I am presenting the Annual Report and financial statements of your Bank for thefinancial year 2016-17. I would like to share with you the performance highlights andfinancial indicators of the Bank along with the business environment within which yourBank operated during the year.
The Indian economy has witnessed several path breaking developments in the year2016-17. From Demonetization to the landmark GST Bill passage the year has seen severalinitiatives & policy reform measures. These changes are taking place in the country ata time when inflation is benign amidst a modest current account deficit credible fiscalconsolidation efforts rising foreign exchange reserves increase in foreign inflows andgrowth supportive policy measures and reform initiatives.
On the economic growth front as per the second advance estimate the CentralStatistical Organisation (CSO) estimated India's real GDP growth at 7.1% in the financialyear 2016-17 compared to 7.9% in the financial year 2015-16. Despite the transient impactof demonetization on the growth front India continues to be the fastest growing emergingmarket economies in the world. The growth prospects are expected to strengthen in the daysahead on account of several factors including pickup in discretionary consumer spendingafter remonetisation the emphasis in the Union Budget on the rural economy and affordablehousing higher govt. capital spending & pick-up in export growth improved investorconfidence after passage of bills such as GST Insolvency & Bankruptcy Code etc.
As far as the banking sector is concerned the performance remained subdued amidstrising delinquent loans consequent increase in provisioning persisting corporate sectorstress and continued slowdown in credit growth. However the banking system has witnesseda steady rise in deposits ever since the government announced demonetisation. Thesubstantial inflow of deposits in the form of demonetized currency in the banking systemhas prompted the banking sector to cut their lending rates so as to revive the demand inthe economy. Demonetization has also brought the digitalisation of banking services to theforefront. The banking sector is laying greater emphasis on providing improved services toits clients and also upgrading its technology infrastructure in order to enhance thecustomer experience as well as to give banks a competitive edge.
The major highlights of your Bank's performance during 2016-17 are:
Total Business of the Bank has reached Rs.360916.41 crore as on 31stMarch 2017 as against Rs. 345493.08 crore as on 31st March 2016registering an absolute growth of Rs.15423.33 crore.
While TOTAL Deposits grew by 7.50% to reach Rs.220559.62 crore TOTAL Advancesincreased by 0.02% to reach Rs.140356.79 crore as on 31st March 2017.
During the year the Bank concentrated on reducing the Bulk deposits and replacing itwith retail deposits. The level of Bulk deposit has come down from 45.53% as at 31.03.2016to 38.34% as on 31.03.2017.
During the financial year Bank has achieved CA SB and CASA targets. The Bank hasmobilized Rs.3719 Crore from 3113343 new SB accounts and Rs.1545 Crore from 90287 newCurrent accounts during the financial year. Share of CASA in TOTAL deposit improved to26.47% as on 31.03.2017 as compared to 22.14% as on 31.03.2016.
Asset Quality and Provisioning:
During the year there was severe pressure on quality of assets and the rise of NPA inyour Bank was not an isolated case but part of overall Industry phenomenon. The Gross NPAof your Bank increased from Rs.14544.25 crore (9.98%) as at 31.03.2016 to Rs.17045.22crore (11.70%) as at 31.03.2017and Net NPAs increased from Rs.9160.14 crore (6.53%) toRs.11692.18 crore (8.33%) during this period.
The provision coverage ratio as on 31.03.2017 is 55.17% with respect to Gross NPA asagainst 55.05% as at 31.03.2016.
The focus during the year was on recovery of NPAs. The employees rose to the challengeand your Bank could effect a cash recovery and upgradation of NPAs to the tune ofRs.3350.87 crore as compared to Rs.1596.04 crore in the previous financial year.
Your Bank will continue its focus and rigorous efforts through vibrant creditmonitoring and NPA recovery system to arrest effectively the rising trend in slippagesduring the coming years.
Other key performance indicators:
Total Income of the Bank increased by Rs.1415.38 crore during the financial year toreach Rs.22561.78 crore.
Interest Spread increased by Rs.211.55 crore (4.99%) during the year. Non-interestincome increased by Rs.1355.09 crore with a growth rate of 78.10% whereas non-interestexpenditure increased by 7.72%.
