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
- The CD Ratio registered high level of 75.72% as at the end of the
- 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
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
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.
S A BHAT
Chairman and Managing Director