1. The Board of Directors have pleasure in presenting the Annual Report together withAudited Balance Sheet and Profit and Loss Account of the Bank for the year ended 31stMarch 2017.
2. Performance at a Glance:
2.1 The total business reached a level of Rs.360916.41 crore as on 31stMarch 2017 recording an absolute growth of Rs.15423.33 crore over the business figureof Rs.345493.08 crore as on 31.03.2016 at a growth rate of 4.46%.
2.2 The total deposits of the Bank increased to Rs.220559.62 crore as on 31.03.2017from Rs.205170.84 crore as on 31st March 2016 registering a growth of 7.50%y-o-y.
2.3 CASA registered a healthy growth of 28.52% over March 2016 from Rs.45419.71 croreto Rs.58374.36 crore. CASA share to total deposits has grown from 22.14% to 26.47%.Current and SB portfolios have grown by 27.99% and 28.77% respectively.
2.4 The Bank continued its prudent approach in expanding quality credit assets in linewith its policy on Credit Risk Management. The Bank's credit figure stood atRs.140356.79 crore as on 31.03.2017 as against Rs.140322.24 crore as on 31stMarch 2016 increased by Rs.34.55 crore (0.02%). During the financial year focusedattention was given for accelerated lending under Priority Sector Midsize Corporate andMSME for expansion of credit.
2.5 Credit-Deposit Ratio stood at 63.64% as on 31.03.2017 as compared to 68.39% as on31.03.2016.
2.6 The Bank continued its focus on recovery of NPAs. During the financial year theBank effected a cash recovery and upgradation of NPAs of Rs.3350.87 crore as compared toRs.1596.04 crore in the previous financial year.
2.7 The Bank posted a Net Profit of Rs.561.21 crore as against a Net Loss of Rs.-506.48crore in the previous year.
2.8 As on 31.03.2017 the Bank had 10413 functional units spread across Indiacomprising of 2517 Branches 3169 ATMs and 4727 Branchless banking units.
3. Income Analysis:
3.1 Interest Income of the Bank increased by Rs.60.23 crore (0.31%) from Rs.19411.24crore in the year 2015-16 to Rs.19471.47 crore during the year 2016-17 and Interestexpenses decreased by Rs.151.32 crore from Rs. 15171.78 crore during the financial year2015-16 to Rs.15020.46 crore during the year 2016-17. The Net Interest Income recorded agrowth of Rs.211.55 crore [4.99%] during the same period.
| || || ||(Rs. in crore) |
|Particulars ||2015-16 ||2016-17 ||Change in % |
|AT INCOME || || || |
|AT Interest Income ||19411.24 ||19471.47 ||0.31% |
|AT Non-Interest Income ||1735.16 ||3090.31 ||78.10% |
|AT Total Income ||21146.40 ||22561.78 ||6.69% |
|EXPENDITURE || || || |
|Interest Expenditure ||15171.78 ||15020.46 ||-1.00% |
|Operating Expenses ||2879.60 ||3101.79 ||7.72% |
|Total Expenditure ||18051.38 ||18122.25 ||0.39% |
|Operating Profit ||3095.02 ||4439.53 ||43.44% |
|Provisions & Contingencies (Excl. Tax) ||5026.33 ||3603.16 ||-28.31% |
|Profit before Tax ||-1931.31 ||836.37 ||143.30% |
|Provision for Tax ||-1424.83 ||275.16 ||-80.69% |
|Net Profit ||-506.48 ||561.21 ||210.81% |
3.2 The total Income of the Bank [total of Interest Income and Non-Interest Income]improved to Rs.22561.78 crore during the financial year 2016-17 from Rs.21146.40 crorein the previous financial year recording a rise of Rs.1415.38 crore [6.69%].
3.3 Non-Interest Income from Core Areas increased by Rs.89.28 crore [7.11%] fromRs.1255.70 crore in the financial year 2015-16 to Rs.1344.98 crore in the financial year2016-17. The Total Non-Interest Income has increased to Rs.3090.25 as on 31.03.2017 fromRs.1735.16 crore as on
31.03.2016 thereby registered growth rate of 78.10%.
3.4 The Operating Expenses has shown an increase of 7.72% during the financial year2016-17 and stood at Rs. 3101.79 crore as compared to Rs.2879.60 crore in 2015-16.