Cost of deposits of the Bank has come down from 7.51% for the year 2015-16 to 6.74% forthe year 2016-17.
Operating Profit of the Bank increased by Rs.1344.51 crore during the year to reachRs.4439.53 crore. However with increased provisioning on NPAs the Bank posted net profitof Rs.561.21 crore for the year 2016-17.
The Bank's consolidated Net worth improved from Rs.11399.59 crore as at 31.03.2016 toRs.12749.90 crore as at 31.03.2017.
Priority Sector Lending:
The Bank has achieved regulatory target under priority sector advances and itssub-sectors. TOTAL Priority Sector advances stood at Rs.60604 crore as on 31.03.2017 whichworks out to 42.75% of Adjusted Net Bank Credit (ANBC) as against the regulatory target of40%. As in the past years your Bank conducted special campaigns during FY 17 to augmentagriculture advances in both Rabi and Kharif seasons. Furthermore your Bank introducedtailor-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 itspotential to generate employment and growth. Under Pradhan Mantri MUDRA Yojana (PMMY)Bank has achieved 103.86% of annual disbursement target.
Pradhan Mantri Jan Dhan Yojana/Financial Inclusion :
Your Bank has been a front runner in the Financial Inclusion efforts. The Bank looks atit not just as a social commitment but also as an effective and profitable businessproposition. The Bank has implemented Financial Inclusion through Branchless Banking in4727 locations as on 31.03.2017. Number of accounts under financial inclusion increased to40.86 lakhs (31.03.2017) from 39.71 lakhs as on 31.03.2016. The Bank has activelyparticipated in implementation of PMJDY. During FY 2016-17 Bank has opened 1.40 lakhaccounts under PMJDY and reached a level of 27.33 lakhs accounts. The balance in the PMJDYaccounts has increased to Rs.1051.74 crore (31.03.2017) from Rs.749.63 crore as on31.03.2016. The average balance in nonzero balance accounts as on 31.03.2017 has beenincreased to Rs.4668/- from Rs.3663/- as on 31.03.2016. The percentage of zero balanceaccounts has been brought down to 17.59 % (4.80 lakh A/cs) as on 31.03.2017 from 21.07%(5.46 lakh A/cs) as on 31.03.2016. Incentive Scheme has been formulated for Bank Mitrasfor getting funds in the Zero balance accounts. Issued RuPay debit cards to 95% of theaccount holders and passbook to 90% of the account holders. Aadhaar number has been seededin 73.90% of the operative PMJDY accounts which is one of the best in the Industry. CorpBank is one of the leading Banks in carrying out Aadhaar based (AEPS) transactions inMicro ATMs. A few Bank Mitras have done more than 2000 AEPS transactions and UIDAI hasawarded the Bank with an incentive of Rs.9.60 lakhs during FY 2016-17 for achieving morethan 2000 AEPS transactions in 64 Micro ATMs.
New Products Launched:
? Bank launched Co-branded CORP-MHE RuPay Debit card in collaboration with ManipalHealth Enterprise which offers a special 5-20% discount at Manipal Group Hospitals.
? Bank launched Platinum RuPay Debit card which offers exclusive previleges such asAirport lounge facility and insurance cover.
? Bank has launched BHIM-UPI which facilitates and makes fund transfer easy quick andhassle free. It is a step towards achieving the goal of universal electronic payments aless cash society and financial inclusion using the latest technology. UPI providesimmediate money transfer through mobile device round the clock 24x7 and 365 days. Themoney is transferred in a secured environment with immediate confirmation feature.
? Bank has launched Corp ApnaApp in seven languages which simplifies the usage of SMSBanking and eliminates the need for remembering many SMS syntaxes.
? Bank has enabled Corp Rewardz App on iOS platform also.
