CHAIRMAN AND MANAGING DIRECTORS MESSAGE
The Financial Year 2015-16 has been a year of consolidation as well as challenges forthe Bank. Growth has been moderated to align it with the market scenario. The Bankstrategized its focus on business segments like Agriculture SME & Retail Advanceswhich has started yielding results during the year.
Signals from the global economy continued to be muted in the year 2015-16. Thelacklustre of growth of 1% of US economy in the last quarter of 2015 a mere 0.3% growthin Eurozone mainly because of the low growth in Germany and France and shrinking ofJapanese economy are the disappointing signs of the global economic trend.
Notwithstanding such a bleak external scenario and successive poor monsoons Indianeconomy offered reasons to cheer up. Inflation was under control. The CPI-New Seriesinflation has been around 5.50% and WPI has been negative as a result of fall ininternational oil and other commodity prices. The Current Account Deficit has been atcomfortable levels Forex Reserves have risen to such levels which are well above reserveadequacy norms. The economic policy interventions initiated by the Government of Indialike Power Sector reforms through UDAY scheme Make in India Mission Smart Cities Missionetc. would certainly add colour to our economic growth story.
Banks in India especially PSBs continue to face the vagaries of economic downturndespite the signs of hope discussed above. Asset Quality continues to be the major causeof worry.
Our Bank with its pan-India presence accentuated by a huge network of branches andATMs has drawn up realistic business goals and strategies which would certainly enable usto capitalize on the positive economic indicators of the country.
During the Financial Year 2015-16 Business of the Bank increased to Rs. 456337 crorefrom Rs. 450539 crore in Financial Year 2014-15 registering a Y-o-Y growth of 1.29%. TheDeposit of the Bank has grown by 4.15% however Credit has declined by 2.47%. The CASAshare as a percentage of Total Deposits stood at 35.48% as against 34.05% in FinancialYear 2014-15. To ensure profitable growth in Business High Cost Deposits have beenshed considerably. The share of high cost deposits as a proportion of Total deposits hasbeen reduced to 5.56% as on Mar-2016 from as high as 10.73% as on March-2015. This is wellreflected in growth of Aggregate Core Deposits at 10.19 %.
The operating profit of the Bank reduced to Rs. 2643 crore from Rs. 3559 crore inFinancial Year 2014-15. Further Bank posted Net loss of Rs. 1418 crore as against a Netprofit of Rs. 606 crore in previous year.
The Bank's Cost of Deposits reduced to 6.86% from 7.22% in Financial Year 2014-15 theNet Interest Income of the Bank reduced to Rs. 7066 crore from Rs. 7247 crore in FinancialYear 2014-15 registering a decline of 2.50%. The Other Income or Fee - based Income of theBank has increased to Rs. 1939 crore from Rs. 1894 crore in Financial Year 2014-15.
Asset Quality has been the concern of the Bank for last couple of years. Thepercentage of Gross NPA to Gross Advances increased to 11.95% from 6.09% in Financial Year2014-15 and percentage of Net NPA to Net Advances increased to 7.36% from 3.61% inFinancial Year 2014-15. This is on account of stress in some sectors like InfrastructureTextiles Iron & Steel Engineering & Manufacturing Gems & Jwellery etc. YourBank has been proactive in respect of NPA Management and shall continue its effort toreduce the NPA level.
Bank is fully engaged in inclusive growth through various Financial Inclusioninitiatives to reach 'the last mile' of economy. The Direct Benefit Transfer (DBT)programme of the government is being implemented in various districts out of which we arelead bank in 51 districts in 7 states. Further progress in these districts and in newdistricts will be made during the FY-2016-17. This programme paves the way for the Bank tocanvass more CASA Deposits and also for Credit Expansion. Further Bank has successfullyimplemented 'Pradhan Mantri Jan Dhan Yojna' and have opened 74.18 lac accounts as on 31stMarch 2016.
A Bank with 4728 branches as on March 2016 of which 2/3 rd of the Branches are inrural and semi urban areas and 3677 Ultra Small Branches shall continue to position itselfas a Retail Bank. Your Bank shall be ensuring that the retail and priority sectorportfolios grow much faster than they have been so far.
I am happy to present the Annual Report of the Bank for the year ended 31stMarch 2016.
With best wishes
Place : Mumbai
Date : May 27 2016