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BSE 05:30 | 01 Jan
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. () - Chairman Speech

Company chairman speech

Dear Shareholders

I am glad to have the opportunity to lead Corporation Bank as MD & CEO and I thankthe Government of India for entrusting the responsibility to head this esteemed Bank inchallenging times. We have the responsibilities to make the Bank modern and techno savvyto increase the value for all its stakeholders and also to bring back the past glory toour beloved 113 year-old institution.

It gives me great pleasure to place before you the highlights of your Bank'sperformance during the financial year 2018-19. Details of the achievements and initiativesby your Bank are provided in the enclosed Annual Report.

Economic Scenario:

As per the provisional estimates of Central Statistics Office (CSO) the Indian Economyis estimated to grow at 7.0% in the financial year 2018-19 as against 7.2% growthregistered in the corresponding period last year. Despite a marginal slowdown over thelast year India has cemented its credentials as the world's fastest expanding majoreconomy in the world. Going forward the economy is expected to display a betterperformance considering the pick-up in consumption and private investments. Besides alow inflation expectation for FY20 has created further room for monetary easing by theRBI which is expected to support the growth momentum.

As far as banking sector is concerned reforming banks comprehensively is an importantobjective of the Government. As part of Reforms the Governement and Public Sector Banks(PSBs) are jointly committed to launch "PSB Reforms Agenda" for Enhanced Accessand Service Excellence (EASE). The Reforms Agenda addresses key functional areas in publicsector banks viz. overall governance prudent lending risk management technologydriven clean & smart banking human resources etc. to transform the public sectorbanks landscape.

Insolvency and bankruptcy code (IBC) has also provided a time-bound resolutionframework for the banking sector. IBC has helped the banks to expedite the Recoveryprocess leading to large-scale NPA resolution and recovery.

Banks are also taking significant steps towards digitalisation and are drivingtechnology enabled banking. The mobile-based payments are revolutionising the paymentlandscape in the country. Also the launch of digital platforms TReDS Udyamimitra etc. helps to drive digital lending to reachlast mile.

The reform measures are creating a strong foundation for improving the performance ofbanking sector. With the capital infusion by the Government of India and expectedimprovement in their financial performance the banking sector is expected to positionbetter in the days ahead.

Performance Highlights:

The major highlights of your Bank's performance during 2018-19 are;

Business Growth:

Total Business of the Bank has reached Rs.305819.05 crore as on 31st March2019 as against Rs.303184.79 crore as on 31st March 2018 which consists ofDeposits Rs.184567.84 crore and total Advances Rs.121251.21 crore as on 31stMarch 2019.

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 24.67% as at 31.03.2018to 23.95% as on 31.03.2019.

The balance in saving accounts stood at Rs.42106.72 crore and Current Account stood atRs.16199.76 crore as on 31st March 2019.

Share of CASA in total deposit improved to 31.59% as on 31.03.2019 as compared to29.52% as on 31.03.2018.

Asset Quality and Provisioning:

During the year the severe pressure on quality of assets and the rise of NPA in yourBank was not an isolated case but part of overall Industry phenomenon. The Gross NPA ofyour Bank decreased from Rs.22213.44 crore (17.35%) as at 31.03.2018 to Rs.20723.68crore (15.35%) as at 31.03.2019 and Net NPAs decreased from Rs.14077.02 crore (11.74%) toRs.6926.64 crore (5.71%) during this period.

The provision coverage ratio as on 31.03.2019 is 83.30% with respect to Gross NPA asagainst 63.65% as at 31.03.2018.

The focus during the year was on recovery of NPAs. The employees rose to the challengeand your Bank could effect a recovery in Prudential written-off accounts to the tune ofRs.706.88 crore as compared to Rs. 318.06 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 decreased by Rs.2446.71 crore during the financial year toreach Rs.17494.70 crore.

Interest Spread increased by Rs.670.25 crore (13.85%) during the year. Non-Interestincome decreased by Rs.441.01 crore with a negative growth rate of 19.07% whereasnon-interest expenditure increased by 8.91%. The increase in Interest Spread is on accountof cash recovery in unrealised interest in NCLT accounts and upgraded accounts.

Cost of deposits of the Bank came down from 5.74% for the year 2017-18 to 5.40% for theyear 2018-19.

