The financial year 2017 had a mixed array of events domestically as well asinternationally. While significant geopolitical events unfolded such as the Presidentialelection of Mr. Donald Trump in the United states Brexit in U.K. etc. the globaleconomic growth remained stagnant on the back of low commodity prices Federal Reserve'sindications of raising interest rates in the Us etc.with downside risks on globaleconomic growth not abating during major part of the year. However there wereexpectations of moderation in growth in the later part of the year due to rise incommodity prices and indications of revival in global trade.
Domestically Indian economy showed resilience in the first half of the fiscal year2017 weathering global headwinds. economic growth was supported by good monsoon andbetter crop production and the expansion in consumption due to payouts on account of theSeventh Pay Commission.
The year was marked by several economically significant initiatives taken by thegovernment as part of economic reforms which included demonetisation of Rs 500 and Rs 1000notes to clean up the system and rid the economy of black money formation of MonetaryPolicy Committee (MPC) with responsibility for monetary policy decision making changes inFDI policy regime by allowing large number of sectors on automatic route for FDI passageof Goods and services Tax Act (GsT) enactment of the Insolvency and Bankruptcy Code toprovide a faster and decisive process of recovery of non-performing loans of companiesthat are unable to meet their obligations to lenders promoting rapid adoption of digitalpayments processes with Unified Payment Interface (UPI) and launching of Bharat Interfacefor Money (BHIM) Bharat
Bill Payment System etc.
The Indian Banking Industry faced challenging times during the year on account ofrising NPAs due to prolonged slowdown in the broader economy declining demand leading tolow capacity utilisation and on some legacy issues in infrastructure sector. The creditdemand remained depressed. As a result preservation of asset quality took precedence anda cautious approach towards growth was adopted by most of the Banks.
In this context your Bank's performance during the year especially in terms of profitand margins showed an upward trend. During the year under report the total business ofyour Bank reached to a level of Rs 95135 Cr from a level of Rs 89555 Cr for FY 16.Aggregate business was driven by a 7.23% growth in gross deposits and 4.96% growth ingross advances over the previous year. CAsA recorded a growth rate of 27.52% over theprevious year and stood at 27.72% of total deposits.
Your Bank crossed Rs 1500 cr mark in operating profit andRs 600 cr mark in net profitfor the first time.The key ratio indicators for FY 17 improved substantially with Cost ofDeposits decreasing to 6.60% from 7.40% in the previous fiscal Cost to income ratiodecreasing to 44.99% from 47.63% in the previous fiscalspread rising to 3.10% from 2.71%in the previous fiscal and NIM improving to 3.70% from 3.43%. ROA remainedflatat 1.00%compared to 1.03% in the previous year.
Your Bank took earnest efforts to rebalance the asset portfolio on the sound principlesof risk distribution by focussing on MsMe/commercial and retail segments and following aselective approach for Corporate segment continuing the consolidation process.
Your Bank has improved its footprints pan India to 711 branches and 1747 ATMs as on31.03.2017. Your Bank also had 444 cash recyclers which functioned as cash depositmachines as well as ATMs. The banking industry is going digital at a rapid pace with banksrolling out several digital initiatives. Your Bank has also been in the forefront inmoving on to digital platform with the objectives of customer convenience strengtheninginternal processes and leveraging technology for data analytics. Your Bank introduced UPIa new mobile application initiative by NPCI which aims to simplify payments by enablingboth sender and receiver to initiate payments in a secured manner. National electronicToll Collection (NeTC) FAsTAG is a secure and interoperable solution for NHAI tollcollection and the electronic tags will reduce wait time at toll gates on nationalhighways reduce fuel consumption and cash handling considerably. Your Bank is one of thefive banks identified by NHAI and NPCI for this initiative and only Bank from South Indiaoffering this facility.
Your bank continued to receive multiple recognitions from media houses analysts andindependent bodies. Your Bank got two awards from IDBRT for the Best Bank among smallBanks for Digital Banking and Managing IT ecosystems 2015-16 Business Today KPMG award ofBest small Bank for 2015-16 and Businessworld-PWC Best small Bank Runner-up award for2015-16.
We will continue to focus on our aim of Growth with strength and Profit' in thecurrent year also. We have committed ourselves to bring the best standards in the industryand have been constantly striving to achieve the set goals.
With this I place on record my sincere gratitude for all your valuable support andpatronage. I would like to assure you that the Bank has been built up to remainfocussed on high standards of banking services to the nation.
|With warm greetings |
|K Venkataraman |
|MD & CeO |