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Indian Overseas Bank

BSE: 532388 | NSE: IOB | Series: NA | ISIN: INE565A01014 | SECTOR: Banks - Public Sector

BSE Live

May 22, 16:00
7.20 -0.16 (-2.17%)
Volume
AVERAGE VOLUME
5-Day
59,526
10-Day
50,048
30-Day
77,360
39,413
  • Prev. Close

    7.36

  • Open Price

    7.40

  • Bid Price (Qty.)

    7.20 (9)

  • Offer Price (Qty.)

    7.41 (109)

NSE Live

May 22, 15:53
7.25 -0.10 (-1.36%)
Volume
AVERAGE VOLUME
5-Day
676,900
10-Day
668,290
30-Day
999,554
681,215
  • Prev. Close

    7.35

  • Open Price

    7.30

  • Bid Price (Qty.)

    7.25 (25)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

For Year :
2019 2017 2016 2015 2014 2013 2012 2011 2010

Chairman's Speech

Dear Shareholders, It gives me great pleasure to present your Banks Annual Report and financial statements for the year 2008-09. I would like to briefly highlight some key issues and achievements of the Bank during the year. The Indian economy is estimated to have recorded a growth in the range of 6.5%-6.7% during the year 2008-09 as against 8.7% during 2007-08. The slowdown is on account of the global financial and economic crisis. As on April.10, 2009, Foreign Exchange Reserves stood at USD 253 billion showing a decline of USD 56.7 billion from USD 309.71 billion at end March 2008. Merchandise exports recorded a lower growth of 6.4% during 2008-09 (April - February) and imports also recorded a lower growth with the merchandise trade deficit during this period widening to USD 113.8 billion from USD 82.2 billion a year ago. During 2008-09, equity markets showed a declining trend reflecting poor investor sentiment, heavy selling by Foreign Institutional Investors, slowdown in industrial growth etc. The BSE Sensex decreased by 55.68% during the year from 15644 at end March 2008 to 10049 at end March 2009. The BSE Sensex has touched an all time low of 7697 on October 27, 2008. During April 2009, the market has shown a slight recovery. The following are the highlights of the performance of the Bank during the year under review : - Your Banks global business reached Rs. 1,75,926 crore as at 31st March 2009 resulting in an increase of 21.01% over last years figure ie. Rs. 1,45,383 crore - Deposits of the Bank registered an healthy year-on-year (y-o-y) growth of Rs. 15,790 crore (18.72%) during the year 2008-09 and increased from Rs. 84,326 crore for the year 2007-08 to Rs. 1,00,116 crore, thereby crossing the milestone of Rs. 1,00,000 crore. - Gross Advances registered a y-o-y growth of Rs. 14,752 crore (24.16%) and stood at Rs. 75,810 crore for the year 2008-09, as against Rs. 61,058 crore for the year 2007-08. - This is as against the industry-wise growth rates of 19.8% for Deposits and 23.9% for Non-food Credit. - Operating Profit for the Bank was Rs. 2,524 crore as on 31.03.2009 as against Rs. 2,002 crore as on 31.03.2008. The growth in operating profit at 26.07% was appreciably high due to expansion in volume of business and substantial treasury gains. - Net Profit reached a level of Rs 1,326 crore at the end of the year registering an increase of 10.32% y-o-y through improvement in yield on advances and non-interest income. - Net investments of the Bank increased to Rs. 31,215 crore from Rs. 28,475 crore in 2007-08. - The percentage of priority sector advances to Adjusted Net Bank Credit was at 42.62% as against RBI norms of 40%. - The agricultural credit portfolio of the Bank registered a growth of Rs.2,128 crore from Rs. 8,689 crore to Rs. 10,817 crore in the year under review. The Banks ratio of agricultural advances to Adjusted Net Bank Credit at 18.42% exceeded the 18% norm. The Bank took a number of initiatives to increase the flow of credit to this sector. - The total exposure of the Bank as on March 31, 2009 to SME sector stood at Rs. 9,395 crore. The Bank has executed MOUs with Coir Board and Ministry of MSME, Government of India, for implementing special schemes aimed at entrepreneurial development of coir industries and women respectively. - The CD Ratio registered high level of 75.72% as at the end of the reporting period. - The Banks Net Profit as a percentage of Average Networth as of 31.03.2009 stood at 24.80%. - Total Net Interest Income improved to Rs. 2,870 crore when compared to Rs. 2,450 crore last year, registering a growth