CSR and Empowerment Initiatives:
1. The Corporation Bank Economic Development Foundation a Non-Profit Economic OutfitTrust has been pursuing its objective of fulfilling social obligation in tune withcorporate mission. All CSR activities of the Bank are conducted under the aegis of CBEDF.Financial grants to the extent of Rs. 205.53 lakhs were disbursed for execution of variousprojects of social concern during the year 2016-17 through CBEDF. Amongst others CBEDFimplemented the following major CSR projects during FY 2016-17.
2. For the welfare of the underprivileged Bank granted Rs.19.71 lakhs to variousInstitutions during 2016-17 through "CorpKiran". The major activities includedproviding food books computers water purifier etc. to poor school children andinmates of orphanages old age homes destitute homes helping physically and mentallychallenged people. The major activities carried out during the year under CorpKiranincludes installation of projector and computers to Govt./aided schools. Orphanages wereprovided with furniture and water purifiers.
? No. of branches increased from 2440 to 2517 and Branchless Banking units increasedfrom 4724 to 4727 during the year.
? No. of ATMs increased to 3169 and E-Lobbies increased to 335 as at 31stMarch 2017.
Awards and Accolades:
The Bank has taken various encouraging steps towards value addition expansion andinclusive banking as a result of which your Bank was conferred with the followingprestigious awards during 2016-17:
1. Bagged the SKOCH Silver Award for attaining the No.: 1 position as channel partnerof LIC of India for the past three financial years. The Bank was also awarded Order ofMerit under the following three categories:
CAPS-Virtual Account based Collection of Corporates
Aadhaar Enabled payment System
Point of Sale
2. Won the following two MSME Banking Excellence Awards- 2016 conferred by Chamber ofIndian Micro Small & Medium Enterprises (CIMSME) under the following categories:
Eco-Technology Savvy Bank Award for Mid-Sized Bank Winner.
Best MSME Bank Award for Mid-Sized Bank Runner-Up.
3. Awarded once again with the "National MSME Excellence Award 2017" by theFederation of Industry Trade & Services [FITS].
4. Bagged three Runner up awards under Social Banking Excellence Awards instituted byThe Associated Chambers of Commerce & Industry of India (ASSOCHAM). The Bank baggedthe awards for Agriculture Banking Priority Sector Lending and Best Social Bank underLarge Bank category for 2016.
5. Received ten awards from NABARD at the State Level Awards Programme held atBengaluru for best performance under SHG/JLG Bank Linkage Programme in Karnataka
The Bank has been adjudged first for 2013-14 in following categories: overallperformance under SHG
Bank Linkage programme; highest share of SHG lending to priority sector lending;highest number of SHG's credit linked; highest number of JLG's credit linked; highestnumber of SHG's credit linked by a branch Pandavapura branch in Mysuru zone; andhighest average JLG loan size. The bank has also been ranked first for 2014-15 underhighest number of SHG's credit linked; and highest quantum of loan disbursed. The Bankstood second under highest quantum of loan outstanding and third under highest number ofJLG's credit linked.
6. Received "SKOCH Achiever Award 2016" for National SME enablementfrom Shri M. Venkaiah Naidu Hon'ble Minister of Urban Development Housing and UrbanPoverty Alleviation and Parliamentary Affairs Govt. of India.
7. Received "Best MSME Bank Award 2016" from Shri Haribhai ParthibhaiChaudhary Hon'ble Minister of State for MSME Government of India at the 4thSMEs Excellence Award 2016 held at New Delhi on 6th December 2016.
Before I conclude I take this opportunity to extend my sincere gratitude to all theshareholders for their persistent support for overall development of the Bank. I sincerelythank the members of the Board Govt. of India Reserve Bank of India all the regulatoryauthorities and organisations and Insurance Companies for their valuable support andguidance. I thank all our customers for their continued support & patronage and theopportunity given to us to serve them and develop business relationship. I also place onrecord my appreciation for the employees for their dedication commitment and contributiontowards the growth of the Bank.
The valuable support of all the stakeholders and the confidence they repose in the Bankwill motivate us to work with renewed vigour to improve the business performance yearafter year.
| ||With best wishes |
| ||Yours Sincerely |
|Place : Mangaluru ||Jai Kumar Garg |
|Date : 01.06.2017 ||Managing Director & CEO |