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Indian Bank.

BSE: 532814 Sector: Financials
NSE: INDIANB ISIN Code: INE562A01011
BSE 00:00 | 16 Jul 321.30 -13.20
(-3.95%)
OPEN

330.00

HIGH

334.05

LOW

318.05

NSE 00:00 | 16 Jul 322.85 -11.90
(-3.55%)
OPEN

336.25

HIGH

336.25

LOW

317.90

OPEN 330.00
PREVIOUS CLOSE 334.50
VOLUME 69489
52-Week high 428.00
52-Week low 254.00
P/E 12.24
Mkt Cap.(Rs cr) 15,432
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 330.00
CLOSE 334.50
VOLUME 69489
52-Week high 428.00
52-Week low 254.00
P/E 12.24
Mkt Cap.(Rs cr) 15,432
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Indian Bank. (INDIANB) - Chairman Speech

Company chairman speech

Dear Shareholders

On behalf of the Board of Directors it gives me immense pleasure to place before youthe highlights of your Bank's performance during the Financial Year 2017-18.

Details of the achievements and initiatives taken by your Bank are provided in theenclosed Annual Report for the year.

Given the challenging circumstances during 2017-18 and the Banking industry undergoinga radical transformation I am grateful to our valued customers who have continued torepose their trust in us. I am very happy to report that your Bank has emerged as one ofthe very few profitable Public Sector Banks in the year gone by and has been continuouslyperforming better than its peers in various parameters and has improved its market sharein both the deposits and Advances. I once again acknowledge your continued support in ourjourney towards being the best Public Sector Bank in the country.

Economic Overview – Global

Global economy is experiencing a most broad-based recovery since 2010. In 2017 roughlythree-quarters of countries experienced improvements in their growth rates the highestshare since 2010. The latest World Economic Outlook (WEO) of the IMF shows global GDPgrowth accelerated to around 3.6 percent in 2017 from 3.2 percent in 2016. The strongermomentum experienced in 2017 is expected to carry into 2018 and 2019 with global growthrevised up to 3.9 percent for both years (0.2 percentage point higher relative to the fallforecasts).

The growth forecast for the United States has been revised up given stronger thanexpected activity in 2017 higher projected external demand and the expectedmacroeconomic impact of the tax reform in particular the reduction in corporate tax ratesand the temporary allowance for full expensing of investment. Growth rates for many of theeuro area economies have been marked up especially for Germany Italy and theNetherlands reflecting the stronger momentum in domestic demand and higher externaldemand. The growth forecast for 2018 and 2019 has also been revised up for other advancedeconomies reflecting in particular stronger growth in advanced Asian economies which areespecially sensitive to the outlook for global trade and investment.

Protectionist policy adopted by USA and China and rising crude oil prices to the globaleconomy pose a major challenge to the growth forecast including India. Renewed fears ofprotectionism retaliatory actions and trade wars pose a major challenge to the globaleconomy with implications for emerging market economies (EMEs) including India that areparticipating in open international trade and relying on foreign capital flows to realisetheir developmental aspirations.

Economic Overview – Domestic

Introduction of GST significant steps being undertaken towards resolution of problemsassociated with non-performing assets of the banks further liberalization of FDI etc.strengthens the momentum of reforms. India jumped thirty places to break into the top 100for the first time in the World Bank's Ease of Doing Business Report (EODB) 2018. Therankings reflect the Government's reform measures on a wide range of indicators.

As per the provisional estimates of Annual National Income 2017-18 released by CentralStatistics Office the growth in GDP (constant prices) for 2017-18 is 6.7 per cent ascompared to the growth rate of 7.1 per cent in 2016-17.

The outlook for 2018-19 will be determined by economic policy in the run-up to the nextnational election. Controlling macroeconomic stability and stabilisation of ongoingreforms speedy Resolution of stressed assets and recapitalisation process and impact ofrising crude oil prices will be the key factors which will shape the economic developmentin the forthcoming year.

