The year 2002-2003 has turned out to be a truly remarkable year for the Bank

• Net Profit up by 106.94% to Rs. 165.99 crores
   
• Highest ever Net Profit recorded by the Bank
   
• Highest ever reduction of 4.01% in NPA registered in a single year
    
• Over 51% provision held against NPA
   
• Retail Credit spurts by over 100% during the year to account for 15% of total non-food credit
    
• Significant growth registered under major parameters related to profitability, net worth and capital adequacy

Profitability

The Bank made a NET PROFIT of Rs. 165.99 crores during the year 2002-03 as against Rs. 80.21 crores in the previous year, registering a growth of 106.94%  

The Bank's net profit in the 4th quarter (Q4) of 2002-03 was Rs. 55.73 crore as against Rs. 41.59 crores during the corresponding period in the last year, showing an increase of 34%.

The operating profit of the Bank during the year rose to Rs.515.83 crores from Rs. 407.98 crores in the previous year, registering a growth of 26.24%.

Interest Income increased to Rs. 2570.33 crores in the year 2002-03 from Rs. 2272.84 crores in the last year, reflecting growth rate of 13.09%.

Earnings from Retail Credit dispensed through Retail Banking Boutiques, the exclusive delivery channels, increased to Rs. 175 crores during the year from Rs. 96 crores in the previous year. The growth rate was 82%

Spread as percentage to average working funds improved to 2.94% against 2.93% in the previous year.

The Directors have proposed a dividend of 10%

On annualised basis proposed Dividend works out to 28% as the shares were allotted in November 2002 but the dividend is being paid for the whole year (not on pro-rata basis).

Net Worth

• Net Worth of Bank has increased to Rs.938.16 crores from Rs.747.37 crores a year ago
   
• A sum of Rs.41.50 crores (previous year Rs. 24.90 crores) has been transferred to Statutory Reserve from the current year's profit,
     
• A sum of Rs. 90 crores (previous year Rs. 30 crores) has been transferred to Investment Fluctuation Reserve from the current year's profit.
   
• The position of Capital and Reserves & Surplus of the Bank as on 31.3.2003 was as under: -

Deposits

Total deposits of the Bank increased to Rs.25463.38 crores as on 31.3.2003 from Rs. 22665.94 crores as on 31.3.2002 registering a growth of 12.34% over the previous year.

The Savings Bank deposits, which continued to remain as a major source of low cost funds, accounted for 34.27% of the Bank's total deposits, which is higher than the industry average.

Cost of deposits declined to 6.79% during the year from 7.20% in the previous year

Advances

The total advances as on 31.3.2003 stood at Rs. 13486.94 crores. The growth rate was 19.3% as compared to the previous year.

Retail Credit increased by more than 100% to Rs.1956 crores during the year from Rs. 891 crores in the last year. As on 31.3.2003 Retail Credit accounted for more than 15% of the Bank's total non-food credit.

Yield on advances is 10.11% against 10.59% in 2001-2002

Total Business

The total business of the Bank stood at Rs. 38950.32 crores as on 31.3.2003 registering a growth of 14.65 % over the last year.

Priority Sector Credit

The aggregate of Priority Sector Credit stood at Rs.5384.92 crores as against Rs. 4611.37 crores a year ago. Priority Sector Credit increased by Rs. 773.55 crores, thus accounting for 40.37% of net bank credit as against the stipulation of 40%.

Agricultural Advances as on 31.3.2003 stood at Rs. 2115.54 crores as against Rs. 1901.03 crores in the previous year, registering a growth of 15.86%.

Credit to Small Scale Industries (SSI) sector stood at Rs. 720.79 crores as on 31.3.2003 as against Rs. 686.50 crores as on 31.3.2002.

Non Performing Assets (NPA)

The net NPA of the Bank has been brought down to 7.08% as on 31.3.2003 from 11.09% as on 31.3.2002. The reduction of 4.01% in a single year was the highest recorded by the Bank since the introduction of prudential norms.

For the first time, reduction in NPA accounts surpassed the additions of fresh NPA during the year. Cash Recovery, Compromises as well as Upgradations & Write-off contributed towards reduction of NPA to the tune of Rs.570.95 crores during the year as against Rs. 350.08 recorded in the previous year.

The provision held against NPA has increased to 51.23% from 41.09% in the previous year. The Bank continues to allocate substantial portion of its operating profit towards provision against NPA.

Under the new Securitisation Act the Bank has issued notices to 1540 errant borrowers accounting for Rs. 476.32 crores of NPA, which has evoked a good response. Out of these, 190 cases have already been settled and in 183 cases the Bank has taken possession of the assets / properties mortgaged / pledged as security.

Capital Adequacy Ratio (CAR)

The Capital Adequacy Ratio (CAR) of the Bank as on 31.3.2003 stood at 11.15% against stipulatation of 9%, on account of public issue.

The business per employee increased to Rs. 1.76 crores as against Rs. 1.51 crores in the previous year.

The Bank has over 2000 branches and offices spread across the country. The break-up of branches as on 31.3.2003 was as under:-

Computerisation

• 843 branches are computerised out of 1923 branches of the Bank, including bi-lingual facilitites in selected branches
    
• 75.10% business has been captured through computerisation
     
• 47 ATMs have been installed by March 2003
    
• To increase fee-based income, tied-up with ICICI-Prudential under referral arrangement for distribution of life insurance products through Bank's branches. More than 1800 policies sold in a period of 5 months during 2002-03 from 100 branches identified for the purpose
     
• In non-life (general) insurance sector, Corporate Agency MoU signed with National Insurance Co. Ltd. Bank to directly sell policies after complying with IRDA formalities.
     
• For speedier collection of outstation cheques and with an eye on fee-based income, one more Quick Collection Centre opened at Lucknow during the year.
     
• To cater to the diversified financial needs of medium sized corporate & business houses the Bank opened 7 Mid-Business Boutiques during the year 2002-03.
    
• IPO issued in October 2002 with resounding success. Rs. 100 crore issue at par oversubscribed by over 3.68 times. No. of retail applications exceeded 2.23 lacs
• For mutual sharing of ATM services across the country the Bank tied up with Corporation Bank.
    

Major thrust on computerization -

1. The Bank has earmarked Rs. 50 crores for IT investment during the year
     
2. 400 additional branches are to be computerised during the next year
     
3. 80% business to be covered through computerisation by March 2004
     
4. Additional 100 ATMs are to be installed taking total ATM base to 151 by March 2004
     
5. Steps are underway to enable the customers to access ATMs of Corporation Bank & vice versa
    
6. Leased Line connectivity of 100 important branches at 9 cities (covering approx. 50% business) is on the anvil.

• Increased focus on fee-based income:-
      
  i) Outlets for distribution of Life Insurance policies to witness a considerable jump
     
  ii) Direct selling of Non-Life Insurance products to take-off on a significant scale.
     
  iii) Two more Depository Services to be opened at Varanasi & Lucknow to cater to the needs of large number of retail investors in these places.