Dear Shareholders,
Greetings!
I am extremely delighted to write to you as the Chairman of the Board
of Federal Bank, a Bank that has been consistently punching above its weight. It would be
no exaggeration to state that your Bank is on its course be ‘The Most Admired
Bank?, an observation from my several years of association with it. In addition to
the excellent performance, an exceptional focus on credit quality, seamless processes and
systems, ethical practices, and disclosures are the hallmarks of your Bank and a strong
regard for compliance is irrefutably the soul of the franchise.
Globally, FY22 was a year with challenges around supply chain
disruptions and steep rise in input costs which impacted almost all sectors and companies.
Yet, India witnessed a revival in economic activities and its GDP grew by 8.7% due to
accelerated vaccinations coupled with sustained fiscal and policy support by the
government.
While heading into FY23, both global and Indian economy faces the risks
of stagflation and geopolitical tensions arising from the Russia-Ukraine war which is
visible currently in U.S and U.K. In India too, the inflation levels are at a high but the
cautiously optimistic approach followed by MPC at the beginning of calendar year and the
timely thoughtful responses to the evolving economic developments and tectonic shifts are
expected to help keep a check at Indian inflation levels.
Despite the arduous macro environment, the spirit of Team Federal
was not dampened and your Bank continued the sprint to win the ultimate marathon.
The Bank has been working towards becoming the First Choice for all
Indians, with its philosophy of superior customer service at the core. The Bank has
achieved this through sustained investment in technology and people, which has given the
Bank the much needed edge in the tech space and provided unparalleled banking experience
to customers.
This year the Bank has recorded market share gain in its core business
by continuing its thrust on innovation. The sustainability agenda has found the right
catalytic approach as the Bank embarks on achieving lofty ambitions in years ahead. The
pandemic has turbocharged this drive and an ambitious long-term charter has been mapped to
embed environmental, social and governance (ESG) Standards to Bank?s core business
operations. The Bank is today a near paperless bank and with perhaps one of the lowest
direct and indirect carbon footprints. Socially it has been taking meaningful
interventions around improving country?s healthcare and education ecosystem, skilling
individuals and empowering women. You will be glad to know that your Bank is an active and
engaged facilitator of various government sponsored credit schemes to support financial
inclusion. I take pride in stating that these sustainability actions have helped the Bank
secure a spot in CRISIL Sustainability Yearbook 2022 in addition to being benefited by the
Capital infusion from International Finance Corporation (IFC), which is also their first
such investment in India aligned to the Greening Equity Approach. I welcome them aboard
and believe that the Bank would grow leaps and bounds with their global expertise.
BEING AN OASIS OF GROWTH AND PATIENCE
Federal Bank has delivered one of its best performances with a
broad-based progress across all parameters. Net profit growth was sturdier at 18.83%. Net
worth stood at 18,660.98 Crore, growing by 15.83% over the previous year.
Capital adequacy ratio improved 115 basis points to 15.77%. The Bank
witnessed good momentum in advances, resulting in total gross advances growth by 9.46% YoY
to 1,47,639 Crore. Yet at the same time, the Bank took a conscious call to stay away from
certain stressed pockets to maintain credit quality. The market share of personal inward
remittances to India saw an upsurge to 20% as clients experienced end-to-end automated
solutions that ensured instant transfers with the highest levels of safety.
A strong footing with a very low GNPA and NNPA places the Bank amongst
the top tier commercial banks. The bank?s liability business continue to be organic
and granular which is an indicator of capital conservation.
With a solid market reputation, credit quality and a well-capitalized
position, Federal Bank is positioned to accelerate growth and withstand any disruptions
that may come, with innovative products and impeccable customer service.
POWERED BY A VISIONARY LEADERSHIP
Every organisation is built on the power of people. I am fortunate to
have some eminent intellects beside me on the Board who have guided this organisation in
its pursuit of highest standard of governance. I thank them for their support and
guidance. I would also like to express my sincere gratitude to Ms. Grace Koshie for her
yeoman leadership as last Chairperson. This year, two new members, Mr. Ramanand Mundkur
and Mr Sankarshan Basu, joined the Board. I welcome them onboard and am sure that your
Bank will benefit from the diverse expertise they bring in.
The current top tier of senior leadership is a seasoned and vibrant
team of professionals who will continue the relentless pursuit for excellence under the
able guidance of their visionary MD & CEO Mr. Shyam Srinivasan. With their immense
knowledge, expertise and values that are aligned with the organisation, they are doing a
phenomenal job in taking your Bank to greater heights. Their efforts have translated into
your Bank winning prestigious accolades over time. This year too, the bank won many
awards. To name a few, the Bank was adjudged the best mid-sized bank by KPMG for the
second consecutive year and ‘Private Sector Bank of the Year? Award (Gold
category) at the 20th edition of Outlook Money Awards. The Bank also won
various awards for its technology initiatives such as Finnoviti Award, BFSI Technology
Excellence Award and Annual Banking Technology Award by IBA.
CLOSING THOUGHTS
Federal Bank has increased dominance in its home market and continues
to increase prominence in other territories,this is indeed shaping our plans for future
growth quite well. While the core principles of ethics and excellence have been time
tested and relevant, the heightened aspirations necessitate infusing more vigour. And so,
the Bank has devised a new value framework of CARES – Commitment to Excellence,
Agility, Relationship Orientation, Ethics and Sustainability. It will be a guiding
principle for actions and interactions for the employees with the stakeholders, making the
Bank relevant in a multi-generational and multi-cultural ecosystem. It will also reinforce
our strategic vision of becoming the Most Admired Bank for all our stakeholders.
On behalf of the Board, I thank all the stakeholders for standing by us
in the most challenging times. We are grateful to the customers for trusting us. I am
thankful to our people who truly deserve appreciation for rallying and remaining committed
towards ensuring seamless services to customers.
With best wishes,
C Balagopal