To The Members
PNB has delivered a satisfactory performance during FY'13 despite challengingmacroeconomic environment. Bank continued to be one of the leading nationalized banks withmore than 80 million valued customers. During the FY'13, Bank has crossed various newlandmarks of Rs 7 lakh crore Business, Rs 3 lakh crore Net Advances, Rs 3 lakh crore TotalDomestic Core Deposits, Rs 1.50 lakh crore CASA Deposits and Rs 30,000 crore Networth.This performance is combined with the highest Net Interest Margin, consistently higherReturn on Equity, Book Value per share and Price to Earnings ratio. This performance waslargely due to the Bank's focus on 'Building a Superior Customer Experience' with thruston Retail, SMEs, Agriculture, Inclusive approach to Banking, Cost effective OrganizationalStructure, Better Asset Liability Management, prudent Risk Management, strengtheningRecovery Mechanisms and various Cost Control Measures.
Today, PNB has a countrywide presence with a network of more than 5800 branches andmore than 6000 ATMs that provide its 80 million customers a unique banking experience.This has also earned the Bank strong brand equity and customers' loyalty. Further to takethe customer experience to new heights, Bank has initiated a number of revitalizationactivities such as Centralized Public Grievances Redressal Mechanism and appointment ofChief Customer Service Officer who will work as Internal Ombudsman for resolution ofcustomers' grievances.
The exemplary performance has been duly recognized by the market. During the FY'13,Bank has been recognized as the "Best Public sector Bank" by CNBC TV 18. TheBank has also been recognised as the 'Most Socially Responsive Bank' consecutively forsecond year by Business World and PwC. Further, The Sunday FINWIZ 2012 finds Bank the"Best Banker in Agriculture Credit (Large)". PNB has recently been conferredwith National Award for excellent performance in lending under PMEGP Scheme of KVIC inNorth Zone by MSME Ministry, GOI. Bank has been awarded "Golden Peacock BusinessExcellence Award 2013" by Institute of Directors. Apart from this, the Bank has alsobeen bestowed the IBA Banking Technology Awards 2012 under the categories of "BestUse of Business Intelligence" and "Best Risk Management and SecurityInitiatives".
In this backdrop, your Directors take pleasure in placing the Bank's Annual Report for2012-13 along with its audited annual financial statements.
1. FINANCIAL HIGHLIGHTS
1.1. BALANCE SHEET
|PARTICULARS ||2011-12 ||2012-13 ||%Growth (%) |
|Capital and Reserves ||27815 ||32677 ||17.5 |
|Total Business ||673363 ||700285 ||4.0 |
|Deposits ||379588 ||391560 ||3.2 |
|Low cost Deposits (Savings and Current) ||134129 ||153344 ||14.3 |
|Advances ||293775 ||308725 ||5.1 |
|Retail Credit ||29196 ||31310 ||7.2 |
|Priority Sector Credit ||95898 ||91427 ||-4.7 |
|Agricultural Credit ||45917 ||38055 ||-17.1 |
|PARTICULARS ||FY 2011-12 ||FY 2012-13 ||Growth (%) |
|Operating Profit ||10614 ||10907 ||2.8 |
|Provisions ||5730 ||6160 ||7.5 |
|Net Profit ||4884 ||4748 ||-2.8 |
1.3 INCOME & EXPENDITURE
| ||- ||- ||% |
|PARTICULARS ||FY 2011-12 ||FY 2012-13 ||Growth (%) |
|Interest Income ||36476 ||41893 ||14.9 |
|- - Interest/discount on advances/bills ||28435 ||31855 ||12.0 |
|- - Income on Investments ||7739 ||9530 ||23.1 |
|Non-Interest Income ||4203 ||4216 ||0.3 |
|Commission, Exchange and Brokerage ||2375 ||2337 ||-1.6 |
|Net Interest Income ||13414 ||14857 ||10.8 |
|Total Income ||40679 ||46109 ||13.3 |
|Interest Expended ||23062 ||27037 ||17.2 |
|- - Interest paid on deposits ||21396 ||25501 ||19.2 |
|Total Operating Expenses ||7003 ||8165 ||16.6 |
|- - Establishment Expenses ||4723 ||5675 ||20.1 |
|Total Expenses ||30064 ||35202 ||17.1 |
1.4. KEY RATIOS
|PARTICULARS ||2011-12 ||2012-13 |
|Cost of Funds ||5.62 ||5.70 |
|Yield on Funds ||8.89 ||8.83 |
|Return on Equity ||18.52 ||15.19 |
|Net Interest Margin ||3.84 ||3.52 |
|Return on Assets ||1.19 ||1.00 |
|Cost to Income Ratio ||39.75 ||42.81 |
|Operating Expenses to Average Working Funds ||1.71 ||1.72 |
|Operating Profit to Average Working Funds ||2.59 ||2.30 |
|Rs Earnings per share ( Rs ) ||154.02 ||139.52 |
|Rs Book value per share ( Rs ) ||777.35 ||884.03 |
|Ratio of Net NPAs to Net advances ||1.52 ||2.35 |
|NPA coverage ratio ||62.73 ||58.83 |
|CRAR - Basel II ||12.63 ||12.72 |
2. OPERATIONAL HIGHLIGHTS
Under PNB Pragati-Organizational Transformational Exercise of the Bank,operational excellence is one of the important pillars amongst three pillars on which thisprogramme stands.
