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Indian Bank.

BSE: 532814 Sector: Financials
BSE 00:00 | 24 Feb 80.35 -3.00






NSE 00:00 | 24 Feb 80.35 -3.05






OPEN 82.70
VOLUME 38998
52-Week high 292.35
52-Week low 78.00
P/E 6.26
Mkt Cap.(Rs cr) 4,892
Buy Price 79.75
Buy Qty 100.00
Sell Price 80.35
Sell Qty 22.00
OPEN 82.70
CLOSE 83.35
VOLUME 38998
52-Week high 292.35
52-Week low 78.00
P/E 6.26
Mkt Cap.(Rs cr) 4,892
Buy Price 79.75
Buy Qty 100.00
Sell Price 80.35
Sell Qty 22.00

Indian Bank. (INDIANB) - Chairman Speech

Company chairman speech


Managing Director & Chief Executive Officer

Dear Shareholders

On my personal behalf and on behalf of Board of Directors and employeesof the Bank it is my pleasure to place the highlights of your Bank's performance duringFY 2018-19 before you. The Annual Report for the Financial Year ended 31st March 2019details the achievements made and initiatives taken by your Bank.

Before we get to the financials let me briefly dwell on macroeconomicscenario.

Economic overview – Global Economy:

Global economic activity has slowed down in the second half of 2018reflecting a confluence of factors affecting major economies.

There has been subdued performance in United States in the finalquarter of 2018 which continued in Q1 of 2019 also on account of declining factoryactivity. China's growth declined following a combination of needed regulatory tighteningto rein in shadow banking and an increase in trade tensions with the United States. TheEuro area economy lost more momentum than expected as consumer and business confidenceweakened and car production in Germany was disrupted by the introduction of new emissionstandards; investment dropped in Italy as sovereign spreads widened; and external demandespecially from emergingAsia softened.

Indian Economy:

Under Ease of Doing Business Country's rank improved by 23 Positionsto 77th rank among 190 countries assessed by the World Bank in 2017.

With declaration of Elections results the uncertainties surroundingthe next Government has been put to rest. The strong mandate for the current Governmentfor the second successive 5 year term would ensure a continuity in policy and reformspave the way for commencement of investment decisions and inflows. This in turn wouldaugur well for the domestic economy as there are increased expectations of its revival.

However there are challenges both internal and external which posepotential threats to revival of the domestic economy. Uncertainties in trade together withpolitical tensions rising crude oil prices and slowdown in global economic momentumremain concerns from the outside. On the domestic front lower than expected normalmonsoons muted domestic consumption and investments slow growth in job creation andliquidity pressures in the domestic NBFCs segment have the potential to affect the overallgrowth in economic activity.

In view of the above challenges and risks which confront the country asudden and significant spurt in economic activity and investments may be difficultimmediately. On the global front expectation of opportunities which would be beneficialto the country is expected to take some time to materialize. Going forward growth wouldbe gradual over a period of time which could set the trend for an improved performance infuture.

Banking Sector:

The banking sector passed through a phase of liquidity deficit for mostof the year. While deposits grew by 9.2% as of March 1st 2019 as compared to 6% overend-March 2018 growth in credit was higher at 14.6% as against 10.6% during the saidperiods.

RBI increased the repo rate from 6% to 6.5% in two tranches of 25 bpseach and then lowered the rate in the February 2019 monetary policy to 6.25% and to 6.00%in theApril 2019 policy.

Bank's performance - YE March 2019

Against this backdrop I would like to present a snapshot of the Bank'sperformance in key parameters


Bank's business crossed the milestone figure of `4 trillion to reach`429972 Cr with a robust growth of 15.89%. Within which Deposits grew by `33782 Cr(16.22%) to `242076 Cr andAdvances by `25170 Cr (15.47%) to `187896 Cr.


• Operating Profit was at `4880.62 Cr while Net Profit was at`321.95 Cr. The profitability was subdued on account of reduced profit from sale ofInvestments and higher provisions on NPAs on account of increased slippages andDepreciation on Investments.

• Your Bank is one of the very few profit making PSBs during FY2018-19 with Return onAssets (ROA) of 0.12%.

Growth in CASA:

• The share of low-cost Current & Savings deposits (CASADomestic) in Total Deposits at 35.48% enabled the Bank to record a growth of 9.16%(y-o-y) to touch `83459.20 Cr. Adverse market conditions viz. withdrawal of Governmentdeposits migration of money into mutual funds and higher attractive interest rate offeredon small savings schemes however mellowed down the growth.

Diversified Loan Book:

• Growth in advances was broad based across all the sectors drivenby robust growth in Agriculture (25%). Other sectors Retail (13%) and MSME (15%) alsoposted healthy increase. With Corporate growing at 12% the Loan Book was well diversifiedwith RAM Sector constituting 58%.

