I am happy to welcome you all to the Annual General Meeting and like to share with youmy thoughts and perceptions on the macro economic scenario prevailing amidst which yourbank has progressed during the year 2012-13.
From a macro perspective, the year that went by was hardly encouraging for the globalas well as Indian economies. Across the spectrum, growth was subdued, risks were on theascent and recovery was too slow for comfort. Global growth projected for the year 2013 bythe IMF is around 3% which remains unchanged when compared with the performance in theprevious year. The key reasons for the economic fragility are the poor performance of theEmerging Market Economies, growing recession in the Euro Zone and fiscal tighteningmeasures in US. The forecast for the year 2014 (3.8%) does not inspire much confidence inthe light of certain structural weaknesses continuing to haunt the global economy.
Indian economy too was affected by the global developments and the year ended with theGDP at a decadal low of 5%. The poor performance stemmed from growing fiscal imbalances,crippling infrastructure bottlenecks, sluggish demand, supply side constraints, volatileequity markets, rising inflation and a weak rupee. As a result, the investment climatestood seriously affected. The banking sector whose fortunes are intertwined with theeconomy also went through a difficult phase. The prognosis for the economy for the currentyear is not very promising though a bountiful monsoon, fast tracking of large infraprojects and other reform measures to boost FDI inflow could help turn the tide in themonths to come.
Against the above backdrop, your Bank managed to acquit itself fairly well judging fromthe heavy odds stacked against it. It successfully emerged out of the huge losses incurredin 2011-12 through careful planning and meticulous execution. The change in the businessmodel and a revision in the organization structure paved the way for notable improvementsin key areas viz. improvement in the net interest income, reduction in operationalexpenses across the board, faster NPA recoveries and confidence building among theworkforce. The challenge was daunting but, gratifyingly, the response was measured andadequate. The trade unions played a positive role in facilitating the transition. Ishould, however, add a note of caution: while the progress was noteworthy, we still haveto cover considerable ground to fully emerge out of the shadows.
Your Bank has a great history of over 85 years. Often perceiving challenges asopportunities, it has weathered many a storm during this long journey and consequentlybuilt a reputation for bouncing back from the difficulties on each occasion with grit anddetermination. The year 2012-13 saw the Bank script a saga of revival imbued with apositive outlook, a strong sense of purpose and unfailing commitment. Even amidst an arrayof constraints, the Bank could mobilize capital of over Rs. 100 crores to facilitatefuture business expansion. The Bank is fully back on track and stands on the threshold ofa new era geared to battle challenges of the market place with renewed vigour andconfidence. Powered by a resurgent workforce and state of the art technology, it hasequipped itself to harness the exciting possibilities of the future in right time and inthe right manner. While retail banking will be the mantra for future, the Bank wouldstrive to continually provide a better value proposition to its constituents. The Board ofthe Bank is committed to ensure that these developmental endeavours are carried to theirlogical conclusion.
You have extended unstinted support to the Bank through tough and difficult times.Going forward, this support would become crucial as the Bank navigates through a fiercelycompetitive landscape. I have no doubt that, with your continued backing and guidance, theBank will deliver much better results in the current year, and grow from strength tostrength.
Thanking you and with best regards,
Tekkar Yashwanth Prabhu