Dear Shareholders,

On behalf of the Board of Directors, my colleagues at SyndicateBank and also on my personal behalf, I extend a very warm welcome to all of you to this Thirteenth Annual General Meeting of your Bank. It gives me great pleasure to present the Annual Report of the Bank together with the audited financial statements for the financial year ended 31st March 2012.

Even though the year 2011-12 started with great optimism and bullish market sentiments, the Global economy got hit by the world’s biggest financial crisis i.e. euro zone sovereign debt crisis and weakness of the US real estate market, escalating commodity prices, overheating of certain emerging markets, crude oil prices and geo - political tensions leading to slow down in recovery of the global economy.

The country’s GDP is estimated to grow by 6.5% during 2011 – 12 as per the revised estimate of Central Statistics Office of Government of India as against 8.4% registered in FY 2010 – 11, with the inflation continuing to be a dominant factor due to burgeoning crude oil prices, surge in food prices, sharp fall in investments and fall in external demand.

Even in this critical period, I am pleased to announce that your Bank could achieve a better result, which is reflected in our Bank’s Financial Statements.

The highlights of the Bank’s financial performance for the Financial Year 2011 - 12 are outlined below:

• Global Business registered a staggering figure of Rs. 283558 crore in 2011-12, rising from Rs. 243946 crore in 2010-11 registering a growth of 16.24%. Global Deposits grew by 16.48% to Rs. 157941 crore and Global Advances grew by 15.94% to Rs. 125617 crore.
  
  
• Domestic Business of the Bank increased from Rs. 224331 crore in 2010-11 to Rs. 258660 crore in 2011-12 registering a growth of 15.30%.
  
  
• CASA Deposit (domestic) stood at Rs. 46424 crore as at 31.03.2012 constituting 31.43 % of Total Domestic Deposits.
  
  
• Operating Profit of the Bank jumped by 21.71% from Rs. 2749.78 crore in 2010-11 to Rs. 3346.80 crore in 2011-12.
  
  
• Net Profit, zoomed by 25.33% from Rs. 1047.95 crore in 2010-11 to Rs. 1313.39 crore in 2011-12.
  
  
• Priority Sector Advances grew by 12.19% to Rs. 41383 crore during 2011-12 and constituted 45.21% of the ANBC (Adjusted Net Bank Credit) against the mandatory requirement of 40%.
  
  
• Agriculture Credit increased from Rs. 14798 crore in 2010-11 to Rs. 17409 crore in 2011-12 registering a growth of 17.64%.
  
  
• Total Income grew by 32.17% to Rs. 16344.23 crore, whereas non-interest income grew by 17.57% to Rs. 1075.88 crore in 2011-12.
  
  
• Interest Income of the Bank registered a healthy growth of 33.34% from Rs. 11450.86 crore in 2010-11 to Rs. 15268.35 crore in 2011-12.
  
  
• Net Interest Income grew by 16.02% from Rs. 4383 crore in 2010-11 to Rs. 5085 crore in 2011-12.
  
  
• The Net NPA increased from Rs. 1030.84 crore in 2010-11 to Rs. 1185.43 crore in 2011-12 constituting 0.96% of the Net Advances.
  
  
• Net Interest Margin (NIM) improved from 3.40% in 2010-11 to 3.43% in 2011-12.
  
  
• Yield on Advances of the Bank soared to 10.98% as on 31.3.2012 from 9.52% as on 31.3.2011.
  
  
• Provision Coverage Ratio improved from 77.18% as at 31.03.2011 to 80.06% as at 31.03.2012.
  
  
• Book Value per Share improved from Rs. 122.99 in 2010-11 to Rs. 150.13 in 2011-12.
  
  
• The Capital to Risk-Weighted Assets Ratio (CRAR) stood at 12.24% as at 31.03.2012, compared to 13.04% as at 31.03.2011. During the year the Bank received a capital infusion to the tune of Rs. 327 crore from LIC of India.
  
  
  

BRANCH NETWORK

During the year, 214 branches were opened taking the domestic branch network to 2709 comprising 873 rural, 672 semi-urban, 584 urban, 566 metro & port town branches and 14 Ultra small branches.

The Bank has added 30 ATMs during the year to bring the total number of ATMs to 1240 spread across 668 centres throughout the country.

The Bank created history by opening 108 branches across the country on a single day (31-03-2012) which was inaugurated by Shri. Namo Narain Meena, Honourable Union Minister of State for Finance.

The Bank has already made its overseas presence felt by having a Branch in London and managing two exchange houses in Qatar and Sultanate of Oman.

BUSINESS CROSS SECTION:

• Retail lending continues to be the main thrust area of the Bank with the lending level growing by 9.10%.
  
  
• Priority Sector Advances and Agriculture Advances has well surpassed the mandatory levels set by the Government.
  
  
• In tune with the guidelines issued by the Government of India, your Bank has implemented system based identification of non-performing assets for more transparency and effective monitoring.
  