3.5 Staff expenses increased from Rs.1373.18 crore during FY 2015-16 to Rs.1444.37crore during FY 2016-17.
| || || || ||(Rs. in crore) |
|4. Spread Analysis: || || || ||Growth |
|Particulars ||2015-16 ||2016-17 ||Absolute ||% |
|Average Working Funds ||220056.00 ||240227.00 ||20171 ||9.17 % |
|Total Interest Income ||19411.24 ||19471.47 ||60.23 ||0.31 % |
|Total Interest Expended ||15171.78 ||15020.46 ||-151.32 ||-1.00 % |
|Interest Spread ||4239.46 ||4451.01 ||211.55 ||4.99 % |
|Particulars ||2015-16 ||2016-17 |
|Yield on Funds ||8.82% ||8.11% |
|Cost of Funds ||6.89% ||6.25% |
|Yield on Advances ||10.23% ||9.85% |
|Cost of Deposits ||7.51% ||6.74% |
|Net Interest Margin ||2.06% ||2.12% |
5. Operating Profit:
5.1 The Operating Profit stood at Rs.4439.53 crore as at the end of March 2017 ascompared to Rs.3095.02 crore as on 31.03.2016.
5.2 Operating Profit during March 2017 Quarter stood at Rs.1054.54 crore as againstRs.724.92 crore during March 2016 increased by 45.47%.
5.3 NIM for the March 2017 Quarter stood at 1.72% as against 1.89% during March 2016Quarter.
5.4 The Asset Utilisation Ratio [percentage of Operating Profit to Average WorkingFunds] stood at 1.85% for the financial year 2016-17 compared to 1.41% for the financialyear 2015-16.
6.1 The Provision for Bad and Doubtful Debts Provision on Standard Assets TaxationInvestment Depreciation and others aggregated to Rs.3878.32 crore in the financial year2016-17 as compared to Rs. 3601.50 crore in the financial year 2015-16.
7. Net Profit and Dividend:
7.1 After considering the provisions the Net Profit of the Bank stood a Rs.561.21crore for the financial year 2016-17 as against the net loss of Rs. -506.48 crore for theyear ended 31.03.2016.
|Year ||Net Profit [' in crore] ||Growth % |
|2013-14 ||561.72 ||(-)60.85% |
|2014-15 ||584.26 ||(+)4.01% |
|2015-16 ||-506.48 ||(-)186.69% |
|2016-17 ||561.21 ||(+)210.81% |
7.2 The Board of Directors of the Bank has not recommended any Dividend for thefinancial year 2016-17.
7.3 Out of the Net Profit a sum of Rs.140.30 crore was appropriated to StatutoryReserves Rs.374.79 crore to Capital Reserve Rs.24.62 crore withdrawn from InvestmentReserve. Also Rs.15 crore was appropriated towards Staff Welfare Fund.
8. Net Worth and CRAR:
8.1 The Net Worth of the Bank improved to Rs.12712.00 crore as on 31stMarch 2017 from Rs.11366.00 crore as on 31st March 2016.
8.2 During the year Government of India has allocated funds to the tune of Rs.677crore out of which Govt. of India has infused only Rs.508 crore towards equity capital inthe Bank. Accordingly the Bank raised equity capital by way of preferential issueamounting upto Rs.508 crore including premium. For this Bank has issued 124570868equity shares of'2/- face value at a premium of'38.78 per equity share and allotted toGovernment of India on preferential basis on September 28 2016. The Bank has also raisedBasel III compliant Additional Tier-1 Bond (Series II) of Rs.500 crore on privateplacement basis and allotted to the respective bondholders on 24.03.2017.
8.3 The Capital to Risk Adjusted Assets Ratio (CRAR) stood at 11.90% (Basel II) as on31st March 2017 as against 10.88% as on 31st March 2016. The CRAR as per Basel IIIguidelines works out to 11.32% as on 31st March 2017 as against 10.56% as on 31st March2016.
| || |
III Basel III
II Basel II
|MdJ Category ||March |
|id't I nOl Tier I Capital ||7.93% ||8.90% ||7.33% ||8.46% |
|fO'a II nOr Tier II Capital ||2.63% ||2.42% ||3.55% ||3.44% |
|Total ||10.56% ||11.32% ||10.88% ||11.90% |
8.4 The Return on Equity Earnings Per Share and Book Value per Share for the FinancialYear 2016-17 stood at 4.66% Rs.5.17 and Rs.110.82 respectively as against -4.64%Rs.-5.48 and Rs.111.16 respectively for the previous Financial year. The impact of raisingof Equity Capital of the Bank given effect during Financial Year 2016-17 for thiscalculation.
