Before I share with you some context around the several positive developments that unfolded in the Bank during the year under review - which heralds the opportunities in the years to come - I would like to briefly touch upon the broader transitions that impacted us – both global and domestic.
The Financial Year 2022-23 was another year of significant challenges for the world. Almost all the nations felt the effects of the ongoing war in Ukraine, growing geopolitical tensions, higher energy and food prices and inflation concerns. Going forward, the global growth is expected to stabilize during Calendar Year 2024 and however, the progress is expected to be gradual.
On the domestic front, the economy exhibited resilience – notwithstanding the significant inflationary pressures driven by global supply shocks and higher input costs. This resilience is attributable to the various measures taken by both the Government and the Reserve Bank of India. The targeted supply management measures implemented by the Government and successive hikes in the policy REPO rate by the Regulator, helped in moderating inflation. Now, the country is poised to regain its pre-pandemic growth trajectory and an increasing optimism could be seen among the businesses and consumers.
The banking industry witnessed a double digit growth in credit offtake during the year and with RBI tightening the liquidity to combat inflation, the Indian Banks sprinted up to garner term deposits by offering attractive rates. The industry also saw a healthy trend in asset quality and steadily enhanced their Return on Assets, Return on Equity and overall profitability. Banks continued to address the customers’ preferences by building channel-less commerce system, unlocking value via customer data and also by opening new branches.
In this backdrop, I would like to highlight a few glimpses about what was another eventful year for the Bank and update you on our performance & progress made during Financial Year 2022-23. We steadfastly pursued our strategy built on three main pillars viz., Business Growth, Asset Quality and Profitability and grew our total business by 12% to ₹ 1,40,806 Crore. We posted a full year Net Profit of ₹ 1,106 Crore, the highest ever in the history of the Bank and trimmed down the GNPA and NNPA levels to 2.27% and 0.74% respectively. We delivered a decent performance across most of the critical financial indicators through organic growth, equally contributed by all the verticals.
The growth in Advances, Net Interest Margins, Return on Assets, Gross Slippages and NNPA levels were in line with the guidance given by the Bank. We further strengthened our Provision Coverage Ratio by allocating prudent provisions and are well prepared to tide over uncertainties which may arise in the usual course of business. The letter of MD & CEO in this Annual Report will give you more specific details about our businesses and our plans for the future.
Our vision is simple: To be the preferred choice of stakeholders and deliver value by blending technology with tradition.
Hence, it is imperative that we run a healthy, vibrant and a responsible bank. To this end, we continue to open branches in southern and western India, enlarge our digital presence through non-branch channels and tie ups, enhance our investments in technology and fast growing data platforms, rope in best-in-class talent pools/skillsets and improve our operational efficiency at all levels of business. When all these tenets react together, we will be well equipped to fulfill our customer needs and also tide over the competition.
We focused on delivering our strategies through our strategic levers viz., People, Processes, Practices, Planning and Partnerships. I am glad to inform you that our strategies continue to pay off. Our robust performance reflects more than the cyclical economic recovery and is underpinned by our ability to consistently adapt & evolve our broad range of diverse capabilities to service our customers’ changing needs.
We are focused on continuously improving our risk management and confining our business plans within the acceptable contours of our risk appetite. We also focus on improving the productivity of our people and also invest in technology while exercising strict credit discipline. The Board remains fully supportive of the Management’s strategies which is helping us to build long term value and deliver long term growth as well as sustainable returns for our shareholders. In short, we recognize our strengths and vulnerabilities, and we play our hand as best we can.
You will note that since the last Annual General Meeting, there have significant changes in the Board. We had to bid farewell to five Directors during the financial year, including the Chairman of the Bank, consequent to their completion of office. We owe our sincere thanks for the critical role played by them in transforming the Bank as a strong financial institution and also for their strong commitment, diligence and valuable contributions during their tenure in the Board. On behalf of the board, I wish them all success in their future endeavours.
