Building a future-ready bank
India continues to be one of the world's fastest growing economies. This is undoubtedlyan 'outlier' performance especially when global growth is to a large extent overshadowedby weakening financial market sentiments China's gradual slowdown volatility in crudeprices uncertainties around Brexit and trade tensions between the US and China.
Indian economy witnessed a trend similar to the global GDP growth with its real GDPgrowth slowing down in second half of FY 2018-19. However GDP growth for the full yearwas 6.8%.
Against this backdrop we have successfully completed our second year of operations asan SFB and our business philosophy continues to be focussed on inclusiveness and progressfor all. In a fast-developing economy with 1.3 billion people the opportunities areimmense as a large strata of the population remains unserved. With some of the otherbanking and non-banking financial entities grappling with their own set of issues thestage is well set for us.
Moreover the low but improving literacy rates and poor infrastructure especially insemi-urban and rural India make the availability of various services unequal within thecountry. We have 86 Banking Outlets (BO) and 67 Business Correspondents (BC) taking ourbanking services to the last mile customers to drive financial inclusion agenda as our keypriority.
MOMENTUM ACROSS OPERATIONS
In the second year of operations we strengthened our foundation. Despite headwinds oftighter liquidity conditions broader slowdown and cost of funds remaining elevated insecond half of the year we raised '19422 crore of deposits clocking a strong growth ofmore than 145% over FY 2017-18.
We mobilised nearly '4000 crore of retail term deposits during FY 2018-19 and continueto chase more of retail deposits savings account and current account. However thesystematic growth of banking sector deposit was 9.4% for FY 2018-19. We disbursed loansworth more than '16077 crore in FY 2018-19; growing 49% over FY 2017-18.
During the year under review we further strengthened our capital adequacy by raisingboth Tier I capital amounting '1000 crore ('475 crore was infused upfront and balancewill be infused on and before December 2019) and Tier II capital Bonds for '500 crorethrough institutional investors including mutual funds banks and insurance companies.
Innovation continues to be the fulcrum of our operations because 'differentiation'begins with reinventing around the changing needs of customers. We introduced new assetproducts such as business banking gold loan home loan Agri-SME consumer finance andtwo-wheeler loans. As we build scale we expect to achieve reasonable size and as aresult an improvement in our returns.
BANKING FOR NEW INDIA
Our prime objective is to broad base our growth and popularise convenient bankinghabits so that banking reaches the last mile. We are strategically expanding our pan-Indiafootprint.
At the same time we are building a strong digital platform supported by best-in-classtechnology. Our digital team has been beefed up and is building a product positionexploring active partnership with sector leaders emerging start-ups and others forvarious key areas including digital payment modes.
Digital Bharat is the next game changer which will benefit all sections of thesociety. We welcome the government's announcement in the interim budget to connect as manyas 1 lakh villages with digital services within the next five years.
We have a rich legacy of two decades of being a secured asset retail loans specialistand our risk management systems and credit appraisal processes continue to be amongst thebest-inclass in the industry.
Since our NBFC days we have witnessed the challenges faced by Indians deprived ofbanking services and the strong need to include them in the formal economy. In our presentavatar as an SFB we continue to be driven by the same purpose. However besides targetingprimarily the low and middle-income individuals and micro small and medium businesscustomers we have expanded multi-fold and now catering to different cross sections ofcustomers from all walks of life.
Over the years we have helped transform the lives of over a million people withdifferent financial inclusion initiatives. A large proportion of our branch network (over62%) is in the rural semi-urban and unbanked regions. Our 28% branches are in theunbanked rural areas close to 59% of our loan portfolio are of a ticket size below '25lakh and 79% of our lending is for priority sector loans. These facets of our Bankshowcase that we are not just meeting but also exceeding the key objectives of an SFB insupporting aspirations of the people close to the bottom of the pyramid.
Our strategy of growing the right way is to grow collectively responsibly and with agranular focus on retail. Moreover with the government's thrust towards strengthening therural economy increased awareness and our strong engagement with customers in semi-urbanand rural India our core lending landscape continues to grow.
To remain at the vanguard of the industry and to capitalise on the opportunities weare strengthening our operating efficiencies and following the best practices of corporategovernance.
AMBASSADORS OF PROSPERITY
We empower our people by providing them avenues for continuous learning buildingstrong relationships to achieve extraordinary milestones. Our people are true brandambassadors who bring prosperity to the unbanked population and touch their lives.
For us our people are not just doing a job but also helping India prosper.
We are associated with the Government of India's skill development programme where theemphasis is to provide an employment to the youth of rural and semi-urban areas. Weprovide on-the- job and classroom training to our employees for skill development andcareer progression.
During the year under review our book value per share increased by 36% to '108.2 from'79.8 in FY 2017-18 and earnings per share grew by 28% to '13.2 from '10.3 in the previousfinancial year.
Your bank is an agile analytics-driven customer-centric and humane enterprise with ashared ambition to grow the right way bringing prosperity to all stakeholders.
Before I conclude I wish to thank all my colleagues Board Members Reserve Bank ofIndia SEBI and other regulatory authorities management and the larger stakeholderfraternity for their continued guidance and support.