of 17.13%. - Net Interest Margin stood at 2.84% for the year. - The Banks total income witnessed a growth rate of 28.05% due to higher credit growth at 24.16% and increased yield on advances on the domestic front with substantial recoveries. - While the business per employee has improved from Rs. 5.83 crore to Re. 6.89 crore, an increase of 18.18%, the profit per employee has also risen from Rs 4.82 lacs to Rs 5.20 lacs, an increase of 7.88%. - Gross WPA stood at Rs. 1,923.41 crore in March 2009. In percentage terms, the Gross NPA ratio was 2.54% as against 1.63% as at 31.03.2008. Net NPA ratio stood at 1.33% during the year due to global phenomena and slowdown of economic growth. - A dividend of 45% has been recommended by the Board of Directors for the year 2008-09. During the year under review, the Banks Prime Landing Rate (BPLR) is as under : 01.04.2008 to 15.08.2008 - 13.50% 16.08.2008 to 05.11.2008 - 14.00% 06.11.2008 to 16.01.2009 - 13.25% 17.01.2009 onwards - 12.50% However, the total interest earnings of the Bank increased to Rs.9,641 crore in 2008-09 compared to Rs.7,739 crore in 2007-08. As a Bank with international presence, we have already moved to the revised New Capital Adequacy Framework (BASEL II) from 31st March 2008 in line with RBI guidelines. CRAR as per BASEL-II framework as on 31.3.2009 works out to 13.20% which is above the requirement of 9% prescribed by RBI. In the area of Retail Banking, your Bank has launched new products during the year 2008-09 viz. SB - Silver and SB - Gold, Current Account Classic and Current Account Super, Gold Recurring Deposit Scheme and Commercial Cash Credit against Jewellery. The Bank has entered into a Corporate Agency arrangement with effect from 20.12.2008 with Universal Sompo General Insurance Company Limited (the Non- Life Insurance Joint Venture Company of your Bank with Allahabad Bank, Karnataka Bank, Dabur Investment Corporation and Sompo Japan Insurance Inc.) for distribution of non-life insurance products. The new initiatives taken by the Bank during the year under review include :- a) The Bank has obtained the approval of RBI for the takeover of the Assets and Liabilities only of M/s. Shree Suvarna Sahakari Bank Ltd., Pune (under moratorium). b) In its drive to achieve 100% networking of its branches and office, the Bank has notched up a total of 1993 branches, Regional Offices and Inspectorates which have been brought under Core Banking System (CBS) as on 09.05.2009. As regards our overseas operations, we have six full- fledged overseas branches - two in Hong Kong and one each in Singapore, South Korea, Sri Lanka and Thailand. The Banks Representative Offices are located in Guangzhou, China and Kuala Lumpur, Malaysia and Ho Chi Minh City, Vietnam. Remittance Centres function in Boon Lay and Serangoon, Singapore while an Extension Counter is located in Sri Lanka. The Bank has deputed three officers at the UAE Exchange Centres who liaise between branches in India and the NRI clientele of the Bank. During the year under review, the Bank has obtained approval from RBI and Central Bank of the UAE to open a representative office at Dubai. The Bank has also commenced the process of upgrading the Representative Office in Guangzhou, China into a full- fledged branch. There are two other indicators of the overall business growth of the bank - the business per employee and profit per employee levels, both of which have shown considerable improvement. Promotion of good industrial relations continues to be an objective of our Bank. During the year under review, the global financial crisis has thrown up many challenges. The forces of globalisation have ensured that emerging economies like India have also been affected by the global crisis. It is the well-regulated banking industry in India that has enabled the countrys economy to insulate itself from the present global financial crisis. Your Bank continues to work in todays challenging environment towards our goals of providing safe and ethical banking while being true to our motto Good People to Grow With in our bid to be a market leader - an icon for customer service and product initiatives. We shall continue to rely on your support and encouragement in all our endeavours to make your Bank excel in performance. Yours sincerely, S A BHAT Chairman and Managing Director