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 2016.
2. Performance at a Glance :
2.1 The total business reached a level of Rs 345493.08 crore as on 31st March 2016recording an absolute growth of Rs 1081.22 crore over the business figure of Rs344411.86 crore as on 31.03.2015 at a growth rate of 0.31%. 2.2 The total deposits ofthe Bank increased to Rs 205170.84 crore as on 31.03.2016 from Rs 199345.82 crore ason 31st March 2015 registering a growth of 2.92% y-o-y.
2.3 Share of CASA in total deposits stood at 22.14% as on 31.03.2016 as compared to19.72% as on 31.03.2015.
Savings Deposits grew at a rate of 17.42%. Average CASA growth during 2015-16 stood at11.14%.
2.4 The Bank continued its prudent approach in expanding quality credit assets in linewith its policy on Credit Risk Management. The Banks credit figure stood at Rs140322.24 crore as on 31.03.2016 as against Rs 145066.04 crore as on 31st March 2015decreased by Rs -4743.80 crore (-3.27%.). During the financial year focused attentionwas given for accelerated lending under Priority sector midsize corporate and MSME forexpansion of credit. 2.5 Credit-Deposit Ratio stood at 68.39% as on 31.03.2016 as comparedto 72.77% as on 31.03.2015.
2.6 The Bank continued its focus on recovery of NPAs.
During the financial year the Bank effected a cash recovery and upgradation of NPAs ofRs 1596.04 crore as compared to Rs 1484.73 crore in the previous financial year.
2.7 The bank posted a Net loss of Rs 506.48 crore as against a Net Profit of Rs584.26 crore in the previous year. 2.8 As on 31.03.2016 the Bank had 10207 functionalunits spread across India comprising of 2440 Branches 3040 ATMs and 4727 Branchlessbanking units.
3. Income Analysis
3.1 Interest Income of the Bank decreased by Rs 145.20 Crore (0.74%) from Rs19556.44 crore in the year 2014-15 to Rs 19411.24 crore during the year 2015-16 andInterest expenses decreased by Rs 314.32 crore from Rs 15486.10 crore during thefinancial year 2014-15 to Rs 15171.78 crore during the year 2015-16. The Net InterestIncome recorded a growth of Rs 169.12 crore [4.16%] during the same period.
|Particulars ||2014-15 ||2015-16 ||Change in % |
|INCOME || || || |
|Interest Income ||19556.44 ||19411.24 ||0.74% |
|Non-Interest Income ||1482.47 ||1735.16 ||17.05% |
|Total Income ||21038.91 ||21146.40 ||0.51% |
|EXPENDITURE || || || |
|Interest Expenditure ||15486.10 ||15171.78 ||2.03% |
|Operating Expenses ||2525.36 ||2879.60 ||14.03% |
|Total Expenditure ||18011.46 ||18051.38 ||0.22% |
|Operating Profit ||3027.45 ||3095.02 ||2.23% |
|Provisions & Contingencies (Excl. Tax) ||2551.99 ||5026.33 || |
|Profit before Tax ||475.46 ||1931.31 || |
|Provision for Tax ||108.80 ||1424.83 || |
|Net Profit ||584.26 ||506.48 || |
3.2 The total Income of the Bank [total of Interest Income and Non-Interest Income]improved to Rs 21146.40 crore during the financial year 2015-16 from Rs 21038.91 crorein the previous financial year recording a rise of Rs 107.49crore [0.51%].
3.3 Non-Interest Income from Core Areas increased by Rs 120.75 crore [10.64%] from Rs1135.10 crore in the financial year 2014-15 to Rs 1255.85 crore in the financial year2015-16. The total Non-Interest Income has increased to Rs 1735.16 as on 31.03.2016 fromRs 1482.47 crore as on 31.03.2015 there by registered growth rate of 17.05%. 3.4 TheOperating Expenses has shown an increase of 14.03% during the financial year 2015-16 andstood at Rs 2879.60 crore as compared to Rs 2525.36 crore in 2014-15. 3.5 Staff expensesincreased from Rs 1182.22 crore during FY2014-15 to Rs 1373.18 crore during FY2015-16.
