During FY 09, the bank has adopted several business development initiatives to grow its business and one important initiative is to bring all the branches under core banking solution (CBS). With 100% CBS branches, the bank competently managed the challenging economic conditions during FY 09, to grow its total business by 23.60% to reach Rs 103,818 crore in FY09 as compared to Rs 83,993 crore during FY 08. The banks total income increased by 26.96% to Rs 4,836 crore during FY 09, reflecting the significant buoyancy in core banking operations, excellent fee based income and focus on healthy earning assets which contributed to improvement in the profitability. As a result, the banks operating profit and net profit surged 21.86% and 13.46% respectively.
The banks tier-I capital ratio stood at 8.67% as on 31st March 2009, which is marginally higher than the previous year figure of 8.54% under Basel II. Overall, the bank has reported capital adequacy ratio of 13.22% under Basel II as on 31st March 2009 (11.61% in FY08) while Basel I CRAR was at 12.37%. As a special feature of its rating process, Brickwork calculates the leverage, which assesses the banks net worth with reference to on and off balance sheet items. During FY 09, the banks leverage though higher was still comfortable at 18.31 in FY 09 as compared to 16.4 in FY 08.
The Bank has continued to show good performance in Q2 FY 10.Total deposits increased to Rs.62,279 crore, while advances increased to Rs.48,182 crore. The bank has been consistently reducing its non-performing assets. Gross and net NPAs stood at 0.83% and 0.16% respectively in Q2 FY 10. Further, the banks net profit has surged by 69.61% q-o-q to reach Rs 273 crore in Q2 FY 10. As result, the banks return on assets has improved to 1.53% in Q2 FY 10 from 1.12% in Q2 FY 09. The loan loss coverage has improved to 83.66% in Q2 FY 10 from 81.49% in FY 09.
The bank was incorporated in 1923. It was nationalized in 1980. The Govt. of India holds 51.55% stake in the Bank. The bank offers retail banking, small and medium enterprise (SME) banking, treasury and financial institutional services. During FY 09, the bank opened 66 branches, and 70 ATMs. The banks delivery network consists of 1432 branches and 726 ATMs as of 31st March 2009.
The rating factored inter alia, the majority stake held by the Govt of India, comfortable capital adequacy and Tier I capital, lower term loan component in its loan assets, well diversified credit profile, and prudential higher loan loss coverage.