|BSE: N.A.||Sector: N.A.|
|NSE: N.A.||ISIN Code: N.A.|
|BSE 05:30 | 01 Jan|
|NSE 05:30 | 01 Jan|
|BSE: N.A.||Sector: N.A.|
|NSE: N.A.||ISIN Code: N.A.|
|BSE 05:30 | 01 Jan|
|NSE 05:30 | 01 Jan|
I have great pleasure in welcoming you all to the 25thAnnual General Meeting of your Bank and present the Annual Report for the year ended 31stMarch 2019.
Before I present the performance highlights of the Bank I would liketo place before you the general macroeconomic environment within which your Bank hasperformed in FY18-19.
ECONOMY AT A GLANCE
India's GDP growth stood at 5.8% for Q4 FY19 lower than the 6.6%growth witnessed in the previous quarter. Gross Value Addition (GVA) has shown a growth of5.7% in the Jan-Mar 2019 period compared to 6.3% in Q3 FY19. While growth in the servicessector remained comfortable agriculture and industry witnessed a significant slowdown.
Scattered rainfall conditions and slowdown in the rural economy ledfarm growth to witness a steady decline over the course of FY19 falling from a growth of5.1% in Q1 FY19 to a contraction of 0.1% in Q4 FY19. As such agriculture sector growthstood at 2.9% in FY19 as compared to 5.0% in FY18. Going forward dependent upon monsoonconditions this season and initiatives to revive the rural economy agriculture sector isexpected to be a crucial growth driver in the incoming fiscal.
Growth in Industry stood at 3.4% in Q4 FY19 compared to 6.0% in Q3 FY19led by a slowdown in manufacturing and electricity sectors. In the Services sector growthwas led by Financial and Real-estate sector (9.5% in Q4 vis--vis 7.2% in Q3) as well asgovernment related services (10.7% in Q4 vis--vis 7.5% in Q3). Overall service sectorgrowth remained steady at 7.7% in FY19 compared to 7.8% in FY18.
India's Consumer Price-based inflation for April 2019 stoodat2.92% compared to 2.86% for March 2019. Core CPI decelerated to 4.54% in April 2019 from4.99% in March 2019. Wholesale Price inflation (WPI) stood at 3.07% for Apr-19 compared to3.18% in Mar- 19despitesignificant momentum in the prices of primary articles due to afavourable base.
Asset quality showed improvement with Scheduled Commercial Banks'gross non-performing assets (GNPA) ratio declining from 11.5% in March 2018 to 10.8% inSeptember 2018. Their net non-performing assets (NNPA) ratio also registered a declineduring the period. Now I would like to present before you the business highlights of theBank for the FY18-19:-
Business Mix as on March-19 stood at Rs. 4.04 lac crore asagainst Rs. 3.55 lac crore as on March-18. Total Deposits and Advances stood at Rs. 2.32lac crore and Rs.1.71 lac crore respectively. CASA deposits have increased from Rs 65697crore in March-18 to Rs 68387 crore in March-19.
Bank bounced back to quarterly profits in September 2018 and hassince shown net profits for three consecutive quarters. The Bank has also bounced back toannual profits after 2 years of consecutive annual losses.
The Operating Profits stood at Rs. 3754 crore and Net Profitstood at Rs. 55 crore for FY 19. Business per Employee was Rs.18.6 crore Business perBranch was 169.12 crore and Book value per share of the bank was Rs.100.99 as of March2019.
Bank advance has increased by 15.75% on y-o-y basis while theCredit Risk Weighted Assets have increased by 0.96% only due to capital optimized growth.The Credit risk weighted assets to gross advance declined to 57.59% in March 2019 comparedto 63% in March 2018 reflecting bank's focus on optimizing risk efficiency.
During FY19 Bank's retail portfolio grew by 41.62% andMSME Advances by 12.63% Y-o-Y while RAM (Retail Agriculture and MSME) accounted for54.94% of Bank's total advances as on 31st March 2019 (excluding IBPC).
Digital Banking Transactions increased from 63% in FY18 to 73%in FY19.
A separate Stressed Assets Management Vertical has been createdat Corporate Office and Six General Managers have been posted in the field with exclusivemandate of focusing on Recovery.
As a result of the continuous thrust on recovery and variousefforts made in the direction the Bank made cash recovery and upgradation of Rs 6597crore in FY 19 as against Rs 3161 crore in FY 2018 while recovery in Technically WrittenOff/Recorded Interest accounts amounted to Rs 1572 crore as against Rs 363 crore in FY2017-18.
Flesh Slippages reduced by 43% to Rs 7066 crore during FY2018-19 as compared to Rs.12429 crore during FY 2017-18. Provision Coverage Ratio of theBank improved to 75.84% as on 31st March 2019 from 64.07% as on 31stMarch 2018. The Gross NPA of the Bank significantly reduced from 17.63% as on March 2018to 12.66% as on March 2019 while Net NPA also reduced to 5.93% as at March 2019 from10.48% as at March 2018.