9. Consolidated Accounts:
9.1 As per RBI guidelines the Bank has consolidated the financial accounts as at 31stMarch 2017 with those of its wholly owned Subsidiary viz. Corp Bank Securities Ltd. Asper the consolidated statement as on 31st March 2017 the Net Worth of the Corp Bankgroup stood at Rs.12749.90 crore. The consolidated Operating Profit for the financialyear 2016-17 stood at Rs.4446.31 crore as against Rs.3101.88 crore as at 31.03.2016.During the Financial Year 2016-17 consolidated Net Profit ofthe Bank stood at Rs.565.81crore as against loss of Rs.-502.00 crore for the year ended 31.03.2016. The Bank hascomplied with the RBI guidelines and the Accounting Standards prescribed by the Instituteof Chartered Accountants of India.
10. Bank's Service Outlets:
10.1 The Bank's total service outlets crossed 10400 mark during the year ended 31stMarch 2017 to reach 10413 service outlets comprising of2517 branches 3169 ATMs and4727 Branchless Banking Units across the country. Out of these 77 branches (including 10branches opened in unbanked rural centres) 129 ATMs and 3 Branchless banking Units wereopened during the year. The Bank is also having its representative offices at Hong Kongand Dubai for catering to the existing and prospective NRI customers. Out of the total2517 branches 589 branches are in Rural areas 795 in Semi-urban centres 537 in Urbanareas and 596 in Metro centres. Similarly of the total 3169 ATMs 691 are in ruralareas 981 in Semi-urban centres 793 in urban areas and 696 are in Metros.
10.2 The Bank now has a total of 34 zonal offices spread across the country to have abetter control monitoring and follow up with the branches for business development. TheBank also has 6 Circle offices headed by General Managers operating at Mumbai DelhiBangalore Chennai Kolkata and Ahmedabad. The Circle Offices function as an extended armof the Corporate Office better equipped to support and drive business development plansthrough the Zonal Offices in their Command area. The Corporate office functions that aredelegated to Circle Offices are Planning Development and Resource Mobilisation CreditSanctions Credit Risk Management Recovery and Legal Human Resource Management SupportServices and Inspection and Audit.
11. Advertisement and Publicity:
11.1 During the year concerted efforts were made for enhancing the brand and image ofthe Bank. The Bank continued to disseminate messages on its products services interestrates and its performance to the customers shareholders and the general public throughadvertisements and publicity in Newspapers Periodicals TV Channels FM Radio StationsHoardings Translites Website ATMs etc.
12. Government Business and Bancassurance:
12.1 The total Direct/Indirect tax Customs duty and State Tax collections of the Bankfor the year ended 31st March 2017 reached Rs.79622 crore from 28.43 lakh challans ascompared to Rs.69393 crore from 25.80 Lakh challans collected during the correspondingperiod last year with a growth rate of 14.74% and 10.19% respectively. The Bank has earnedan aggregate income of Rs.8.88 crore from Govt. Business during the year.
12.2 Some of the new initiatives undertaken by the Bank during the year are
Secured authorization of 2175 branches for handling Small Savings Scheme (PPF SeniorCitizen Savings Scheme and Sukanya Samriddhi Yojana) from Government of India.
Secured authorization for online collection of contribution and administrative chargeson behalf of the Employees Provident Fund Organisation (EPFO).
Chattisgarh and West Bengal states have been added for collection of state taxes.
E-Freight facility has been operationalised for Railways freight payment.
Bank has canvassed 598696 policies with premium of '21534.49 lakhs and earnedcommission of Rs.1042.80 lakhs as at March 2017 (This includes 583613 enrolments madeunder Pradhan Mantri Jeevan Jyoti Bima Yojana with premium of Rs. 1686.64 lakhs andcommission of Rs.239.28 lakhs) as against 582006 policies with premium of Rs.15898.36lakhs and commission of Rs.932.61 lakhs as at March 2016 under Life Insurance Business.
Bank has canvassed 1367682 policies with premium of Rs.3889.97 lakhs and commissionof Rs.344.59 lakhs as at March 2017 (This includes 1273364 enrolments made underPradhan Mantri Suraksha Bima Yojana with premium of Rs.152.80 lakhs and earned commissionof Rs.25.46 lakhs) as against 1303045 policies with premium of Rs.3848.11 lakhs andcommission of Rs.317.07 lakhs as at March 2016 under non-life Business.
Bank has earned a commission of Rs.19.84 lakhs for the year ended March 2017 underHealth Insurance Policy as against Rs.13.16 lakhs as at March 2016.
Bank has earned a commission of Rs.16.99 lakhs for the year ended March 2017 underMutual Fund Business as against Rs.15.81 lakhs as at March 2016.
