I am presenting the Annual Report and financial statements of your Bankfor the financial year 2017-18. I would like to share with you the performance highlightsand financial indicators of your Bank along with the business environment within whichyour Bank operated during the year.
As per the provisional estimate of Central Statistics Office (CSO) theIndian Economy is expected to register a growth of 6.7% in the financial year 2017-18. TheGDP growth has come down to a three-year low of 5.6% in the first quarter of 2017-18. Theeconomy did recover thereafter to 6.3% in the second quarter 7.0% in the third quarterand 7.7% in the fourth quarter of 2017-18.
Going forward the economic activity in the financial year 2018-19 isexpected to gather pace benefiting from a conducive domestic and global environment.Accordingly the Reserve Bank of India (RBI) has projected the growth to strengthen to7.4% and the Economic Survey has projected the economy to expand between 7.0% to 7.5%.
Factors including stabilisation of Goods and Services Tax improvedcredit off take strengthening investment activity recapitalisation of Public SectorBanks and resolution of distressed assets under the Insolvency and Bankruptcy Code 2016(IBC) improved global trade as well as focus on rural and infrastructure sectors in theUnion Budget are expected to support the growth prospects of the country. However thereare concerns to growth due the geo political events impacting the global crude oil pricesand its impact India's fiscal current account and inflationary scenario. TheNon-Performing Assets (NPAs) have become a major challenge for the banking system. Theoverall level of gross non-performing assets in the system has continued to rise due tothe increased recognition by the banking system. The RBI's revised framework onresolution of stressed assets also requires banks to identify signs of incipient stress inloan accounts and classify stressed assets immediately on default. The RBI and thegovernment are proactively taking steps to resolve NPA challenges in the banking sector.The transparent and time bound resolution of stressed assets under IBC offers a ray ofhope. In the long run the new reforms will bring a good structural change that canstrengthen the banking system in future.
The major highlights of your Bank's performance during 2017-18are;
Total Business of your Bank has reached `303184.79 crore as on 31stMarch 2018 as against `360916.41 crore as on 31st March 2017 Which consists of Deposits`183315.95 crore and TOTAL Advances `119868.84 crore as on 31st March 2018. During theyear the Bank concentrated on Recovery CASA and reduction in the Bulk deposits byreplacing it with retail deposits. The level of Bulk deposit has come down from 38.44% asat 31.03.2017 to 28.75% as on 31.03.2018. During the financial year the saving depositsof the Bank stood at `39424.41 crore and Current Accounts stood at `14698.71 crore as on31st March 2018. Share of CASA in TOTAL deposit improved to 29.52% as on 31.03.2018 ascompared to 26.47% as on 31.03.2017.
Asset Quality and Provisioning:
During the year there was severe pressure on quality of assets and therise of NPA in your Bank was not an isolated case but part of overall Industry phenomenon.The Gross NPA of your Bank increased from `17045.22 crore (11.70%) as at 31.03.2017 to`22213.44 crore (17.35%) as at 31.03.2018 and Net NPAs increased from `11692.18 crore(8.33%) to `14077.02 crore (11.74 %) during this period.
The provision coverage ratio as on 31.03.2018 is 63.65% with respect toGross NPA as against 55.17% as at 31.03.2017. The focus during the year was on recovery ofNPAs. The employees rose to the challenge and your Bank could effect a recovery in PWOAccounts to the tune of `318.06 crore as compared to `135.72 crore in the previousfinancial year. The Reserve Bank of India has placed your Bank in December 2017 underPrompt Corrective Action (PCA) Framework in view of NPA and requirement to raise capitalof the Bank in this direction the bank has taken all efforts to come out of the PCA atthe earliest.
Your Bank will continue its focus and rigorous efforts through vibrantcredit monitoring and NPA recovery system to arrest effectively the rising trend inslippages during the coming years.
Other key performance indicators:
Total Income of the Bank decreased by `2620.37 crore during thefinancial year to reach `19941.41 crore. Interest Spread increased by `387.21 crore(8.70%) during the year. Non-Interest income decreased by ` 777.23 crore due to reductionin trading income from treasury because of pressure in bond yield whereas non-interestexpenditure increased by 3.19%. The increase in Interest Spread is on account of reductionin Cost of Deposits by 100 basis points. Cost of deposits of the Bank has come down from6.74% for the year 2016-17 to 5.74% for the year 2017-18.