• 18 Ind MSME Branches (catering exclusively to MSMEs) 76Specialized MSME Branches (with more than 60% of advances to MSMEs) & 500 MSME focusbranches garnered business under this sector.

• During the year Bank's exposure to Micro Small & MediumEnterprises grew by 14.53% with exposure to Small Enterprises growing 25.69%.

• MUDRA loans of `3103 Cr was extended to around 1.50 lakhbeneficiaries by the Bank including its Regional Rural Banks.

• 3692 MSMEs benefitted under Stand up India Scheme to the tune of`783.31 Cr over a period of three years.

• 27 cluster specific schemes have been approved across thecountry for giving a fillip to MSME sector.

Contribution from core geographies:

• Bank's core geographies viz. 5 Southern States & UT ofPuducherry contributed significantly towards business and infrastructure set up:

• 57% of Bank's Business {Deposits - 52% & Advances –64%}

• 66% of CASA portfolio 70% of Retail Credit and 79% of PrioritySector lending.

• CD ratio at 93% as against overall Bank CD ratio of 77%.

• 52% of branch network are in Rural and Semi Urban centres and84% of BCs & 70% of ATMs and BNAs are at the aforementioned States/UT

Mandatory targets surpassed:

3 Priority Sector Advances (`66847.36 Cr) as a percentage of AdjustedNet Bank Credit (ANBC) was 41.93% as against regulatory target of 40% with Agriculturelending (`31747.Cr) at 19.91% as against the target of 18%.

Enablers driving RAM business:

• Centralized processing units (CPUs) exclusively for processingMSME loans were operationalised in 8 centers during the Year and 24 Ind Retail processingCentres (IRPCs) functioning across India are driving growth of MSME/Retail loans.

• Bank is onboarded in three TReDS platform for discounting ofBills of MSME units.

Forerunner in lending to SHGs;

• 39 specialized Microsate branches deliver exclusive andspecialized attention towards SHGs. The portfolio size of SHG increased by `697.91 Crduring FY 2018-19 to touch `4733.41 Cr. Bank has been bagging the Best Bank award for 10consecutive years "in SHG Bank linkage Programme" from Govt of Tamil Nadu.

Expanding Bank's foot print:

• Towards enhancing its pan-India network and to extend its reachto the under-banked and unbanked areas 91 branches were opened during the year to touch9786 touch points including 2872 Brick & Mortar branches and 3892ATMs/BNAs and 3022Business Correspondents.

• Bank has international presence in Singapore and Colombo &Jaffna in Sri Lanka. Both these Centres are Profit making and Bank has focused on furtherbusiness improvement at these Centres.

Financial Inclusion initiatives:

Your Bank has been a forerunner in supporting the Government of India'sNational Mission for Financial Inclusion Pradhan Mantri Jan-Dhan Yojana (PMJDY). Bank'sperformance has been exemplary since its launch as the following facts indicate:

• 37.78 lakh BSBD accounts opened since inception of the scheme.

• Average monthly transaction done per each Business Correspondent(BCs) is more than 1000 - Highest in the Industry in terms of number of transactions.

• Enrolled 10 Lakh customers under PMJJBY & 22 Lakh customersunder PMSBY customers since the launch of the scheme.

• Sourced more than 5.8 lakh APY subscribers since the launch ofthe scheme in 2015. During the current fiscal your Bank sourced 2.3 lakh subscribersagainst the annual target of 1.62 lakh given by PFRDA.

Social Responsiveness

• Bank as a responsible Corporate Citizen reached out to the needyand marginalized population through various contributions:

Clean India Movement: Donated automatic napkin vendingmachines and incinerators to Government schools/ colleges and hostels for women in TamilNadu.

Women Empowerment: Sponsored Event "Parampara"organized by Parichay Foundation on 2nd September 2018 at Delhi.

Inclusive Growth: Extended sponsorship for constructing1800 ft road under CSR from Village Maujdin to Government Primary school Madhao SinghanaSirsa Haryana.

• Donated `24 lakhs towards construction of National Academy ofRUDSETI (NAR) Building at Bengaluru for Skill Development under CSR.

Green Initiative: Contributed `9 lakhs for Green VelloreProject of VIT Vellore

Robust capital structure:

• Following the first tranche of capital infusion i.e. `88139 Crin FY 2017-18 to PSBs by Government of India a second tranche of `1.06 lakh Cr wasprovided in FY 2018-19. I feel proud to inform that your Bank was the only PSB which didnot require Government's capital assistance as it has been self sustaining in terms ofCapital by continuous plough back of internal accruals.

• With CRAR at 13.21% under Basel III as at the end of March2019 Bank is adequately capitalized.

• Bank has raised capital of `294.35 Cr in May 2019 throughEmployees Stock Purchase Scheme (ESPS) and there are plans to tap the market at theappropriate time during FY 2019-20 to raise Capital for the growth plans and also to bringdown the stake of Government of India below 75% as per regulatory guidelines for whichnear approval from esteemed Shareholders are available.