The Bank has expanded its Wealth Management Services by forming PNB MetLifeIndia Insurance Co. Ltd. after acquiring 30% stake in MetLife India Insurance Company Ltd.
The Bank has set up its Corporate Office Building named 'PNB Pragati Tower'housing the integrated Treasury office and Circle Office at Bandra Kurla Complex, Mumbai.
The Bank has expanded its international presence to Sydney, Australia its 10thinternational destination. Further, the Bank is exploring possibilities for establishingits presence in Maldives, South Africa, Bangladesh, Myanmar and Singapore.
The Bank is steadily adding to the kitty of its products and services. PNB RuPayCard is one such step in this direction.
The Bank has launched PNB Express Money Remit Card and approximately 15,000cards have been issued so far to beneficiaries of Inward remittance from Middle East.
The Bank also modified the existing schemes and launched several new schemes ofloans for meeting the growing aspirations of customers.
The Board of Directors has recommended a dividend of 270% for the year 2012-13.
4. CORPORATE GOVERNANCE
The Bank is committed to best practices in corporate governance by adhering to highstandards of transparency and accountability in the interests of all the stakeholders.
As a listed entity, the Bank is complying with various regulatory requirements and withthe government guidelines on the matters relating to corporate governance, which has beenexamined by the Statutory Central Auditors.
PNB follows practices that provide its financial stakeholders a high level of assuranceon the quality of corporate governance. These best practices are reaffirmed by CGR-2rating of the rating agency, ICRA Ltd., reflecting a high level of assertion on thequality of corporate governance of the Bank.
5. BOARD OF DIRECTORS
During the Year 2012-13, the following changes took place in the composition of Boardof Directors:
Shri S.R. Bansal was appointed as an Executive Director of the Bank on18.06.2012.
Shri N.S. Vishwanathan was appointed in place of Shri Jasbir Singh as RBINominee Director on 06.09.2012.
6. Details of various meetings held up to 31st March, 2013:
|S. No. ||Meeting ||Number of meetings held ||S. No. ||Meeting ||Number of meetings held |
|1 ||Board Meeting ||12 ||11 ||Share Transfer Committee ||25 |
|2 ||Management Committee ||14 ||12 ||Shareholders'/ Investors' Grievances Committee ||6 |
|3 ||Committee of Directors to review vigilance and non-vigilance cases ||4 ||13 ||Directors Promotion Committee ||3 |
|4 ||Audit Committee of Board ||11 ||14 ||Appellate and Reviewing Authority ||- |
|5 ||Risk Management ||4 ||15 ||Steering Committee Vision 2013 ||4 |
|6 ||Special Committee of Board to Monitor and Follow Fraud cases of Rs 1.00 crore and above ||9 ||16 ||Nomination Committee ||- |
|7 ||IT Committee of the Board ||4 ||17 ||Insurance Joint Venture Committee ||- |
|8 ||P.A. Committee ||9 ||18 ||Head Office Credit Approval Committee Level-III ||40 |
|9 ||Remuneration Committee ||2 ||19 ||Election of Shareholders Directors - Voting by Public Sector Banks ||- |
|10 ||Customer Service Committee ||4 ||20 ||Committee of Board to monitor the progress in recovery ||1 |
Shri M.P. Singh ceased to be Workmen Employee Director on 27.01.2013 oncompletion of his tenure on the Board of the Bank.
Shri T.C. Jhalani was appointed as Workmen Employee Director on the Board of theBank vide notification dated 08.03.2013.
Shri Pradeep Kumar ceased to be Non Workmen Employee Director on 14.02.2013 oncompletion of his tenure on the Board of the Bank.
The Board welcomed Shri S.R. Bansal, Executive Director, Shri N.S. Vishwanathan, RBINominee Director and Shri T.C. Jhalani, as Workmen Employee Director on the Board ofDirectors of the Bank. The Board also wishes to place on record its appreciation for thevaluable contribution made by Shri Jasbir Singh, RBI Nominee Director, Shri M.P. Singh,Workmen Employee Director and Shri Pradeep Kumar as Non-workmen Employee Director.
The Board of Directors thanks the Government of India, Reserve Bank of India,Securities and Exchange Board of India, Stock Exchanges, Bank's customers, public and theshareholders for the valuable support, continued patronage and confidence reposed in theBank.
The Board wishes to place on record its appreciation for the valuable contribution madeby the members of the Bank's staff at all levels and look forward to their continuedinvolvement in achieving the future goals.
For and on behalf of Board of Directors
Chairman & Managing Director