Operating Profit of the Bank stood at `3950.42 crore during the year2017-18. However with increased provisioning on NPAs the Bank posted net loss of`4053.94 crore for the year 2017-18.
The Bank's consolidated Net worth stood at `10887.82 crore as at31.03.2018.
Priority Sector Lending:
Your Bank has achieved regulatory target under priority sectoradvances. TOTAL Priority Sector advances including RIDF stood at `68052 crore as on31.03.2018 which works out to 42.44% of Adjusted Net Bank Credit (ANBC) as against theregulatory target of 40%. As in the past years your Bank conducted special campaignsduring Financial Year 2017-18 to augment agriculture advances in both Rabi and Kharifseasons. Furthermore your Bank introduced tailor-made area specific schemes to cater tothe specific needs of the farming community. A number of initiatives were taken by yourBank to support MSME sector given its potential to generate employment and growth. UnderPradhan Mantri MUDRA Yojana (PMMY) Bank has achieved 82.36% of annual disbursementtarget.
Pradhan Mantri Jan Dhan Yojana /Financial Inclusion: Your Bank hasbeen a frontrunner in the Financial Inclusion efforts. The Bank looks at it not just as asocial commitment but also as an effective and profitable business proposition. The Bankhas implemented Financial Inclusion through BranchlessBankingin4393locationsason31.03.2018.Numberofaccounts under Financial inclusion is 40.75lakhs as on 31.03.2018. The Bank has actively participated in implementation of PMJDY. Ason 31.03.2018 27.14 lakhs accounts are opened under PMJDY and Balance outstanding inthese accounts is `1059 Crore. The average balance in non-zero balance PMJDY accounts ason 31.03.2018 is `4543. The percentage of zero balance accounts in PMJDY has been broughtdown to 14.02% (3.83 lakh A/cs) as on 31.03.2018 from 17.59% (4.80 lakh A/cs) as on31.03.2017. Incentive Scheme has been formulated for Bank Mitras for getting funds in theZero balance accounts. Issued RuPay debit cards to 95% of the account holders. Aadhaarnumber has been seeded in 76.16 % of the operative PMJDY accounts. Fixed point Bank Mitrashave been engaged at all the 625 SSAs (covering 2291 villages) where bank branches arenot opened. 93% of the Bank Mitras are active and carry out daily transactions. BankMitras get fixed minimum remuneration of `5000/- p.m. in addition to variable incentivesand hence the attrition of Bank Mitras is one of the lowest. Our Bank has provided robustSTQC certified 1.5.1 version compliant Micro ATMs to all the Bank Mitras and all arefunctioning well. The Micro ATM along with pin pad has enabled all Bank Mitras to performonline interoperable Aadhaar & pin based transactions. Zonal Offices have beenempowered to engage Bank Mitras wherever the unbanked areas exist in the allottedvillages in order to include them under Financial Inclusion.
New Products launched:
Bank has launched New Corp e-Passbook officially on theFounder's day i.e. 12.03.2018. Customers can download their account statement uptolast 3 months through mail either in excel or PDF format besides viewing their accountdetails balances Bank holidays and maintaining personal account ledger using the App.
The coveted technology upgradation project of the Bank -migration from the COBOL-based legacy CBS to contemporary FINACLE-based New CBS wassucessfully completed on 31.10.2017.
As a part of technology transformation Bank has revamped theexisting Mobile Banking application with a New Mobile Banking Application viz."Corp EASE". The facility is available for Android as well as iOSplatforms. In addition to the normal features of mobile bank Corp EASE provides thefeature of blocking/unblocking of debit card to the customers through the App.
The Bank went live on "Corp m-Token" mobile app analternate facility for second factor authentication in lieu of OTP. This is specificallytargeted for NRI customers where delivery of OTP on international numbers was a challenge.The facility is available for Android as well as iOS platforms.
The Bank went live on "OAOS Online Account OpeningSolution" which enables customers to submit their request to open SavingsBank Account online by visiting the Bank's web portal www.coprbank.com. Customer cansubsequently visit the branch of his choice within 30 days along with the mandatory KYCdocuments to complete the account opening process.
