IDBI Bank Ltd

On behalf of the Board of Directors, I am pleased to present the Bank's Annual Report for the Financial Year (FY) 2023-24. I write to you with an undeniable sense of pride in the way your Bank has performed during the financial year in terms of its business and financial performance and also its commitment towards enhancing value for all its stakeholders.

The global economy in the year 2023 remained resilient despite various macroeconomic challenges, geo-political uncertainties, elevated inflation and tight financial and monetary conditions. Pace of growth in major Advanced Economies (AEs) and several major Emerging Market Economies (EMEs) has been better than expected. The monetary policy rates were kept on hold by major central banks in the AEs to ensure the aligning of inflation with targets.

Amidst the challenging global environment, the Indian economy expanded at a robust pace and emerged as one of the fastest growing major economy in the world and a leading contributor to global growth. The domestic economy exhibited strength and stability in its growth momentum, underpinned by healthy investment activity. The comprehensive and timely policy initiatives aided in strengthening the macroeconomic fundamentals, which provided an added impetus to the manufacturing and services sectors. Furthermore, the consumer and business sentiments also remained buoyant.

In contrast to the volatile global market conditions, the domestic financial market remained fairly stable. India's banking sector continued to remain resilient during the year owing to robust macroeconomic fundamentals on the back of conducive policy environment and comprehensive structural reforms. Growth in bank credit remained robust with improving macroeconomic activities, outpacing deposit expansion. Several factors such as stronger balance sheet, adequate capital and improved asset quality aided the banks in meeting the expansion in the credit demand in the economy.

Your Bank continued to remain committed towards keeping its customers at the core of its business strategy. To further its customercentric business approach, the Bank, apart from offering an entire bouquet of traditional banking products and services, also offered innovative banking and investment solutions to cater to the emerging needs of its customers across segments. The Bank has been making concerted efforts to expand its branch network and augment its digital functionalities to increase convenience and accessibility for its customers on a 24x7 basis, thereby ensuring seamless banking transactions. In addition to promoting customer-centricity, the Bank is also working steadfastly towards positioning itself as a retail-focussed entity by augmenting the share of its retail business both on the asset and the liability front. While the focus is on augmenting its asset book, your Bank is also placing due emphasis on maintaining asset quality to ensure a healthy balance sheet and a robust capital base.

The strong macroeconomic fundamentals and conducive business environment aided the Bank in pursuing its strategic objectives during the year. Apart from this, your Bank also remained committed towards maintaining a strong risk management framework and a robust compliance culture to pave the path for a sustainable and profitable growth path in the long run.

Your Bank registered profit for the fourth consecutive year, with each year's performance improving over the previous year. Your Bank registered an all-time high net profit of Rs.5,634 crore in FY 2023-24 while registering an annualised growth of 55% over the previous year. On the business front, your Bank's total business improved with both advances and deposits registering growth in FY 2023-24. The total business was at Rs.4.66 lakh crore in FY 2023-24, registering an annual growth of 12% over Rs.4.18 lakh crore in FY 2022-23. With regard to asset quality, the Bank maintained a high Provision Coverage Ratio (PCR) and also undertook concerted efforts to reduce its Gross Non-Performing Assets (GNPAs) and Net Non-Performing Assets (NNPAs) and contain slippages.

Your Bank's capital position also improved further and remained well above the regulatory requirements. An optimal mix of several factors, such as conducive business environment, comprehensive business strategy, vision of the leadership, unwavering dedicated efforts of employees and trust of the stakeholders, aided the Bank in consistently improving its business performance and overall profitability.

I am happy to state that the Board of Directors of your Bank have recommended a dividend of Rs. 1.50 per Equity Share of face value of Rs. 10 each of the Bank for the financial year ended March 31, 2024, subject to approval of the shareholders at the Annual General Meeting.

The financial year 2023-24 was yet another milestone year for your Bank as it continued to make steady progress toward its strategic objectives of expansion, profitability, operational effectiveness, technological advancement and transitioning towards an environmentally conscious entity. Going forward, your Bank intends to leverage its inherent strengths and competencies to capitalise on the emerging business opportunities to further augment its profitability. Your Bank will continue to work towards maintaining its intended positioning as a retail-centric bank. Furthermore, your Bank will remain committed to enhancing its business potential by exploring new business opportunities, without undermining the quality of business being sourced as also taking proactive measures to ensure good quality asset book.

In keeping with the changing business landscape and evolving consumer preferences, your Bank will continue to broad-base its products and services offering while expanding its geographical reach as also embracing latest technological innovations to deliver its offerings in a quick, efficient, secure and seamless manner. Towards this end, your Bank will continue to strengthen its digital infrastructure and increase its investment in technological upgradation to maintain its competitive edge and enhance its operational efficiency. Additionally, your Bank will emphasise on continued focus on robust governance, risk and compliance practices across all its business and support functions in order to re-validate its status as the most preferred and trusted bank among all its stakeholders.

On behalf of the Board of Directors of IDBI Bank, I would like to express my sincere thanks to the Government of India, the Reserve Bank of India and all the other statutory & regulatory authorities for their continued support and guidance. I would also like to extend my gratitude to shareholders and customers for their unstinted patronage, sustained support and co-operation. Your Bank values your continued trust and confidence and shall continue to work assiduously to live up to your expectations. I would also like to convey my sincere appreciation to my colleagues on the Bank's Board for their vision and invaluable contribution towards driving the Bank's governance and business growth. Last but not the least, I would like to express my gratitude to the Top Management and all employees of the Bank for exhibiting their unwavering dedication and commitment that paved the way for the Bank to achieve its overall business objective and scale new heights in spite of the challenging business and operating environment.

I would like to reiterate your Bank's commitment to enhance the value for all its stakeholders by establishing itself as the most preferred and trusted bank in the Indian banking space.

With best wishes,

Chairman.