|Particulars ||2014-15 ||2015-16 ||Growth Absolute ||% |
|Average Working Funds ||210960.00 ||220056.00 ||9096.00 ||4.31% |
|Total Interest Income ||19556.44 ||19411.24 ||145.20 ||0.74% |
|Total Interest Expended ||15486.10 ||15171.78 ||314.32 ||2.03% |
|Interest Spread ||4070.34 ||4239.46 ||169.12 ||4.16% |
|Particulars ||2014-15 ||2015-16 |
|Yield on Funds ||9.27% ||8.82% |
|Cost of Funds ||7.34% ||6.89% |
|Yield on Advances ||11.07% ||10.23% |
|Cost of Deposits ||7.97% ||7.51% |
|Net Interest Margin ||2.07% ||2.06% |
5. Operating Profit
5.1 The Operating Profit stood at Rs 3095.02 crore as at the end of March 2016 ascompared to Rs 3027.45 crore as on 31.03.2015.
5.2 Operating Profit during March 16 Quarter stood at Rs 724.92 crore as againstRs 965.37 crore during March15 decreased by 24.91%.
5.3 NIM for the March16 Quarter stood at 1.89% as against 2.26% during March15 Quarter.
5.4 The Asset Utilisation Ratio [percentage of Operating Profit to Average WorkingFunds] stood at 1.41% for the financial year 2015-16 compared to 1.44% for the financialyear 2014-15.
6.1 The Provision for Bad and Doubtful Debts Provision on Standard Assets TaxationInvestment Depreciation and others aggregated to Rs 3601.50 crore in the financial year2015-16 as compared to Rs 2443.19 crore in the financial year 2014-15.
7. Net Profit and Dividend
7.1 After considering the provisions the Net loss of the Bank stood a Rs 506.48crore for the financial year 2015-16 as against the net profit of Rs 584.26 crore for theyear ended 31.03.2015.
|Year ||Net Profit [ Rs in crore] ||Growth % |
|2013-14 ||561.72 ||() 60.85% |
|2014-15 ||584.26 ||(+) 4.01% |
|2015-16 ||506.48 ||()186.69% |
7.2 The Board of Directors of the Bank has not recommended any Dividend for thefinancial year 2015-16.
7.3 No Appropriation is proposed as the Bank has incurred loss during the FinancialYear 2015-16.
8. Net Worth and CRAR
8.1 The Net Worth of the Bank improved to Rs 11344.02 crore as on 31st March 2016from Rs 10484.48 crore as on 31st March 2015.
8.2 During the year the Bank raised Equity Capital in the form of preferentialallotment amounting upto Rs 1000 crore including premium. Out of Rs 1000 crore156615497 equity shares of Rs 2/- face value at a premium of Rs 52.72 per share havebeen issued and allotted to Government of India on preferential basis on September 302015 for a total consideration of Rs 857.00 crores and 28160693 equity shares of Rs 2/-face value at a premium of Rs 48.78 per share have been issued and allotted to LifeInsurance Corporation of India on preferential basis on December 31 2015 for a totalconsideration of Rs 143.00 crore.
8.3 The Capital to Risk Adjusted Assets Ratio (CRAR) stood at 10.88% (Basel II) as on31st March 2016 as against 11.80% as on 31st March 2015. The CRAR as per BaselIII guidelines works out to 10.56% as on 31st March 2016 as against 11.09% as on 31stMarch 2015.
| ||III Basel III ||II Basel II |
|Category ||March ||March ||March ||March |
| ||2015 ||2016 ||2015 ||2016 |
|ITier I Capital ||8.05% ||7.93% ||8.28% ||7.33% |
|II Tier II Capital ||3.04% ||2.63% ||3.52% ||3.55% |
|Total ||11.09% ||10.56% ||11.80% ||10.88% |
8.4 The Return on Equity Earnings Per Share and Book Value per Share for the FinancialYear 2015-16 stood at 4.64% Rs 5.48 and Rs 110.94 respectively as against5.68% Rs 6.97 and Rs 125.16 respectively for the previous Financial year. The impact ofraising of Equity Capital of the Bank given effect during Financial Year 2015-16 for thiscalculation.