CSR and Empowerment Initiatives:
1. The Corporation Bank Economic Development Foundation a non-profiteconomic outfit Trust has been pursuing its objectives of fulfilling social obligation intune with corporate mission. All CSR activities of the Bank are conducted under the aegisof CBEDF. Financial grants to the extent of `324.34 lakh were disbursed for execution ofvarious projects of social concerns during the year 2017-18 through CBEDF.
2. For the welfare of underprivileged through "CorpKiran"Bank granted `17.09 lakh to various Institutions during 2017-18. The major activitiesincluded providing Bench Desk Cupboards computers water purifier etc. to poor schoolchildren and inmates of orphanages old age homes destitute homes helping physically andmentally challenged people Hopper Tipper for Swachh Bharat Abhiyan.
The Bank has operationalized 7 new branches during the financial year2017-18 and the number of branches stood at 2440 as on 31.03.2018. The Bank has pan Indiapresence covering 26 states and 5 union territories out of 29 states and 7 unionterritories respectively.
Number of ATMs stood 3122 out of which 690 are in Metro 768 are inUrban 977 are in Semi urban and 687 are in Rural. E-Lobbies increased to 345 as on 31stMarch 2018.
Awards and Accolades:
The Bank has taken various encouraging steps towards value additionexpansion and inclusive banking as a result of which your Bank was conferred with thefollowing prestigious awards during 2017-18:-
1. Bank has won "Social Banking Excellence Awards-2017''award under Best Social Bank and Joint runner-up award under Priority Sector Lending forLarge Bank class category for 2017 instituted by The Associated Chambers of Commerce &Industry of India (ASSOCHAM).
2. Bank has bagged "Best SME Lending -2017" award duringFifth ASSOCHAM SMEs Excellence Award 2017 instituted by The Associated Chambers ofCommerce & Industry of India (ASSOCHAM).
3. Bank has bagged "National MSME Excellence Award 2017"organized by the Federation of Industry Trade & Services [FITS].
4. Bank has bagged 2 awards instituted by Chamber of Indian Micro Small& Medium Enterprises [CIMSME] under the following categories: a. Eco-Technology SavvyBank Award Winner [Mid-Sized Category] b. Best MSME Bank Award Runner-up(Mid-Sized Category)
5. Bank has bagged "SKOCH Award for MUDRA - 2017" institutedby SKOCH Group for Financial year 2017-18.
6. The Bank bagged the Rajbhasha Kirti Puraskar instituted byDepartment of Official Language Ministry of Home Affairs Government of India. The Bankwas awarded Second prize under Nationalised Banks category in C' region forexcellent implementation of Official Language policy of the Govt. of India in its officesand branches spread across the country.
7. The Bank was awarded the SKOCH Financial Inclusion Award 2017 andSKOCH Order-Of-Merit Award 2017 for Financial Inclusion instituted by SKOCH Group at the48th SKOCH Summit held in Mumbai on 20th June 2017.
8. The Bank has bagged "SKOCH Award for MUDRA Performance -2017" and "SKOCH Order-of-Merit Award for A Road Map to be Best in InsurancePenetration" instituted by SKOCH Group for Financial year 2017-18.
9. Bank has bagged "National Payments Excellence Awards 2017"winner in Commercial Banks Category B for excellent performance in RuPay Cards forFinancial year 2017-18.
10. Bank has also bagged Investor Relations Society's IR Awards2018 under "Best Expectation Management category.
Before I conclude I take this opportunity to extend my sinceregratitude to all the shareholders for their persistent support for overall development ofthe Bank. I sincerely thank the members of the Board Govt. of India Reserve Bank ofIndia all the regulatory authorities and organisations and Insurance Companies for theirvaluable support and guidance. I thank all our customers for their continued support &patronage and the opportunity given to us to serve them and develop business relationship.I also place on record my appreciation for the employees for their dedication commitmentand contribution towards the growth of the Bank.
The valuable support of all the stakeholders and the confidence theyrepose in the Bank will motivate us to work with renewed vigour to improve the businessperformance. With best wishes
Jai Kumar Garg
Managing Director & CEO
Place : Mangaluru
Date : 02.06.2018