Operating Profit of the Bank stood at Rs.3894.47 crore during the year 2018-19.However with increased provisioning on NPAs the Bank posted net loss of Rs.6332.98crore for the year 2018-19.

The Bank's consolidated Net worth stood at Rs.16651.45 crore as at 31.03.2019.

Priority Sector Lending:

The Bank has achieved regulatory target under priority sector advances and itssub-sectors. Total Priority Sector advances stood at Rs.63247 crore as on 31.03.2019which works out to 43.82% of Adjusted Net Bank Credit (ANBC) as against the regulatorytarget of 40%. As in the past years your Bank conducted special campaigns duringFinancial Year 2018-19 to augment agriculture advances in both Rabi and Kharif seasons.

Furthermore your Bank introduced tailor-made area specific schemes to cater to thespecific needs of the farming community. A number of initiatives was taken by your Bank tosupport MSME sector given its potential to generate employment and growth.

Micro Small & Medium Enterprises :

Bank has on-boarded loans in 59 minutes portal an online marketplace which willenable In Principle approval for MSME loans up to INR 1 Crore in 59 minutes. All creditproposals of GST registered MSME borrowers are routed through this portal.

Bank has proactively provided relief for MSME Borrowers registered under Goods andServices Tax (GST) as per RBI guidelines thereby facilitating easy repayment of loaninstalments for smaller entities facing difficulty in meeting their repayment obligations.

Bank has also restructured eligible MSME borrowal accounts as per one-timerestructuring facility provided by RBI.

In terms of guidelines issued by Ministry of MSME Bank has claimed 2% interestsubvention for eligible MSMEs during the financial year 2018-19.

Retail Lending :

More focus is being given to Retail Lending for the current FY 2019-20. Bank is goingto upgrade its present LAPS package which is used to process retail loan applications atpresent by implementing End to End Digitisation (Loan Origination System) shortly within2-3 months. This will help us to reduce the turn around time to great extent and also willhelp to maintain quality and monitoring.

Financial Inclusion:

Government of India has allotted 2291 villages grouped into 894 Sub Service Areas(SSAs) spread across 23 states under PMJDY for providing basic banking facilities underFinancial Inclusion Plan of Reserve Bank of India. Your Bank has provided bankinginfrastructure at the allotted villages/SSAs through brick & mortar branch at 269SSAs. In the remaining 625 Sub Service Areas (SSAs) banking infrastructure is provided byengaging Bank Mitras. Apart from the 625 PMJDY locations your Bank has engaged 127 BankMitras in Non-PMJDY locations wherever services of Bank Mitras are needed. Your Bank hasopened branches including banking outlets in 3 aspirational districts allotted to us. YourBank has provided robust STQC certified 1.5.1 version compliant Micro ATMs to all theBank Mitras and all are functioning well. The Micro ATMs along with pin pad have enabledall Bank Mitras to perform online interoperable Aadhaar & pin based transactions.Your Bank has appointed Financial Inclusion Supervisors at 12 Zonal Offices to monitor allthe activities of Bank Mitras

Social Security Schemes :

Considering the importance provided by the Govt. of India on the Social SecuritySchemes Bank has conducted special campaigns during the FY 2018-19 to promote PradhanMantri Jeevan Jyoti Bima Yojana [PMJJBY} Pradhan Mantri Suraksha Bima Yojana [PMSBY] andAtal Pension Yojana [APY]. During the year Bank had fresh enrolments of 61244 underPMJJBY and 150761 under PMSBY apart from renewals of 400295 under PMJJBY and 1085044under PMSBY. Bank also enrolled 37312 under APY during the year FY2018-19.

New Products launched:

• Bank has replaced the existing Internet Banking with a contemporary NewInternet Banking viz. "FEBA"- Finacle e-Banking Application with ahost of added features and facilities. FEBA has been made available to customers witheffect from 10.09.2018. Customizable desk-top transaction limit self-registration MobileToken for quick access of the application are some of the key features of FEBA.

