Dear Shareholders,

Greetings!

Since we met a year ago we have remained in the throes of successive waves of the pandemic that has gripped the country and the planet. We gratefully acknowledge your presence with us today despite the trying times. As Mahatma Gandhi wisely observed “Strength does not come from physical capacity. It comes from an indomitable will”. And so we rise up chastened yet strengthened with a new resolve to face the challenges of an evolving new world.

Variety of stimulus measures across the globe is helping countries put their economies back on the growth track, and yet globally, the recovery remains uneven.

In India, the higher-than-expected GDP growth of 1.6% in the last quarter of FY21 did moderate the challenge created by the pandemic to some extent. However, the 7.3% contraction in GDP in FY21, as per the provisional estimates of the National Statistical Office (NSO), remains a matter of concern. While projecting a rebound for the Indian economy to 9.3% growth in FY22, Moody’s Investor Services has said that risks to India’s financial sector have been exacerbated by the second wave of the pandemic.

Banking sector especially has had a harder job at hand because bankers have the dual responsibility of shaping the economic recovery as well as helping their customers rebuild financial health while ensuring that they and their families stay safe. Reserve Bank of India (RBI) came to the immediate rescue, monitored the emerging situation and deployed all resources and instruments at its command for individuals, business entities and institutions softening the impact of the pandemic quite materially. Continued stimulus support by the RBI and the Government, which has made several policy interventions in FY21, could give a fillip to growth for the banking sector.

It is in the backdrop of this challenging macro environment that I am happy to share your Bank’s excellent performance on both, financial and non-financial metrics, for the year under review. Going by the financial yardstick, Q4 of FY21 proved to be one of the best quarters in terms of performance for your Bank, which recorded its highest ever quarterly net profit, coupled with nearly 59% year-on-year growth. And as a banking organisation, we are relentlessly pursuing continuing improvements in quality in every dimension which would support a strong recovery and serve our stakeholders better.

Led by the twin focus on digital enablement and people empowerment, and supported by operational strength, the Bank navigated unprecedented challenges during the year to deliver exceptional numbers. Total Business crossed the landmark figure of ₹3 Lakh Crore, registering over 10% growth, with Net Interest Income growing 19% y-o-y to touch ₹5,534 Crore. Annual Operating profit showed a growth of 18% over the previous year. Low GNPA and NPA put us among the top tier commercial banks in terms of credit quality, while the collective efforts of our teams across functions enabled collection efficiencies to above 95% levels as on March 31, 2021.

It is our belief in the Board that behind these numbers lie a story that goes beyond efficient cost management and fiscal prudence. It is a story of the power of collective resilience, grit and agility of our workforce, who went the extra mile to support the Bank’s Business Continuity Plan (BCP) that we put into action immediately after the pandemic broke out. The pandemic had challenged the edifice, with lockdown restrictions and safety protocols necessitating a shift from interpersonal connect to remote customer service proposition. However, striking a fine balance between ensuring business continuity and maintaining safety of employees and customers, the team moved with extraordinary agility to sustain operations through the difficult external environment that prevailed through the year. At the same time, we successfully created new touchpoints of customer connect. To ensure that critical segments and IT operations were unaffected even for a day during the lockdown, our core teams got together under one roof, where they stayed for more than a month till the business had transitioned successfully into the New Normal that emerged with the easing of the restrictions. It underscores the deep-rooted strengths that we have carefully nurtured through targeted strategic interventions over the years, in our quest to become the most admired.

I thank my colleagues on the Board for being steadfast in their pursuit of the highest standards of governance and ensuring that your Bank has a steady line of leadership that is agile and dynamic. I take this opportunity to heartily congratulate Mr. Shyam Srinivasan for a year that has seen the recognition of his record of exceptional leadership. He has been conferred the Business Standard ‘Banker of the Year 2020’! The reward did come to a Bank which has retained the faith of depositors and shareholders in India’s banking system without giving the regulator grounds to complain. The numerous awards that followed us in the previous fiscal including The Best and Fastest Growing Bank in the mid-sized category award by Business Today & KPMG, Private Sector Bank of the year by Outlook Money, Great Place to Work certification all endorsing our deep-rooted strengths and the relevance of our strategy in these testing times.

CONNECTED, ALWAYS!

In its journey towards the realisation of the goal to be the First Choice, your Bank has pursued the mantra of staying connected with customers, always!

It is to the credit of our people that they made a difficult transformation appear seamless.

On behalf of the Board, I convey my heartfelt appreciation to our people, and assure them and their families, of the Management’s continued support in these hard and difficult times of the pandemic. Moving forward, we are confident that your continuing efforts as in the previous fiscal, will help us effectively steer our journey to become the First Choice for a growing customer base. Our efforts at scaling up our digital interface and our people strength will help us build on the resilience of our brand, enabling us to garner a bigger mindshare of our stakeholders. Staying relevant is the mantra of our strategic approach, as we focus on embracing the emerging reality, through a well-balanced bouquet of superior products, supported by a 360-degree customer service proposition. Building on our digital innovation strengths, we shall continue to enhance our customer connect, without compromising our corporate governance standards to make the Federal experience of our stakeholders even more engaging, credible and unique.

All this and more, we hope to accomplish while expanding our community outreach through our CSR initiatives, to create a more enabling environment for the sustenance and development of vulnerable sections, particularly amid the ongoing health crisis. Our ‘Sanjeevani’ campaign – India’s biggest vaccination drive – stands testimony to our commitment to the health, safety and wellbeing of these communities.

We are confident that our indomitable spirit will help us come out of this season stronger, better and more admired.

On this note, on behalf of my colleagues on the Bank’s Board of Directors, I would like to thank our Team led by our dynamic MD & CEO for their unflinching commitment to the Federal vision and goals. We are also deeply grateful to our customers, shareholders and other stakeholders for their unwavering trust in the Bank, inspiring our continuing journey towards greater excellence and value creation.

With best wishes,

Grace Elizabeth Koshie