I am presenting the Annual Report and financial statements of your Bank for the financial year 2017-18. I would like to share with you the performance highlights and financial indicators of your Bank along with the business environment within which your Bank operated during the year.
As per the provisional estimate of Central Statistics Office (CSO), the Indian Economy is expected to register a growth of 6.7% in the financial year 2017-18. The GDP growth has come down to a three-year low of 5.6% in the first quarter of 2017-18. The economy did recover thereafter to 6.3% in the second quarter, 7.0% in the third quarter and 7.7% in the fourth quarter of 2017-18.
Going forward, the economic activity in the financial year 2018-19 is expected to gather pace benefiting from a conducive domestic and global environment. Accordingly, the Reserve Bank of India (RBI) has projected the growth to strengthen to 7.4% and the Economic Survey has projected the economy to expand between 7.0% to 7.5%.
Factors including stabilisation of Goods and Services Tax, improved credit off take, strengthening investment activity, recapitalisation of Public Sector Banks and resolution of distressed assets under the Insolvency and Bankruptcy Code, 2016 (IBC), improved global trade as well as focus on rural and infrastructure sectors in the Union Budget, are expected to support the growth prospects of the country. However, there are concerns to growth due the geo political events impacting the global crude oil prices and its impact India’s fiscal, current account and inflationary scenario.
The Non-Performing Assets (NPAs) have become a major challenge for the banking system. The overall level of gross non-performing assets in the system has continued to rise, due to the increased recognition by the banking system. The RBI’s revised framework on resolution of stressed assets also requires banks to identify signs of incipient stress in loan accounts and classify stressed assets, immediately on default. The RBI and the government are proactively taking steps to resolve NPA challenges in the banking sector. The transparent and time bound resolution of stressed assets under IBC offers a ray of hope. In the long run, the new reforms will bring a good structural change that can strengthen the banking system in future.
The major highlights of your Bank’s performance during 2017-18 are;
Total Business of your Bank has reached Rs.3,03,184.79 crore as on 31st March 2018 as against Rs.3,60,916.41 crore as on 31st March 2017, Which consists of Deposits Rs.1,83,315.95 crore and total Advances Rs.1,19,868.84 crore as on 31st March 2018.
During the year, the Bank concentrated on Recovery, CASA and reduction in the Bulk deposits by replacing it with retail deposits. The level of Bulk deposit has come down from 38.44% as at 31.03.2017 to 28.75% as on 31.03.2018.
During the financial year, the saving deposits of the Bank stood at Rs.39,424.41 crore and Current Accounts stood at Rs.14,698.71 crore as on 31st March 2018.
Share of CASA in total deposit improved to 29.52% as on 31.03.2018 as compared to 26.47% as on 31.03.2017.
Asset Quality and Provisioning:
During the year there was severe pressure on quality of assets and the rise of NPA in your Bank was not an isolated case but part of overall Industry phenomenon. The Gross NPA of your Bank increased from Rs.17,045.22 crore (11.70%) as at 31.03.2017 to Rs.22,213.44 crore (17.35%) as at 31.03.2018 and Net NPAs increased from Rs.11,692.18 crore (8.33%) to Rs.14,077.02 crore (11.74 %) during this period.
The provision coverage ratio as on 31.03.2018 is 63.65% with respect to Gross NPA as against 55.17% as at 31.03.2017.
The focus during the year was on recovery of NPAs. The employees rose to the challenge and your Bank could effect a recovery in PWO Accounts to the tune of Rs.318.06 crore as compared to Rs.135.72 crore in the previous financial year.
The Reserve Bank of India has placed your Bank in December 2017, under Prompt Corrective Action (PCA) Framework in view of NPA and requirement to raise capital of the Bank, in this direction the bank has taken all efforts to come out of the PCA at the earliest.
Your Bank will continue its focus and rigorous efforts through vibrant credit monitoring and NPA recovery system to arrest effectively the rising trend in slippages during the coming years.
Other key performance indicators:
Total Income of the Bank decreased by Rs.2620.37 crore during the financial year to reach Rs.19,941.41 crore.
Interest Spread increased by Rs.387.21 crore (8.70%) during the year. Non-Interest income decreased by Rs. 777.23 crore due to reduction in trading income from treasury because of pressure in bond yield whereas non-interest expenditure increased by 3.19%. The increase in Interest Spread is on account of reduction in Cost of Deposits by 100 basis points.