  
• Your Bank has paid special attention for upliftment of women through its various credit programmes.
  
  
• The Advances to minorities and SC/ST beneficiaries have always been a focused attention of your Bank.
  
  
• Your Bank is also participating in “Janashree Bima Yojana” of LIC of India for covering all the women members of SHGs wherein the premium is subsidized by Government of India.
  
  
• Your Bank has always been instrumental in social development activities by earnestly implementing various developmental schemes of the Government under poverty alleviation and employment generation programme.
  
  
• Your Bank has implemented the directions of the Government of India for extending banking facilities by covering 1553 villages under Financial Inclusion Plan for villages above population of 2000.
  
  
• Your Bank has adopted Mewat District in Haryana as Model Financial Inclusion District.
  
  
• Manpower Planning exercise is being carried out by taking into account the Business Plans, Superannuation, Attrition, etc., and assessing the manpower requirement for both medium and long term.
  
  
• Your Bank is in tune with the aspirations of its customers in providing technology driven banking services like internet banking facilities, SMS banking, mobile banking facilities, debit / credit card, cash management services, electronic payment settlement system, payment gateway services and so on.
  
  
• Your Bank had conducted a Uniform Customer Meet on 23-09-2011 by interacting with its customers spread far across the country through video conferencing.
  
  
• Your Bank opened a Business Process Management Centre to do back-office activities like account opening, issuance of cheque books etc. at Bengaluru.
  
  
• While bank is endeavoring to show better performance every year, it also recognizes Corporate Social Responsibility Activities (CSR) as one way of showing good gesture to the society.
  
  
• Your Bank entered into strategic tie ups and alliances with Tata Motors, Karnataka State Public Service Commission, Asit C. Mehta Investment Intermediaries and MasterCard for improving the fee based income of the Bank and for providing value added services to the public / customers.
  
  
• Your Bank was adjudged by NABARD as the ‘Best Performer’ among commercial banks operating in Karnataka for its performance under the ‘Highest Average Loan Size’ category in relation to the SHG - Bank linkage programme.
  
  
• Your Bank aims to achieve a robust growth in its business during the next financial year with a proactive approach in its outlook towards the market and economy.
  
  
• Your Bank has adopted a transparent approach towards market sentiments by interacting with the media and analysts in sharing its achievements and future plans.
  
  
  

Inspite of the tough economic environment, and keeping in tune with the buoyant financial performance of the Bank, your Directors are pleased to recommend a dividend of 38 percent for the financial year 2011 – 12.

THE WAY AHEAD

During the year 2011-12, banking industry had faced various critical challenges, but through sound policies, careful planning and the confidence of staff members and patronage of our huge customer base, we have been fortunate to ride the storm and succeeded in consolidating our growth in the industry. Friends, the future banking is rather more intense and complex and we have to get ourselves ready to face the difficult times and challenging situations with even more vigor and strength.

Your Bank has set target of Rs. 3,50,000 crore milestone in total business and opening of 300 branches to cross the landmark of 3000 branches during the financial year 2012-13.

The Bank has initiated process to establish a separate vertical for (a) Fee based Income and also (b) Mid Corporate segment to cater to their banking/credit requirements.

Bank has also initiated steps for creation of a separate vertical at Corporate Office, Regional Offices to accelerate marketing efforts to augment fee based income.

In order to drive the recovery process aggressively in respect of Special Monitoring Accounts (SMA) and Non Performing Assets (NPA), through a dedicated team supplementing the efforts of branches, Bank has operationalised a focused recovery team called “Stressed Tiny Assets Recovery Team” (START)

Strategically, our focus continues to be on the Retail Banking viz. CASA growth,lending for Housing, MSME, Agriculture, fee based income, reducing NPA level and more retail credit disbursement. The Bank has opted “LEAD” as the corporate theme for the financial year 2012-13 which signifies as under:-

L E A D
Let CASA be our Priority
Endeavour to increase Fee Based Income & Profitability
Attack and bring down NPA
Disburse More Credit under RO/Branch powers

With diversified and multiple business lines, our Bank is recharging for growth for the medium to long term while aiming at long term sustainability and maintaining focus on its core mission and realigning all its strengths. I hope with the support of present proactive management team, dedicated staff members and patronage of our 28 million customers, the targets set will be achieved smoothly further taking this vibrant organization to greater heights of achievements.

ACKNOWLEDGEMENT

I take this opportunity to thank the members of the Board, the Government of India and the Reserve Bank of India for their valuable support and guidance. I thank all our shareholders for the confidence and faith they have reposed in us. I thank all our customers for their continued co-operation and support. I also place on record my appreciation for the dedication and commitment put in by our staff members for enabling the Bank to scale new heights and performance.

Finally, I thank one and all of you for attending this meeting.

With regards,

Yours Sincerely,
Sd/-

(M G Sanghvi)

Chairman & Managing Director