Capital Adequacy of the Bank stood at 12.73% as at March 2019with Tier-1 Ratio being 9.98%.
During FY 2018-19 Bank received capital infusion from theGovernment of India aggregating to Rs.6686 crore in two tranches. Also the Bank was ableto raise capital of Rs.250 crore by way of allotment of shares to employees underOBC-Employee Share Purchase Scheme. The shareholding of Government of India increased from77.23% as on 31st March 2018 to 87.58% as on 31st March 2019.
During FY 19 the Bank redeemed 8.75% Upper Tier II Bondsaggregating to र500.00 Crore upon exercise of Call Option with the priorapproval of RBI.
MAJOR DEVELOPMENTS IN FY 19
The restrictions imposed on the Bank by RBI under the PCAframework were lifted on 31st January 2019 in view of its improved performanceand the Bank meeting the benchmark levels as per the PCA framework.
Digital Processing of Mudra Loans under Rule basedProcessing' was introduced along with MSME loan delivery through PSB 59
During the year the Bank was recognized amongst the 500valuable Banking Brands 2018 by Brand Finance Best Performing Bank under Atal PensionYojana by PFRDA 2nd runner up Bank Demat A/Cs in PSB category by NSDL and 2ndrunner up in IBA Technology Award.
The Bank performed exceedingly well under various parameters ofEASE Index of the PSB Reform Agenda of Govt. of India.
In terms of the EASE Index Ranking of the PSB Reform Agenda of Govt. ofIndia for March 2019 Bank occupied 1st position amongst mid-sized PublicSector Banks and 4th among 19 PSBs. Besides the Bank was also awarded for itsperformance with respect to Responsible Banking & Udyami Mitra forMSMEs' under the EASE Parameters.
The Govt. of India appreciated the Bank's VerticalizedOrganizational Structure and the Grievance Redressal System and recognized the Bank as aresource bank for other Public Sector Banks to follow.
The Bank has state of the art infrastructure for imparting training inits six HRDIs where the focus is on learning through case studies and presentations. Apartfrom same the employees are sent for training to reputed management organizations likeInstitute for Development and Research in Banking Technology Hyderabad NationalInstitute of Banking and Finance (NIBM) National Institute of Banking Studies andCorporate Management (NIBSCOM) Southern India Banks' Staff Training CollegeBangalore (SIBSTC). During FY 2018-19 79843 Training Man-days were completed in the Bank.
FINANCIAL INCLUSION PROGRAMME
The Bank takes the Financial Inclusion programs as business opportunityand leverages this to increase and diversify its customer base. Since the launch ofPradhan Mantri Jan-Dhan Yojna in August 2014 the Bank has opened 48.83 lakhs suchaccounts which have aggregate deposits of Rs 4012.74 crore. Under Pradhan Mantri MudraYojna the Bank has sanctioned 121327 accounts and has disbursed Rs. 2990.20 crore in FY2018-19. The Bank has done 45.52 lakh enrolments in Pradhan Mantri Suraksha Bima Yojna andPradhan Mantri Jeevan Jyoti Bima Yojna.
During current FY 2019-20 the main focus shall be on Profitmaximization through optimized business mix and continued emphasis on Retail / MSMEportfolio as drivers for business growth. The Bank shall continue to make efforts towardsmaintaining the momentum of recovery in NPA accounts while simultaneously monitoring theasset quality to contain further slippages. The Bank is expecting resolutions in theaccounts where NCLT cases were filed during last FY.
Bank's strategic vision is to be National Bank for Retail and MSMEwith focus on RAM & Mid Corporate segment and to become a model mid-sized PSB.Adopting a customer centric approach would be the core driver for achieving qualitativegrowth with increased operational efficiency.
The Bank shall continue to leverage Digital Banking Platforms to meetthe requirements of millennial and new age customers and for enhancing overallcustomers' experience.
The Bank shall strive to maintain the key parameters above thebenchmark levels stipulated by RBI under the Monitorable Action Plan' of RBI.
I would like to take this opportunity to welcome Sh Vijay Dube ShBalakrishna Alse S. (Executive Directors) and Sh S.M. N. Swamy (RBI Nominee Director) whojoined the Board of the Bank. I also appreciate the contribution of Sh Himanshu Joshi(Executive Director) Smt. Mala Srivastava (Part Time Non-Official Director) and S GaneshKumar (RBI Nominee Director) who laid down office for their valuable contribution to theBank.
On behalf of all the Board of Directors and on my own behalf I conveymy sincere gratitude and thanks to the Shareholders of the Bank for reposing their faithin the Management and Bank. I would like to use this occasion to thank every employee ofOBC for their sincerity & dedication and our customers for their continuous loyaltyand patronage. My sincere thanks and regards to the Ministry of Finance Govt. of Indiaand Reserve Bank of India for their continued guidance and support. I solicit yourcontinued cooperation and encouragement in future also.
Mukesh Kumar Jain
Managing Director & Chief Executive Officer