New Initiatives:

• Bank's fully revamped Mobile Banking Solution CorpEASE was rolled out forboth Android and iOS platforms. CorpEASE collaborates a host of banking operations likefunds transfer bill payment deposit opening & closure cheque book request passbookmanagement holiday information etc. enabling the customer to do banking transactions atthe time and location of his convenience. The application is available in English Hindiand eight other Indian languages - Kannada Tamil Telugu Malayalam Marathi GujaratiPunjabi and Oriya. The Bank has also introduced the features of Green Pin [online debitcard pin generation] and a facility for customers to block/unblock their debit cards asper their need.

• To enhance customer experience and convenience the Bank went live on "TABLETBanking'' for Domestic customers for opening running accounts. Customer authenticationis done through eKYC and the details are parsed and updated in Core Banking Solutionautomatically.

CSR and Empowerment Initiatives:

1. The Corporation Bank Economic Development Foundation (CBEDF) a non-profit economicoutfit Trust 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.371.65 lakhs were disbursed for execution of variousprojects of social concerns during the year 2018-19 through CBEDF. Amongst others CBEDFimplemented following major CSR projects during FY 2018-19.

2. For the welfare of underprivileged through "CorpKiran" Bank grantedRs.22.29 lakhs to various Institutions during 2018-19. The major activities includedproviding Bench Desk Cupboards Computers Water purifier Pedestral Fans etc. to poorschool children and inmates of orphanages old age homes destitute homes helpingphysically and mentally challenged people Ambulance to Kalyanam Karoti (NGO) Meerut andthree dialysis machines to Shimoga Institutes of Medical Sciences Shimoga.

Branch/ATM Expansion:

• The number of branches stood at 2432 as on 31.03.2019. The Bank has pan Indiapresence covering 26 states and 5 union territories out of 29 states and 7 unionterritories respectively.

• Number of ATMs stood 3015 out of which 651 are in Metro 734 are in Urban 951are in Semi urban and 679 are in Rural. The number E-Lobbies as on 31st March 2019 is345.

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 2018-19:-

1. The Bank bagged three awards instituted by Chamber of Indian Micro Small &Medium Enterprises [CIMSME] consecutively for the 5th year in a row under thefollowing categories:

a. Best MSME Bank Award - Runner up (Emerging Category).

b. CSR Initiatives & Business Responsibility Award - Winner (Emerging Category)

c. Best Bank for Promotional Schemes Award - Runner up (Emerging Category)

2. The Bank bagged "Investor Relations Awards 2018" under category –Best Expectation Management (Mid Cap) for the FY 2017-18.

3. The Bank bagged the Best Community Development Award at the National CSR LeadershipCongress and Awards function held at Bengaluru on 5th September 2018.

4. The Bank bagged three awards under the Aadhaar Excellence Awards institutedby Unique Identification Authority of India (UIDAI). a. The Bank bagged 2nd place underthe Rising Star Award category. b. Bank was conferred 3rd position in the Best PerformingBank for Aadhaar Enrollment/Update Using Online Client. c. The Bank's Ahmedabad-ShahibaugBranch was awarded the Best Bank Branch for highest Enrollments/ updations for the Bank.

5. The Bank once again bagged the "BEST MSME BANK-WINNER 2018" awardduring 6th ASSOCHAM SMEs Excellence Award – 2018 instituted by TheAssociated Chambers of Commerce & Industry of India (ASSOCHAM).

6. The Bank bagged SKOCH Order-of-Merit 2018 Awards under the following categories:

a. Financial Inclusion

b. Road Map to be Best in Insurance Penetration

c. Implementation of Technology in Forex



OnbehalfoftheBankIwouldliketoexpressmysinceregratitude to all the shareholders fortheir persistent support for overall development of the Bank. I sincerely thank themembers of the Board Govt. of India Reserve Bank of India all the regulatoryauthorities and organisations and Insurance Companies for their valuable support andinputs to the Management in all it's endeavours. I thank all our customers for theircontinued support & patronage and the opportunity given to us to serve them anddevelop business relationship. The dedication commitment and contribution of our belovedemployees for the growth of the Bank deserve special appreciation.

I am sure with your continued support and confidence commitment of 19000 plus CorpBankers very able leadership and guidance of our Directors on the Board your Bank willable to surpass the expectations of all the stakeholders – our customers our staffand our shareholders. We look forward to your valuable support and goodwill in ourJourney.

With best wishes
Yours Sincerely
Place : Mangaluru P. V. Bharathi
Date : 30.05.2019 Managing Director & CEO