13. Corporation Bank Economic Development Foundation:
The Corporation Bank Economic Development Foundation is a non-profit Economic OutfitTrust has been pursuing its objectives 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 concerns during the year 2016-17 through CBDEF. Amongst others CBEDFimplemented following major CSR projects during FY 2016-17.
13.1 "CorpKiran" Association of Spouses of Bank Executives
For the welfare of underprivileged through "CorpKiran" Bank grantedRs.19.71 lakhs to various Institutions during 2016-17. The major activities includedproviding food books computers water purifier etc. to poor school children and inmatesof orphanages old age homes destitute homes helping physically and mentally challengedpeople. The major activities carried out during the year under CorpKiran includesinstallation of projector and computers to Govt./aided schools. Orphanages are providedwith furniture and water purifiers.
13.2 Corporation Bank Self-Employment Training Institutes [COBSETI]
The Corporation Bank Self-Employment Training Institutes are operating in Chikmagalurand Kodagu Districts catering to the training needs of the rural unemployed youth hailingfrom both the districts where the Bank has the Lead Bank responsibility. Around 31000candidates have been trained under regular and other programmes by both the institutessince inception. Under Entrepreneurship Development Programes (EDP) 14595 candidates havebeen trained of which 11000 candidates have established their own enterprise indicatinga success rate of 75%. The Bank has incurred an expenditure of Rs.50.39 lakh during theyear 2016-17 for conducting the training programmes at both the Institutes. COBSETIChikmagalur has been graded as "AA" Training Institute and COBSETI Kudigeis graded as "A" by the Ministry of Rural Development for year the year 2016.
13.3 "Gramina Abhyudaya Financial Literacy Trust" [GAFL Trust]
The Bank has sponsored Grameena Abhyudaya Financial Literacy Trust for establishing"Financial Literacy
Centers" [FLCs] at various locations. These Centers educate people about theusefulness of the Bank account for all their economic needs and empowerment. The Centersalso provide counseling for the borrowers on the basis of financial aspects includinginsurance savings and credit related products/services in the Bank etc. As on 31.03.2017GAFLCC Trust has established 4 District level and 18 Block level FLC centers.
The Bank has provided Rs.50.00 Lakh for meeting the recurring cost of the Trust duringthe year 2016-17. The Trust has conducted 1984 Financial Literacy Camps at villagesschools colleges other institutions SHGs and others covering about 92000 persons.
13.4 CSR through SHG formation:
During the year the Bank has spent Rs.89 lakhs for promoting 8900 new SHGs in 6districts of Karnataka. Through this major CSR initiative Bank has helped about 89000families of the members of SHG groups to become financially empowered. They now haveaccess to banking facilities including deposits and loans. They also receive training inrecord maintenance and account keeping of their respective groups. Regular meetings of thegroups encourage the members to freely interact and become more vocal.
14. Progressive use of Official Language:
14.1 The Bank ensures compliance of the provision of Official Languages Act 1963Official Languages Rules 1976 and various directions with regard to Official Languageissued from time to time by Department of Official Language Ministry of Home AffairsFinancial Services Department Ministry of Finance and the Reserve Bank of India.
14.2 The overall performance of the Bank in the field of official languageimplementation during the year 2016-17 has been very good. Our Noida Main Branch underDelhi (North) Mysore Bhubneshwar Zones and Staff Training College Bangalore receivedshield from their respective Town Official Language Implementation Committee (TOLIC) fortheir excellent performance in Offical Language implementation.
14.3 The Bank is the convenor of Town Official Language Implementation Committee(TOLIC) Mangalore Belgaum Vijayawada and Nellore as well as that of the OfficialLanguage Committee of South Based Public Sector Banks. Various activities are conductedevery year for the benefit of staff members of member organisations/ banks.
14.4 During the Financial Year the Third Sub-Committee of the Committee of Parliamenton Official Language visited our Rewari and Porbandar Branch and appreciated the effortsbeing made by the Bank in Official Language Implementation.
14.5 Bank is the Convenor of the Official Language Implementation Committee of thesouth based Public Sector Banks. The committee deliberates on the problems faced by thesouth based public sector banks in Official Language implementation and providesappropriate remedies for the same.
14.6 Bankj ointly organized the " Bhashayi Souhard Diwas (Hindi Diwas)" on21st Sept. 2016 with TOLIC Mangalore and organized five days basic training programmeunder the auspices of Hindi Teaching Scheme (W) Ministry of Home Affairs OfficialLanguage Department from 06.03.2017 to 10.03.2017 for Hindi work on Computer.
