Speech of The Managing Director & CEO Mr.B.P.Sharma Delivered At The 19 th Annual General Meeting of Bank of India Held On 20.07.2015 ------------------------------------------------------------------- Dear Shareholders On my personal behalf and on behalf of the Board of Directors and the Employees of the Bank, I extend a warm welcome to each one of you to the 19th Annual General Meeting of your Bank. Before we get to the financials, let me briefly dwell on the banking and macro-economic scenario. GLOBALSCENARIO Major economies of the world are going through a sluggish phase and to improve the economic scenario central banks of developed nations like USA have unleashed quantitative easing. However, global growth is expected to be around 3%. A major development to watch out for would be the measures taken up by BRICs Bank and the Asian Infrastructure Investment Bank (AIIB). India has a major stake in the BRICS Bank with the first President being an Indian national. Infrastructure funding in Asia is set to receive a major fillip through these two institutions. DOMESTIC ECONOMY-OVERVIEW According to the Central Statistical organization, Indian economy grew by 7.3% for 2014-15, higher than 6.9% for 2013-14. The main contributor to the growth story is services sector with mining and manufacturing also registering growth rates of 3.50% and 5.40% respectively. However, certain statistics continue to be worrisome. Bank credit growth is muted at 9.8% on a y-o-y basis. Gross NPA ratios of banks are expected to average 4.5% for FY 2015-16. The removal of forbearance for restructured assets with effect from 1.4.2015 will further adversely impact bank profitability. Low credit growth shows lower demand for funds due to general slowdown. Further, corporates resorted to cheaper ECBs and commercial papers for raising funds. A slew of initiatives were ushered in the banking space during FY 2015.
One of the major initiatives was the recommendations given by P.J. Nayak Committee to review the governance of Bank Boards. Further, the scope of priority sector lending has also been widened to include renewable energy projects within its ambit. Guidelines were also issued for small finance banks and payment banks with a minimum equity capital of Rs.100 Cr each. A major development was the instruction to banks to form a Joint Lenders Forum (JLF) to deal with cases of stressed accounts. Bank s performance I would now like to touch upon major highlights of your Bank s performance for the year 2014-15. Business Growth Global Business-mix of the Bank reached a level of Rs. 9,43,633 crore as on 31st March 2015 from Rs.8,53,202 crore as on 31st March 2014, registering a growth rate of 10.60%. Overseas business grew up by 13.65%, reached at Rs. 2,56,118 crore and constitutes 27.14% of the total business of the Bank. Your Bank s Total Deposits went up to Rs. 5,31,907 crore, registering a growth of 11.52% over previous year. Bank s Domestic Deposits and Overseas Deposits grew by 9.46% and 18.10% respectively.
Your Bank s Gross Advances went up to Rs. 411,726Crore, registering a growth rate of 9.44% over previous year. Bank s Domestic Advances and Overseas Advances grew by 9.56% and 9.15% respectively. CASA Deposit grew 8.46% from Rs. 1,05,467 Crore on 31 st March, 2014 to Rs.1,14,386 Crore on 31 st March, 2015. Bank s Domestic Deposits and Advances growth rates are above the banking system growth. Profitability Your Bank s Operating Profit stood at Rs. 7,488 as on 31 st March, 2015. Your Bank s Net Profit stood at Rs.1,709 Crore as on 31 st March, 2015. The Total Income during the year 2014-15 registered a growth of 12.94% to Rs.47,663 crore from Rs. 42,202 crore during the previous year. The Earning per Share (EPS) of the Bank for FY 2014-15 stood at Rs.26.57. The Cost to Income Ratio was 51.93% for FY 2014-15. Your Bank s Net Worth increased from Rs. 24,543 Crore on 31 st March, 2014 to Rs. 26,494 crore as on 31st March, 2015. Capital Adequacy Ratio (CRAR) as on 31st March, 2015, under Basel-II stood at 11.42% and Basel-III stood at 10.73% as against the Regulatory stipulation of 9%.
Priority Sector Priority sector advances of the Bank reached a level of Rs. 94,572crore as on 31st March, 2015, It constitutes 35.20% of Adjusted Net Bank Credit (ANBC). Credit to agriculture sector reached a level of Rs. 43,183 Crore, registering a growth of 7.39% over last year. Priority sector advances have wide social ramifications apart from presenting a big business opportunity. With its vast network of rural and semi-urban branches and committed personnel, your Bank has always been one of the leaders in priority and agriculture sectors. Bank has been assigned Lead Bank responsibility in 51 districts spread over five states, Jharkhand (15), Maharashtra (14), Madhya Pradesh (13), Uttar Pradesh (7) and Orissa (2). Bank has been successfully discharging its duties of Lead Bank in all these districts. The Annual Credit Plan (ACP) for the year 2014-15 was launched in all the Lead Districts involving credit outlay of Rs. 17,325 Crores for the Bank. Bank has achieved Rs.16727 Crores under ACP which is 96.55%. Your Bank is SLBC Convener in the state of Jharkhand. Financial Inclusion Your Bank remains one of the front runners in the commitment and implementation of Financial Inclusion Initiatives. Some major progress under Financial Inclusion Plan (FIP) FY 2014-15 are: 182 lakhs Basic Savings Bank Deposit Accounts were opened and Smart Cards issued.