Cost of deposits of the Bank has come down from 6.74% for the year 2016-17 to 5.74% for the year 2017-18.
Operating Profit of the Bank stood at Rs.3,950.42 crore during the year 2017-18. However, with increased provisioning on NPAs, the Bank posted net loss of Rs.4,053.94 crore for the year 2017-18.
The Bank’s consolidated Net worth stood at Rs.10,887.82 crore as at 31.03.2018.
Priority Sector Lending:
Your Bank has achieved regulatory target under priority sector advances. Total Priority Sector advances including RIDF stood at Rs.68,052 crore as on 31.03.2018 which works out to 42.44% of Adjusted Net Bank Credit (ANBC) as against the regulatory target of 40%. As in the past years, your Bank conducted special campaigns during Financial Year 2017-18 to augment agriculture advances in both Rabi and Kharif seasons. Furthermore, your Bank introduced tailor-made area specific schemes to cater to the specific needs of the farming community.
A number of initiatives were taken by your Bank to support MSME sector, given its potential to generate employment and growth. Under Pradhan Mantri MUDRA Yojana (PMMY), Bank has achieved 82.36% of annual disbursement target.
Pradhan Mantri Jan Dhan Yojana /Financial Inclusion:
Your Bank has been a frontrunner in the Financial Inclusion efforts. The Bank looks at it not just as a social commitment but also as an effective and profitable business proposition. The Bank has implemented Financial Inclusion through Branchless Banking in 4,393 locations as on 31.03.2018. Number of accounts under Financial inclusion is 40.75 lakhs as on 31.03.2018. The Bank has actively participated in implementation of PMJDY. As on 31.03.2018, 27.14 lakhs accounts are opened under PMJDY and Balance outstanding in these accounts is Rs.1059 Crore. The average balance in non-zero balance PMJDY accounts as on 31.03.2018 is Rs.4543. The percentage of zero balance accounts in PMJDY has been brought down to 14.02% (3.83 lakh A/cs) as on 31.03.2018 from 17.59% (4.80 lakh A/cs) as on 31.03.2017. Incentive Scheme has been formulated for Bank Mitras for getting funds in the Zero balance accounts. Issued RuPay debit cards to 95% of the account holders. Aadhaar number has been seeded in 76.16 % of the operative PMJDY accounts. Fixed point Bank Mitras have been engaged at all the 625 SSAs (covering 2,291 villages) where bank branches are not opened. 93% of the Bank Mitras are active and carry out daily transactions. Bank Mitras get fixed minimum remuneration of Rs.5,000/- p.m. in addition to variable incentives and hence the attrition of Bank Mitras is one of the lowest. Our Bank has provided robust, STQC certified, 1.5.1 version compliant Micro ATMs to all the Bank Mitras and all are functioning well. The Micro ATM along with pin pad has enabled all Bank Mitras to perform online, interoperable, Aadhaar & pin based transactions. Zonal Offices have been empowered to engage Bank Mitras, wherever the unbanked areas exist in the allotted villages in order to include them under Financial Inclusion.
New Products launched:
- Bank has launched New Corp e-Passbook officially on the Founder’s day i.e. 12.03.2018. Customers can download their account statement upto last 3 months through mail either in excel or PDF format, besides viewing their account details, balances, Bank holidays and maintaining personal account ledger using the App.
- The coveted technology upgradation project of the Bank - migration from the COBOL-based legacy CBS to contemporary FINACLE-based New CBS was sucessfully completed on 31.10.2017.
- As a part of technology transformation, Bank has revamped the existing Mobile Banking application with a New Mobile Banking Application, viz., “Corp EASE”. The facility is available for Android as well as iOS platforms. In addition to the normal features of mobile bank, Corp EASE provides the feature of blocking/unblocking of debit card to the customers through the App.
- The Bank went live on “Corp m-Token” mobile app, an alternate facility for second factor authentication in lieu of OTP. This is specifically targeted for NRI customers where delivery of OTP on international numbers was a challenge. The facility is available for Android as well as iOS platforms.
- The Bank went live on “OAOS — Online Account Opening Solution”, which enables customers to submit their request to open Savings Bank Account online, by visiting the Bank’s web portal www.coprbank.com. Customer can subsequently visit the branch of his choice within 30 days along with the mandatory KYC documents to complete the account opening process.