14.7 The Bank is bringing out various publications for popularizing Official LanguageHindi. These include "Mangala" quarterly Hindi house-journal of the Bankand "Tridhara" Hindi Journal published on behalf of TOLIC Mangalore.Apart of these publications Bank has published Annual Programme and Incentive Schemes2016-17 A book on Hindi Workshop Compendium of the orders of Ministry of Finance andvarious brochures.
14.8 Hindi workshops and training programmes were conducted on a regular basis for thebenefit of staff members.
15. Performance of Subsidiaries and other units sponsored by the Bank:
15.1 Corp Bank Securities Limited: The Bank's wholly owned subsidiary Corp BankSecurities Limited (CBSL) has earned a total income of Rs.8.04 crore posted Profit BeforeTax of Rs.6.78 crore and Profit After Tax of Rs.4.60 crore (after accounting for taxprovision of Rs.1.36 crore for current year tax provision of Rs.0.07 crore for earlieryears reversal of deferred tax asset of Rs.0.0038 crore and MAT credit set off of Rs.0.90crore) for FY 2016-17 while the corresponding figures for FY 2015-16 were Rs.8.18 croreRs.6.86 crore and Rs.4.47 crore respectively (after accounting of tax provision of Rs.1.45crore for current year tax provision of Rs.NIL for earlier years reversal of deferredtax asset of Rs.0.0041 crore and Rs.0.94 crore being MAT credit set off). The Paid upEquity Share Capital remained at Rs.75 crore as on 31.03.2017 while the Net worth stood atRs.112.96 crore with the plough back of surplus. The Earning per Share for fiscal endedMarch 2017 was Rs.0.61 while it was Rs.0.60 for the fiscal ended March 2016. The Companyhad launched equity broking business for institutional clients in FY 2015-16. The Companyalso continues to pursue its other activity of distribution of Mutual Fund Products andtrading in approved Securities like Commercial Papers Certificate of Deposits andTreasury Bills etc.
16. Constitution of Board of Director:
16.1 The following changes have taken place in the Board of Directors of the Bankduring the financial year ended 31st March 2017.
16.2 Shri Deverakonda Diptivilasa was appointed as NonOfficial Part Time Director onthe Board of the Bank with effect from 25th April 2016.
16.3 Shri Gopal Murli Bhagat was appointed as Executive Director on the Board of theBank and assumed office on 24th August 2016.
16.4 The following members retired from the Board of the Bank during the period 2016-17:
Shri Ekanath Baliga Officers' Employee Director on completion of his term on 16thOctober 2016.
Shri Bonam Venkata Bhaskar part-time Non-official Director on completion of histerm on 3rd November 2016.
Shri Adish Kumar Jain part-time Non-official Director under CharteredAccountant Category on completion of his term on 25th December 2016.
16.5 The Board places on record its appreciation for the guidance and counsel receivedfrom Shri Adish Kumar Jain Shri Bonam Venkata Bhaskar and Shri Ekanath Baliga duringdeliberations of the Board/Committees of the Board and also in the conduct of the Bank'sbusiness during their tenure of office as Directors of the Bank.
17. Directors' Responsibility Statements:
The Directors confirm that in the preparation of the Annual Accounts for the year ended31st March 2017:-
17.1 The applicable Accounting Standards had been followed along with properexplanation relating to material departures if any.
17.2 Accounting Policies had been selected and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Bank at the end of the financial year and of the profit andloss of the Bank for that period.
17.3 Proper and sufficient care was taken for the maintenance of adequate AccountingRecords in accordance with the provisions of the relevant Acts for safeguarding the assetsof the Bank and for preventing and detecting fraud and other irregularities.
17.4 The Annual Accounts were prepared on a going concern basis.
17.5 Internal financial controls had been laid down to be followed by the Bank and thatsuch internal financial controls are adequate and were operating effectively.
17.6 Proper systems were in place to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
18.1 The Directors thank the shareholders valued customers well-wishers ShareTransfer Agent and correspondents of the Bank in India and abroad for their goodwillpatronage and support.
18.2 The Directors acknowledge with gratitude the valuable and timely advice guidanceand support received from Government of India Government of Karnataka Reserve Bank ofIndia Securities and Exchange Board of India (SEBI) BSE NSE NSDL CDSL various StateGovernments Financial Institutions and the Statutory Central Auditors of the Bank in thefunctioning of the Bank.
18.3 The Directors place on record their deep appreciation of the valuable contributionof the members of the staff at all levels for the progress of the Bank during the year andlook forward to their continued co-operation in realisation of the corporate goals of theBank in the years ahead.
For and on behalf of the Board of Directors
| ||(Jai Kumar Garg) |
|Place : Mangaluru ||Managing Director & Chief Executive Officer |
|Date : 01.06.2017 || |