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MESSAGE FROM THE CHAIRMAN
''Our greatest transformation happens through our toughest times. It''s a thought provoking axiom that neatly sums up the times we live in. Probably, no other period in human history witnessed such a rapid surge of transformational ideas. One after the other, these new ideas are affecting and altering the destiny of humanity in unprecedented ways. Banking and finance too were and are being buffeted by wave after wave of game changing developments. With commendable foresight and nimbleness, your bank navigated through this disruptive whirlwind of currents and undercurrents, triumphantly emerging to share with you some impressive results. So, it''s with considerable pride and delight that I am addressing you all.
By and large, the passing year was a year of tumult and turmoil for the Indian economy, with many bright spots of growth and glory. Sector after sector, from telecom to aviation, came under great stress and the cascading effect was felt by others too.The country was confronted with the cumulative impact of a strengthening US Dollar and rising crude oil prices until early October 2018.
On the positive side, the microstructure of the Indian economy continued to flourish with noticeable and transformational changes. It is heartening to note that India has leapfrogged to secure a rank of 77 in World Bank''s Doing Business Assessment Report, from 100 earlier, thereby making it one of the fastest improvers globally on the metric of ''ease of doing business''. Further, the IBC (Insolvency and Bankruptcy Code) and the GST (Goods and Services tax) have started to transform the structural ''way of doing business'' in India by altering the incentive structures and bringing about a paradigm shift in commercial and economic behaviour of all key stakeholders. The country saw unprecedented social and behavioural changes through massive programs for improving the basic needs of people''s needs in areas of sanitation, cleanliness, medical assurance etc.
So, in this fluid scenario, it''s gratifying to note that your bank has come out with impressive results.On many key parameters such
as EPS, Profitability and a few key qualitative metrices, your bank could register impressive results.Total income grew by 17.03% from Rs 10911.98 Cr to Rs 12770.05 Cr, while Operating Profit grew from Rs 2291.03 Cr to Rs 2763.10 Cr. The Capital Adequacy Ratio (CRAR) of the Bank stands at a comfortable level of 14.14% as on 31st March, 2019.
During the unprecedented Kerala floods, your bank exhibited tell-tale signs of resilience with the support of a well laid down Business Continuity Plan, which enabled the bank to come through this terrible trial with flying colours. The continued goodwill and patronage of stakeholders enabled your bank to come out with historic performance during the year.
To be able to compete and grow where margins are thin, competition is fierce, regulations are changing and technology has an increasing impact, financial institutions must place innovation as a top priority. Banks must anticipate consumer needs and innovate in ways that will prioritize the most effective mix of capabilities, processes and people. At Federal Bank, we are actively encouraging a culture of Nayi Soch''. This passion for New Thinking is manifest in everything we do now. Whether it is our forays into Blockchain Technology through a tie up, or the introduction of a slew of pioneering digital products such as Fed E Biz, we are consistently pushing the envelope and is redefining the customer experience in myriad ways.
As the cover of this year''s annual report suggests, your bank is now on the threshold of a more ambitious leap. Having secured leadership position in the Kerala market, the bank is now poised to fly higher and capture more mindshare and market share across India. With a missionary zeal, your bank is determined to make this vision a reality and has christened this pan India thrust as from Presence to Prominence. This resetting of targets will naturally open up new vistas of growth and opportunities for the bank.
Increased commitment to innovation in response to consumer expectations and increased fear of non-traditional players are two of the primary impulses seen across the banking spectrum. The
last few years have seen several non-banking companies such as technology majors, digital upstarts and Fin Techs steadily expand their foothold in the financial services space. A recent study revealed that FinTechs now constitute about 33% of the financial services revenue globally. The recent Infosys Efma study found that non-banking players are perceived as drivers of innovation in the industry. The bank has taken cognizance of this emerging new competitive framework and is busy devising strategies to address it.
At Federal Bank, we aspire to mould a well-rounded workforce that combines knowledge of business, industry, customer and organizational issues. We realise that we will have to accommodate a multigenerational workforce of GenZ, millennials, and older representatives. We will have to embrace diversity, and we will hire talent from different industries and disciplines. The new culture will value continuous learning and customer-centricity more than ever. Training programs will become more accessible on mobile devices. The trend will be to use real-time feedback to align banking practices with organizational objectives and increase customer-centricity.
While concluding, I wish to quote Alexander Graham Bell who famously said the achievement of one goal should be the starting point of another. Your bank has crossed many significant milestones in the recent past. But, we can''t rest on our laurels. We need to soldier on to conquer new horizons. As I mentioned earlier, our new goal is to spread our wings and to put our stamp of excellence in more villages and towns across India. And I am sure that with surefooted confidence your bank will move from Presence to Prominence to Dominance.
On behalf of the board of directors, I wish to express my sincere gratitude to all the shareholders, customers, employees and all stakeholders. Your unstinted support has made our journey a lot more fulfilling and delightful.We look forward to your continued co-operation as we enter even more exciting times.