• Market Capitalisation of the Bank was at `13446 Cr.

Controlled asset quality:

• Gross NPAs to Gross Advances Ratio and Net NPAs to Net AdvancesRatio reduced to 7.11% and 3.75% respectively from 7.37% and 3.81% respectively as on 31stMarch 2018. Stressed Assets Ratio too reduced from 8.65% as on 31.03.2018 to 8.50% as on31.03.2019.

Leveraging Technology

• Bank has continued to invest in modernising its infrastructurewith focus on improving efficiency in delivering services through digital channels.

Top performing Bank for multiple scheme payments underPublic Financial Management System (PFMS).

Four fold increase in Mobile banking transactions.

nd and 5th among all banks in ATM

2 highest among PSBs transactions.

Highest Rupay Platinum card issuer among all banks.

New initiatives:

Tamil Nadu Grama Bank exclusive Regional Rural Bank forthe State commenced operations on 1st April 2019 with 630 branches and Business of morethan `22500 Cr after successful amalgamation of Pandyan Grama Bank of Indian OverseasBank with Bank's Pallavan Grama Bank.

• Successfully implemented the newly launched PM-Kisan Scheme ofGovernment of India as a sole Banker for Tamil Nadu and Puducherry.

• Online opening of Savings Bank Account enabled through Bank'swebsite/MobileApp usingAadhaar Based OTP.

• Bank's Mobile APP (IndPAY) is now available in 5 languages (viz.English Tamil Malayalam Hindi and Marathi) for customer convenience.

• Bank's Website revamped with a new look and feel as per thecurrent industry standards.

• New look Internet Banking website launched with value addedfeatures.

Awards andAccolades

Bank was bestowed with a number of awards and I am glad to sharedetails of few of them:

"Best performing PSB underAPY 2017-18" - PFRDA

"Best Performance – Financial Literacy -2018-19" –NABARD

"Best Bank in SHG Bank linkage Programme" for2017-18 from Govt of Tamil Nadu. Bank has bagged this award for 10 consecutiveyears.

"National Award for Best Performance in SHG Bank Linkages 2017-18 Public Sector Banks

(Small Category)" by National Rural Livelihoods MissionMinistry of Rural Development Government of India.

"Best Financial Inclusion Initiatives – Runnerup" –Indian BanksAssociation (IBA).

ASSOCHAM - Social Banking Excellence Award 2018 -Winnerin Agricultural Banking Priority Sector Lending Technology & Overall Best SocialBank.

• Government of India's "Rajbhasha Kirti Puraskar"for 'Outstanding Performance in implementation of Official Language' during the year2017-18.

"Best Public Sector Bank" Banking Excellence Award2018 - By State Forum of Banker's Clubs Kerala.

The path ahead:

With the formation of stable Government at the centre continuation ofreforms higher financial flows to the commercial sector reviving economic activity thereis likely to be enough impetus for accelerating growth in the FY 2019-20. Further thecleaning up of Balance Sheet of PSBs through the process of recapitalisation of PublicSector Banks and resolution of stressed assets under the Insolvency and Bankruptcy Code(IBC) would improve the business and investment environment which in turn will aidrobust growth in banking sector as the credit needs of the economy are inter twined.

Government's overarching framework for reforms agenda is

"Responsive and Responsible PSBs" aimed at EASE-Enhanced Access and Service Excellence which together with Recapitalization of PSBsis aimed at strengthening PSBs increasing lending to MSMEs and making it easier for MSMEsand retail customers to transact as well as significantly increase access to bankingservices.

On the other hand the domestic economy may face headwinds due toslowdown in global growth volatility in international crude oil prices and sluggishprivate investments.

Bank's strategy for FY 2019-20 will be concentrated on growth withprofitability.

The prime focus would be on increasing CASA curtailing costincreasing revenue other than from interest accelerating recovery in respect of impairedassets and containing the level of NPA. In the process growth in business would culminateinto improving the bottom line of the Bank.

The focus would also be on offering efficient and excellent customerservice with frequent employee customer connects and educating customers on the use ofdigital banking to give them great ease and convenience.

The Management team is confident that our collective effort andteamwork along with your continuous patronage trust and encouragement will help us tosurpass the expectations of all the stakeholders in the year ahead.


I would like to take this opportunity to thank all members of the Boardfor their valuable support guidance and inputs to the Management during the course ofthis year's journey. I would also like to acknowledge the unstinted support of our loyalcustomers and express my sincere appreciation for the untiring efforts of the dedicatedand devoted work force of the Bank who performed exceedingly well in a turbulent bankingenvironment.

I also wish to sincerely thank each one of our valuable shareholdersand other stakeholders for their continued confidence and support to the bank in all itsendeavours.

We would continue to look forward to your support goodwill andpatronage.

With best wishes

Yours sincerely