9. Consolidated Accounts
9.1 As per RBI guidelines the Bank has consolidated the financial accounts as at 31stMarch 2016 with those of its wholly owned Subsidiary viz. Corp Bank Securities Ltd. Asper the consolidated statement as on 31st March 2016 the Net Worth of the Corp Bankgroup stood at Rs 11377.73 crore. The consolidated Operating Profit for the financialyear 2015-16 stood at Rs 3108.88 crore as against Rs 3019.11 crore as at 31.03.2015.During the Financial Year 2015-16 consolidated Net loss of the Bank stood at Rs502.00 crore as against profit of Rs 572.87 crore for the year ended 31.03.2015.The Bank has complied with the RBI guidelines and the Accounting Standards prescribed bythe Institute of Chartered Accountants of India.
10. Banks Service Outlets
10.1 The Banks total service outlets crossed 10200 mark during the year ended31st March 2016 to reach 10207 service outlets comprising of 2440 branches 3040 ATMsand 4727 Branchless Banking Units across the country. Out of these 156 branches(including 40 branches opened in unbanked rural centres) 107 ATMs and 39 Branchlessbanking Units were opened during the year. The Bank is also having its representativeoffices at Hong Kong and Dubai for catering to the existing and prospective NRI customers.Out of the total 2440 branches 635 branches are in Rural areas 804 in Semi-urbancentres 510 in Urban areas and 491 in Metro centres. Similarly of the total 3040 ATMs652 are in rural areas 951 in Semi-urban centres 752 in urban areas and 685 are inMetros.
10.2 To explore the potential and with a focused approach for business development inthat region a new Zonal Office was opened at Rajkot on 01.06.2015 with 12 districtscarved out from the existing Ahmedabad zone for better administration control andmonitoring of the business and for undertaking branch expansion and improve customerservice in the Saurashtra region of Gujarat. With the above the Bank now has a total of34 zonal offices spread across the country to have a better control monitoring and followup with the branches for business development. The Bank also has 6 Circle offices headedby General Managers operating at Mumbai Delhi Bangalore Chennai Kolkata and Ahmedabad.The Circle offices function as an extended arm of the Corporate Office better equipped tosupport and drive business development plans through the Zonal Offices in their Commandarea. The Corporate office functions that are delegated to Circle offices are PlanningDevelopment and Resource Mobilisation Credit Sanctions Credit Risk Management Recoveryand Legal Human Resource Management Support Services and Inspection and Audit.
11. Advertisement and Publicity
11.1 During the year concerted efforts were made for enhancing the brand andimage of the Bank. The Bank continued to disseminate messages on its products servicesinterest rates and its performance to the customers shareholders and the general publicthrough advertisements and publicity in Newspapers Periodicals TV Channels FM RadioStations Hoardings Translites Website ATMs etc.
12. Government Business and Bancassurance
The total Direct/Indirect tax and Customs duty collections of the Bank for theyear ended 31stMarch 2016 reached Rs 62206 crore from 17.94 lakh challans as compared toRs 44453 crore from 16.77 Lakh challans collected during the last year with a growth rateof 39.94% and 6.98% respectively. The total State VAT collections for the year ended 31stMarch 2016 reached Rs 7187 crore from 7.86 Lakh challans as against Rs 6597crore from6.56 Lakh challans collected last year with a growth rate of 8.94% and 19.82%respectively.
The Bank has earned an aggregate income of Rs 8.87crore under Govt. Businessduring the FY ended March 2016 as compared to Rs 8.15 crore earned last year.
Some of the new initiatives undertaken by the Bank during the year are authorization for handling State taxes for the states of Kerala and Daman & Diu inaddition to 11 states where the Bank is already authorized for state tax collections.