Performance of the Banking sector:

The Indian banking industry continued to face challenging times during the year due tothe rising NPAs in balance sheets of Public Sector Banks. Decisive action was taken totackle the Twin Balance Sheet (TBS) challenges. The new Indian Bankruptcy Code (IBC) hasprovided a resolution framework that will help Corporates clean up their balance sheetsand reduce their debts.

The Government of India announced a large recapitalization package (about 1.2 per centof GDP) to strengthen the balance sheets of the public sector banks (PSBs). Largedistressed borrowers are being referenced for resolution under the Insolvency andBankruptcy Code (IBC). This is expected to improve credit flows further and create demandfor fresh investment.

Asset quality pressures have remained elevated during FY 2017-18 due to tepid growth inthe economy and low capex demand.

Your Bank was the only Public Sector Bank which has not been recapitalised and has beenacknowledged as a sound Public sector Bank by the Hon'ble Finance Minister of India.

Bank was able to grow its Advances sizeably and in turn the Market share of bothDeposits andAdvances consequently.

Specialised branches catering to the need of Home loans MSME etc. were opened toextend focused attention for end to end solution with reduced turnaround time.

Bank was also able to surpass all National goals set under Priority sector lending foreach category viz Level of 47.08 per cent (Mandatory 40 per cent) under Priority SectorAdvances 20.91 per cent (18 per cent) in Agriculture 12.58 per cent (10 per cent) forAdvances to weaker sections and 7.87 per cent (7.50 per cent) in lending to MicroEnterprises under MSME.

Bank's Business and FinancialAchievements:

Against this backdrop I would like to give an overview of the Bank's performance inimportant parameters.

• Bank's Business grew by 17.91 per cent to Rs. 371020/-crore as on 31st March2018. While Deposits grew by Rs. 25785 crore or 14.13 per cent to Rs. 208294 croreAdvances grew by 23.14 per cent and stood at Rs. 162726/- crore.

• Operating Profit of the Bank for FY 2017-18 was at Rs. 5000.99 crore while NetProfit stood at Rs. 1258.99 crore.

Net worth of the Bank increased to Rs. 15826.98 crore as on 31st March 2018.

• Earnings per share for FY 2017-18 and Book value per share were at Rs. 26.21 andRs. 329.53 respectively. Return on Equity was at 8.27 per cent for FY 2017-18.

Bank's financial soundness as reflected by the CRAR (Capital to RiskWeighted Assets Ratio) was strong at 12.55 per cent under Basel III as on 31st March 2018.

Way Forward:

As per RBI's Annual Policy statement economic activity is expected to gather pace in2018-19 benefitting from a conducive domestic and global environment.

The teething troubles relating to implementation of the GST are receding and creditoff-take has improved in the recent period and is becoming increasingly broad based whichaugurs well for the manufacturing sector and new investment activity.

With the formalisation of GST recapitalisation of public sector banks and resolutionof distressed assets under the Insolvency and Bankruptcy Code (IBC) the business andinvestment environment is expected to improve. With the Government of India's thrust onrural and infrastructure sectors the demand is expected to increase in rural areas andalso boost the private investment.

Acknowledgements:

I would like to place on record the unstinted support and guidance from our valuedcustomers without which our sustained quest for excellence would not have yielded theresults which Bank achieved. I would also like to acknowledge the support of all otherstakeholders and I am grateful to each one of them for their continued cooperation. I wishto sincerely thank all our valuable shareholders once again for their continuedconfidence in your Bank.

I would also like to take this opportunity to express my sincere appreciation for thededicated and commendable efforts of the entire work force of the Bank considering thechallenging external environment in which your Bank operated.

We look forward to your continued support and patronage as your Bank embarks on itsjourney of making the Bank from Good to Great.

With best wishes

Yours sincerely

T C VENKAT SUBRAMANIAN

NON-EXECUTIVE CHAIRMAN