I am very glad to share with you that RBI has accorded its approval for reappointment of our MD & CEO Shri B Ramesh Babu for a second term of three years effective from 29th July 2023. I also take this opportunity to welcome Shri Chinnasamy Ganesan, Director, a seasoned professional in the areas of taxation, audit, accounting etc., to the Board of the Bank and I am sure his induction will further strengthen the collective decision making process of the Board. I am equally happy to share with you that the shareholders have approved the reappointment of Shri K G Mohan and Dr R Harshavardhan as Directors of the Bank through postal ballot and their continued services will further enrich the Bank.
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I place on record my
sincere appreciations
for their admirable
dedication in aligning
with the strategies
and enabling the
Bank to deliver on the
promises. I extend
my heartfelt thanks
to our customers,
stakeholders,
investors and all the
shareholders for the
continued support,
confidence and above
all the trust reposed on us.
At KVB, we continue to place a strong emphasis on the diverse composition of our Board of Directors. Presently, our Board consists of Six Non-Executive Independent Directors including me, Two Non-Executive Non-Independent Directors and one whole time Director i.e. MD & CEO. All our Directors bring with them diverse knowledge and experience and they also ensure that ethical standards are upheld and exemplary oversight is maintained across the organisation. The vast experience and varied perspectives of each member of our Board is highly valued and is integral in formulating policies and strategies of the Bank and the Board continues to be guided by their expert and diverse points of views.
Environmental sustainability has always been an area of focus for the Bank. We refined our governance framework related to sustainability agenda and revamped the terms & reference of the Board level Corporate & Social Responsibility Committee to impart additional focus on ESG. We also engaged a leading consultancy firm to assist the Bank in implementing ESG aspects and the Bank has been closely working with the Firm in this regard.
We strive to create a positive and lasting impact on the environment through our actions and are committed to promoting responsible practices and making positive contributions to the society. We are also committed to enhance our ESG disclosures, including disclosing the information aligned to relevant frameworks and standards.
Right since the inception of the Bank, we never failed to do that we should be doing to serve our communities, in order to make a positive difference in the society. We firmly believe that an organisation can be successful in long term by creating value for both our shareholders and society and we remain un-wavered in this commitment.
During the Financial Year 2022-23, we had committed about H 12.84 Crore for a diversified range of CSR activities and this is over & above the mandatory budget of H 11.58 Crore. We continue to serve the underprivileged and our social development initiatives spans across Healthcare, Sanitation, Education, Environmental Sustainability, Women Empowerment and Rural Development.
Looking back, I am humbled by how far we have come and how far we are yet to go. I am happy that the Bank has fortified its internal strengths, as we enter the Financial Year 2023-24 with renewed confidence. We will be more focused on what lies ahead and will strive to deliver decent results to our investors and shareholders.
Going forward, our priorities will be to sustain the decent performance of the past two years and focus on long-term growth and development of our business, while increasing shareholder returns and creating shared value. We will continue to drive digitisation, expand non-branch delivery points, strengthen the Feet on Street, establish dedicated sub-verticals for our flagship products and forge strong partnerships with NBFCs & Fintechs for colending and sourcing.
However, we remain vigilant of the potential macroeconomic and geopolitical factors, inflation and other intrinsic risks in the banking system.
An organisation’s prosperity requires a great team of people with experience, foresight, determination, perseverance, integrity, capabilities and high standards of excellence to ensure its ongoing success. I would like to compliment the leadership team for their relentless efforts and execution capabilities which helped us to unlock greater value for the Bank.
I place on record my sincere appreciation for the admirable dedication of our staff members in aligning with the strategies and enabling the Bank to deliver on the promises. I extend my heartfelt thanks to our customers, stakeholders, Debenture Holders, investors and all the shareholders for the continued support, confidence and above all the trust reposed on us. I am sure that with your strong support, the Bank will move to new heights.
Regards,
Chairperson
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