ADDRESS OF THE CHAIRMAN & MANAGING
DIRECTOR
October 28, 2005
Our friends from the Press and media, Ladies and Gentlemen:
A very good afternoon to all of you. I welcome you all to
this press conference. The Board of Directors of the Bank met at Kochi on October 22, 2005
and have taken on record the Audited Financial Results for the six months period ended
30th September 2005. I am very much happy to announce the first half-year results of the
financial year 2005-06.
I am happy to inform you that the total business of the Bank
consisting of deposits and advances has increased by 17% from Rs 33,330 crore as on
30.9.2004 to Rs 38,995 crore as on 30.9.2005. So far as deposits are concerned these have
registered a growth of 9.18% from Rs 23,816 crore as on September 2004 to Rs 26,003 crore
as on September 2005. The low cost deposits have grown from Rs 10,947 crore as on
September 2004 to Rs 11,897 crore as on September 2005. These deposits account for 47.44%
of the total deposits of the Bank. The cost of deposit for the Bank has further declined
to 4.93% during the half-year ended on 30th September 2005 as against 5.19% during the
corresponding period last year.
The Net Advances have increased by Rs 3,478 crore from Rs
9,514 crore as on 30.9.2004 to Rs 12,992 crore as on 30.9.2005 registering a growth of
36.6%. Consequently, the Credit Deposit Ratio increased from 42% to 51.8% during the same
period.
The Retail Credit extended by the Bank has registered a
healthy growth of 58.4% from Rs 1,369 crore in September 2004 to Rs 2,169 crore in
September 2005. The Housing Loans within the Retail Credit have shown a growth of 66% from
Rs 626 crore as on 30.9.2004 to Rs 1,039 crore as on 30.9.2005. The Education Loans have
also shown a significant improvement from Rs 54 crore as on 30.9.2004 to Rs 119 crore as
on 30.9.2005 registering a growth of 120.4%. The Priority Sector Credit has increased from
Rs 3,588 crore as on 30.9.2004 to Rs 5,454 crore as on 30.9.2005 registering a growth of
52%. The ratio of Priority Sector Credit to total credit works out to 42% as against the
national goal of 40%. It is gratifying to note that the agriculture advances of the Bank
have registered an impressive growth of 49.3% from Rs 1,216 crore as on 30.9.2004 to Rs
1,816 crore as on 30.9.2005.
The Investment portfolio of the Bank has declined from Rs
14,115 crore as on 30.9.2004 to Rs 13,936 crore as on 30.9.2005 in line with the Bank's
efforts to reduce the market risk on this portfolio by giving a push to advances.
The gross NPA ratio has declined from 7.60% as on 30.9.2004
to 5.93% as on 30.9.2005. The net NPA ratio has also improved to 2.44% in September 2005
as against 2.83% in September 2004. The NPA Provision Coverage Ratio stood at 60.3% in
September 2005.
Despite difficult environment, the operating profit of the
Bank has increased to Rs 359 crore during April-September 2005 as against Rs 336 crore
during April-September 2004. The Net Profit has worked out to Rs 104 crore during
April-September 2005 as against Rs 103 crore during April-September 2004.
The profitability of the Bank has been adversely affected due
to various factors such as, increase in wage bill on account of salary revision,
additional provision requirement for doubtful NPAs as per RBI guidelines and depreciation
on Investments.
The Bank is taking various initiatives to strengthen its IT
structure. The Bank has installed 54 additional ATMs during half-year ended 30.9.2005. It
is also a member of CASH TREE Network through which its customers have an access to 1925
ATMs across the country. It has also been decided to extend the Multi Branch Banking
facility to 200 branches whereas the said facility is available in 100 branches as of now.
The Wide Area Network is proposed to be extended to 300 branches by March 2006 from
existing 200 branches. The Bank provides Tele Banking and Mobile Banking facilities and is
planning to introduce Internet Banking shortly.
The Bank has entered into tie up arrangements for
distribution of bancassurance products with TATA AIG Life Insurance Company Ltd. and Bajaj
Allainz Ltd. During the half-year under review, it has entered into MoUs with NABARD and
EXIM Bank to give push to its advances portfolio relating to agriculture and export. It
has also entered into a tie-up arrangement with National Small Industries Corporation for
increasing credit to SME sector.
With a view to strengthening its Risk Management systems, the
Bank has engaged ICRA Ltd. for developing a Credit Risk Rating model.
The Bank's networth has improved to Rs 1740 crore in
September 2005 as against Rs 1401 crore in September 2004. The Capital Adequacy Ratio at
16.58% in September 2005 is quite comfortable.
During the half-year under review, three new products, viz.
UNITED SALARY PAYMENT, UNITED SURAKSHA YOJANA and UNITED SIKSHAK SAMMAN YOJANA were
introduced. During a campaign to open Savings Bank Accounts, the Bank has succeeded in
adding 3 lac Savings Bank Accounts.
I would now request my colleague, Shri Ashoke Banerjee,
General Manager of the Bank to make a small presentation to all of you and thereafter
myself and my senior colleagues would be happy to take questions from you.
Thank you.
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