Bancassurance: Bank has been aggressively marketing Bancassuranceproducts like Life Insurance General Insurance and Mutual Fund business. During the yearthe Bank has earned an income of Rs 12.98 crore from these businesses as compared to Rs10.46 crore in the previous year. During the year Bank has earned Rs 9.52 crore from LICbusiness Rs 3.30 crore from General Insurance business and Rs 0.16 crore from Mutual Fundbusiness.
13. Corporation Bank Economic Development Foundation
The Corporation Bank Economic Development Foundation 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 476.88 lakhs were disbursed for execution of variousprojects of social concerns during the year 2015-16 through CBDEF. Amongst others CBEDFimplemented following major CSR projects during FY 2015-16.
13.1 "CorpKiran" Association of Spouses of Bank Executives
For the welfare of underprivileged through "CorpKiran" Bank granted Rs46.94 lakhs to various Institutions during 2015-16. 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 participation in Road Safety week at Mangalore. Out of the 127 activitiesconducted under this scheme 17 Govt. Schools were sanctioned with a financial grant topurchase computers LCD TV and multimedia projectors to equip them with modern technology20 old age homes and destitute homes were provided with daily needs like groceryblankets ceiling fans etc. Sanitation activities like construction of toilet blocks forgirls in the Govt. Schools were also carried out under "CorpKiran". Otheractivities under the project includes assisting blood banks in conducting blood donationcamps donation of blood weighing scale to the blood banks etc.
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 29000candidates have been trained by both the institutes since inception. Under EDP 9499trained candidates by both the COBSETIs have settled indicating a success rate of 74%. The Bank has incurred an expenditure of Rs 62.44 lakh during the year for conductingthe training programmes at both the Institutes. COBSETI Chikmagalur has been graded as"AA" Training Institute and COBSETI- Kodagu graded as "A" by theMinistry of Rural Development for the year 2015.
13.3 "Gramina Abhyudaya Financial Literacy Trust" [GAFL Trust]
The Bank has sponsored GAFL Trust for establishing "Financial LiteracyCenters" [FLCs] at various locations. These Centers educate people about theusefulness of the Banking facilities for all their economic needs and empowerment. TheCenters also provide counseling for the borrowers on the basis of financial aspectsincluding insurance savings and credit related products/services in the Bank etc. As on31.03.2016 GAFLCC Trust has established 4 District level and 18 Block level FLC centers.
During the year 2015-16 the Bank has provided Rs 40.00 Lakh for meeting the recurringcost of the Trust. The Trust has conducted 2084 Financial Literacy Camps at schoolscolleges other institutions SHGs and others involving 94810 persons.
13.4 CSR through SHG formation
During the year the Bank has incurred an expenditure of Rs 1.31 crore for promoting13100 new Self Help
Groups in 5 districts of Karnataka. Rural women are encouraged to form Self HelpGroups to whom intensive orientation/training is given to bring about attitudinal changetowards development maintenance of books of accounts fund management thrift for savinginternal lending and group dynamic. Through this major CSR initiative Bank has helpedabout 131000 families of the members of SHG groups to become financially empowered. Theynow have access to banking facilities including deposits and loans. Regular meetings ofthe groups encourage the members to freely interact and become more vocal.
13.5 SwachhVidyala Campaign
Bank successfully completed renovation of 114 dysfunctional toilets in 53 schoolsacross the country under "SwachhVidyala Campaign" as directed by MoHRD GOI. Theprompt completion of the project in time has been appreciated by the Ministry. Bank hasspent Rs 64.00 Lakhs for this purpose.
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 2015-16 has been very good. Our Mysore HubliKolkata Coimbatore Zones and Staff Training College Bangalore received shield from theirrespective Town Official Language Implementation Committee (TOLIC) for their excellentperformance in O.L. implementation. 14.3 The Bank is the convenor of Town OfficialLanguage Implementation Committee (TOLIC) Mangalore Belgaum Vijayawada and Nellore aswell as that of the Official Language Committee of South Based Public Sector Banks.Various activities are conducted every year for the benefit of staff members of memberorganisations/ banks.
14.4 During the Financial Year the Third Sub-Committee of the Committee of Parliamenton Official Language visited our Kullu branch and Zonal Office Delhi (South) andappreciated the efforts being made by the Bank in official language Implementation.