CSR and Empowerment Initiatives:
1. The Corporation Bank Economic Development Foundation® a non-profit economic outfit Trust has been pursuing its objectives of fulfilling social obligation in tune with corporate mission. All CSR activities of the Bank are conducted under the aegis of CBEDF. Financial grants to the extent of Rs.324.34 lakh were disbursed for execution of various projects of social concerns during the year 2017-18 through CBEDF.
2. For the welfare of underprivileged, through “CorpKiran”, Bank granted Rs.17.09 lakh to various Institutions during 2017-18. The major activities included providing Bench, Desk, Cupboards, computers, water purifier etc., to poor school children and inmates of orphanages, old age homes, destitute homes, helping physically and mentally challenged people, Hopper Tipper for Swachh Bharat Abhiyan.
- The Bank has operationalized 7 new branches during the financial year 2017-18 and the number of branches stood at 2,440 as on 31.03.2018. The Bank has pan India presence covering 26 states and 5 union territories out of 29 states and 7 union territories respectively.
- Number of ATMs stood 3,122, out of which 690 are in Metro, 768 are in Urban, 977 are in Semi urban and 687 are in Rural. E-Lobbies increased to 345 as on 31st March, 2018.
Awards and Accolades:
The Bank has taken various encouraging steps towards value addition, expansion and inclusive banking as a result of which, your Bank was conferred with the following prestigious awards during 2017-18:
1. Bank has won “Social Banking Excellence Awards-2017’’ award under Best Social Bank and Joint runner-up award under Priority Sector Lending for Large Bank class category for 2017 instituted by The Associated Chambers of Commerce & Industry of India (ASSOCHAM).
2. Bank has bagged “Best SME Lending -2017” award during Fifth ASSOCHAM SMEs Excellence Award 2017 instituted by The Associated Chambers of Commerce & Industry of India (ASSOCHAM).
3. Bank has bagged “National MSME Excellence Award 2017” organized by the Federation of Industry, Trade & Services [FITS].
4. Bank has bagged 2 awards instituted by Chamber of Indian Micro Small & Medium Enterprises [CIMSME] under the following categories:
a. Eco-Technology Savvy Bank Award — Winner [MidSized Category]
b. Best MSME Bank Award — Runner-up (Mid-Sized Category)
5. Bank has bagged “SKOCH Award for MUDRA - 2017” instituted by SKOCH Group for Financial year 2017-18.
6. The Bank bagged the Rajbhasha Kirti Puraskar instituted by Department of Official Language, Ministry of Home Affairs, Government of India. The Bank was awarded Second prize under Nationalised Banks category in ‘C’ region for excellent implementation of Official Language policy of the Govt. of India in its offices and branches spread across the country.
7. The Bank was awarded the SKOCH Financial Inclusion Award 2017, and SKOCH Order-Of-Merit Award, 2017 for Financial Inclusion, instituted by SKOCH Group at the 48th SKOCH Summit held in Mumbai on 20th June, 2017.
8. The Bank has bagged “SKOCH Award for MUDRA Performance - 2017” and “SKOCH Order-of-Merit Award for A Road Map to be Best in Insurance Penetration” instituted by SKOCH Group for Financial year 2017-18.
9. Bank has bagged “National Payments Excellence Awards 2017” winner in Commercial Banks Category B for excellent performance in RuPay Cards for Financial year 2017-18.
10. Bank has also bagged Investor Relations Society’s IR Awards 2018 under “Best Expectation Management category.
Before I conclude, I take this opportunity to extend my sincere gratitude to all the shareholders for their persistent support for overall development of the Bank. I sincerely thank the members of the Board, Govt. of India, Reserve Bank of India, all the regulatory authorities and organisations and Insurance Companies for their valuable support and guidance. I thank all our customers for their continued support & patronage and the opportunity given to us to serve them and develop business relationship. I also place on record my appreciation for the employees for their dedication, commitment and contribution towards the growth of the Bank.
The valuable support of all the stakeholders and the confidence they repose in the Bank will motivate us to work with renewed vigour to improve the business performance.
With best wishes,
Place : Mangaluru Jai Kumar Garg
Date : 02.06.2018 Managing Director & CEO