Rs. 1,730 Crore Deposit mobilized in BSBD Account. 68.53 Lakhs Accounts opened under Pradhan Mantri Jan DhanYojna (PMJDY) and Rs. 408 Crore mobilized. 66.73 Lakhs Rupay Card Issued. 23.44 lakhs GCC/KCC issued to the Customer. 7,569 Business Correspondents engaged to provide services. In 4,404 Villages, Bank has achieved 100% Financial Inclusion. Asset Quality Your Bank s Gross NPAs and Net NPAs stood at 5.39% and 3.36% respectively as on 31 st March, 2015. The Provision coverage ratio is 52.40%. In order to address the asset quality concerns, your Bank continues vigorous follow up and recovery of NPA accounts. Dividend Your Bank s Directors have recommended dividend of Rs. 5/- per share (on the face value of Rs. 10/- per share). The Total dividend payment will amount to Rs. 399.72 crore (including dividend distribution tax). Branch Network: Your Bank is having total 4,892 domestic branches and 36 Extension counters and 6,771 ATMs across the country.
Bank is having 56 foreign branches/ offices with a presence across 5 continents and 22 countries. Bank also converted its representative office in Dubai to a branch during 2014-15. Initiatives during FY 2014-15 Your Bank undertook several initiatives to foster business growth and customer services. The major highlights are: 246 new Branches and 400 e-galleries were opened during2014-15 adding 1.65 mn new customers taking the total customer base to 78.65 mn. 306 `Branches of Future providing specialised customer service are operationalized. 49 Retail Business Centers (RBCs) have helped accretion in Retail credit. Bank has launched chip based Debit & Credit cards. Corporate Social Responsibility (CSR Initiatives) As one of India s largest and most reputed banks, your bank has undertaken a variety of initiatives in the CSR, the details of those are given in our Annual Report. However some of the highlights are: i. Actively participated in Government of India Swach Bharat Mission on improvement in cleanliness of environment. The Bank has approved CSR spending of Rs. 4.00 crores for construction of toilets in 85 secondary Girls schools in Jharkhand and Rs.0.60 lakh in Rajkiya Madhyamik Vidyalaya, Jaipur, Rajasthan.
ii. Funds to Tribals Society in Chennai for running Primary schools, purchase of school bus to ferry poor students belonging to BPL/SC/ST/OBC families. iii. To provide relief to the victims of Hud-Hud cyclone the Bank donated Rs. 2 crores to the Chief Minister s Relief Fund and also spent Rs. 2.18 lakh for providing essential items as an immediate relief measure to Hud-Hud victims. In Jammu & Kashmir, Blankets costing Rs. 6 lakh were distributed to the victims of unprecedented flood in September 2014. iv. For improvement /protection of the environment Bank has contributed with CSR fund of Rs. 49.81 lakh to M. S. SwaminathanResearch Foundation (MSSRF) for establishment of Biovillage in Villupuram (Tamilnadu). CSR fund of Rs. 10.29 Lakh to M/s SEWAYOG for Vriksha Vandana Programme for plantation of Trees in Mathura for maintaining Ecological balance; CSR fund of Rs. 10 Lakh to Panaji Municipal Corporation for purchase of a Tipper Truck for keeping the Panaji city clean & green. v. Medical facilities were provided to the poor, underprivileged rural people in tribal, desert and far flung area like Agra District, Banaskantha in Ahmedabad, Ghaziabad, Latur. vi. Bank has funded Rs. 10 Lakh to Ramkrishna Mission Belur, Howrah for the purpose of purchasing a Welding Machine for making employment-ready, the students from low income group.
Awards and Accolades: During the year, the Bank has received the following awards- Bank received Best MSME Bank and Best Bank for Operational Performance awards. Bank received Outlook Money Award for Best Home Loan Provider under Runner up category. Financial Inclusion & Payment System Award by EletsMedia at New Delhi at the hands of Minister of Rural Development. Bank received PMJDY Excellence Award from Honorable Union Minister. Bank received IBA Award for Best Financial Inclusion Technology Initiative from IDRBT. Bank received Skoch Group Financial Inclusion Deepening Award. Bank won IT excellence award by ETNOW and VMWare for effectively implementing Virtualization in the Bank. Bank received the Award CIO100 2014 for the Product StartokenNG. Bank received Best HR Technology award, 2014 from Banking Frontiers at Mumbai.
Acknowledgement: I wish to place on record the valuable contributions made by the directors of the Board who demitted office during the year viz. Shri R. Koteeswaran, Shri K. K. Nair, Shri P. M. Sirajuddin, Shri Pramod Bhasin, and Shri Umesh Kumar Khaitan. The Bank is grateful to the Government of India, the Reserve Bank of India, the SEBI, Other Regulatory authority and the Board from whom it has been receiving excellent support and valuable guidance. I thank our Business Associates, customers and shareholders for their continuous support. These accomplishments would not have been possible without the tireless efforts of our committed staff members. Onbehalf of the Bank and on my personal behalf, I would like to thank all the stakeholders and look forward to their continued patronage, guidance and support. Date: 20.07.2015 Place: Mumbai B.P Sharma (Managing Director & CEO)