14.5 Bank is the Convenor of the Official Language
Implementation Committee of the south based Public Sector Banks. The committeedeliberates on the problems faced by the south based public sector banks in O.L.implementation and provides appropriate remedies for the same.
14.6 Bank jointly organized the "Bhashayi Souhard Diwas" & "VishwaHindi Diwas" respectively on 8th Oct. 2015 & 13th Jan 2016 with TOLICMangalore. 14.7 On 18th &19th March 2016 Bank organised a seminar on North-East &South Indian Languages and review meeting at Guwahati on instructions of Ministry ofFinance Govt. of India.
14.8 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 Schemes2015-16 A book on Hindi Workshop Compendium of the orders of Ministry of Finance andvarious brochures. 14.9 Hindi workshops and training programmes were conducted on aregular basis for the benefit of staff members.
15. Performance of Subsidiaries and other units sponsored by the Bank 15.1 CorpBank Securities Limited: The Banks wholly owned subsidiary Corp Bank SecuritiesLimited (CBSL) has earned a total income of Rs 8.18 crore posted Profit before Tax of Rs6.86 crore and Profit after Tax of Rs 4.47 crore (after accounting for tax provision of Rs1.45 crore reversal of deferred tax asset of Rs 0.0041 crore and MAT credit set off of Rs0.94 crore) for FY2015-16 while the corresponding figures for FY 2014-15 were Rs 9.93crore
Rs 9.17crore and Rs 6.12crore respectively (after accounting of tax provision of Rs1.85 crore reversal of deferred tax asset of Rs 0.0004 crore and Rs 1.19 crore being MATcredit set off). The Paid up Equity Share Capital remained at Rs 75 crore as on 31.03.2016while the Net worth stood at Rs 108.70 crore with the plough back of surplus. The Earningper Share for fiscal ended March 2016 was Rs 0.60 while it was Rs 0.82 for the fiscalended March 2015. The Company launched equity broking business for institutional clientsin FY 2015-16. The Company also continues to pursue its other activity of distribution ofMutual Fund Products and trading in approved Securities like Certificate of DepositsTreasury 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 31stMarch 2016.
16.2 Shri Jai Kumar Garg was appointed as the Managing Director & Chief ExecutiveOfficer on the Board of the Bank and assumed office on 01.02.2016.
16.3 Shri Sunil Mehta was appointed as Executive Director on the Board of the Bank andassumed office on 22nd January 2016.
16.4 During the Month of April 2016 in the current Financial Year 2016-17 ShriDeverakonda Diptivilasa was appointed as Non-Official Part Time Director on the Board ofthe Bank with effect from 25th April 2016.
16.5 The following members retired from the Board of the Bank during the period2015-16:
Shri S. R. Bansal completed his term of office as Chairman and ManagingDirector on attaining superannuation on 31.01.2016.
Shri B. K. Srivastav completed his term of office as Executive Director onattaining superannuation on 31.12.2015.
16.6 The Board places on record its appreciation for the guidance and counsel receivedfrom Shri S. R. Bansal and Shri B. K. Srivastav during deliberations of the Board/Committees of the Board and also in the conduct of the Banks business during theirtenure 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 2016. 17.1 The applicable Accounting Standards had been followed along withproper explanation 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 Propersystems were in place to ensure compliance with the provisions of all applicable laws andthat 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 andtimely advice guidance and support received from Government of India Government ofKarnataka Reserve Bank of India Securities and Exchange Board of India (SEBI) BSE NSENSDL CDSL various State Governments Financial Institutions and the Statutory CentralAuditors of the Bank in the functioning of the Bank. 18.3 The Directors place on recordtheir deep appreciation of the valuable contribution of the members of the staff at alllevels for the progress of the Bank during the year and look forward to their continuedco-operation in realisation of the corporate goals of the Bank in the years ahead.
| ||For and on behalf of the Board of Directors |
|Place : Mangaluru ||(Jai Kumar Garg) |
|Date : 27.05.2016 ||Managing Director & Chief Executive Officer |