Bank in South Zone Award for the year 2008-09 in respect of lending under KVIC and PMEGP Schemes. The
award was handed over by Dr. Manmohan Singh, Hon'ble Prime Minister of India.
 
 The Bank received the Credit Guarantee Approval Certificate issued by CGTMSE from Shri Pranab Mukherjee,
Hon'ble Finance Minister of India.
 
 ACKNOWLEDGEMENT
 
 I am deeply gratified by the trust our stakeholders place in us. While constantly raising the bar to
effectively manage organisational change, we are fully aware of the ever rising levels of expectations. Let
me assure you that it has always been our endeavour not just to meet stakeholder expectations but also to
constantly surpass all expectations. The Bank's transformational business model is aimed at laying the
foundation for sustained development and consolidating its position in the banking industry.
 
 I am thankful to you, the shareholders, for your constant faith in the Bank. Your Bank's excellence in
several performance parameters stems from the unstinted guidance, support and co- operation of my colleagues
on the Board, the Auditors, the Legal Advisors and the correspondent banks. The Government of India and the
Reserve Bank of India provided valuable guidance, the Media provided constructive coverage and most
importantly, our valued customers provided continued patronage.
 
 I sincerely appreciate the support extended by the Securities & Exchange Board of India (SEBI), Stock
Exchanges and the investor community for reposing full faith in your Bank's professional standards and proven
capabilities.
 
 I am thankful to the members of the Canbank family for their hard work, solidarity, cooperation and support
in constantly moving from strength to strength.
 
 I am confident that with your continued support, 2010-11 will turn out to be yet another year of excellence
for your Bank in its journey towards excellence with a renewed thrust on business growth across verticals and
steadily rising levels of profits and profitability.