2021-22Annual Report
Let me begin by thanking you for all the support and encouragement over the years. I consider it a privilege to report to you on our progress and share our plans for the years ahead. This being my 12th Annual Report update, I seek your indulgence to use 12 short narratives to outline the development and plans of our bank.
You may have observed that over the years our guiding philosophy has always been to focus on the ‘here & now’ while our eyes are rivetted firmly on the opportunities that lie ahead. Inspired by this practice, this year our Annual Report has been themed as ‘Responsible, Sustainable & Progressive Today for a better Tomorrow’.
Let me elaborate on this theme though the filter of our employees, communities, customers, financial performance, and strategic initiatives that will help create a sustainable franchise that makes us the ‘The Most Admired Bank’ ( MAB ).
We are delighted that for the second year on the trot, we have been ranked in the Top 50 (moved up 21 slots to 26) in the, Great Place to Work® Survey. We are determined to break into the Top 10 very soon. You will be happy to note that COVID or any other challenges will not deter ‘Team Federal’ from ‘Mission Top 10’.
Our commitment to the communities we live and work in is unparalleled. ‘Sanjeevani - A Shot of Life’ was an example of our outreach to so many in the far corners of rural India who may have never benefited from vaccines. The program helped catalyze the government initiatives to create awareness and help vaccinate lakhs of folks who otherwise may have had challenges of inadequate assistance or resources.
The year that went by fetched us many accolades, and in particular the BT-KPMG Best Banks Survey chose us for the second time as the top Bank in two years. Every award is certainly an inspiration and equally a reminder for us to do better work in the period ahead. We are determined to do that, always.
Last year we launched Feddy, our AI powered virtual assistant. Feddy has since grown up! The technology powering Feddy is richer, stabler and more humanlike and is helping us deliver on our mantra of Digital at Fore and Human at Core (DFHC). This doctrine is shaping our successful technology capabilities. Over 230+ RPAs (robotic process automation) and 300+ APIs are helping us both increase productivity and engage meaningfully with a range of Fintech Partnerships.
Our collaborative and bespoke fintech business model helps us widen our reach to newer segments of the markets and has been the hallmark of our partnerships. This model helps us reach out to a myriad of emerging market segments such as new to workforce, new to category, under banked or unorganized segments of the market. We are pleased that our model, while it is focused on ensuring higher standards of security and privacy, is yet intuitive, digital and scalable aided by the use of the finest innovation by our partners.
Our maiden Business Responsibility and Sustainability Report (BRSR) forms a part of this year’s Annual Report. As a socially responsible corporate, you will note that we are making meaningful progress on a host of initiatives as mentioned by our Chairman in his opening remarks. I am personally delighted that The International Finance Corporation – a member of the World Bank Group – chose to invest in our Bank this past year and our ESG focus was one of the primary reasons for them to place their faith in us. Together we believe we can scale new heights in these areas to firmly plant our flag as the torchbearer for robust ESG practices.
In the first half of the last decade, we were focused on our footprint expansion and we added over 500 branches in record time. The second half of the last decade was about consolidation and building efficiency while we were leveraging other distribution channels to ensure we deliver on the ‘Presence to Prominence’ theme as also focusing on being ‘Branch Light and Distribution Heavy’. Now as Covid abates and the need for outreach to newer markets and deeper geographies increased, we have adopted the theme of ‘Lite Branch and Heavy Distribution’. You will see us expand our footprint by over 25%-30% over the next 3 years into newer catchments that provide significant opportunities while we get deeper and heavier on distribution in our existing markets. Clearly, this will aid us in our mission of growing our customer base manifold.
Being recognized as one of the best customer service banks at the India Banking Summit Awards is indeed most gratifying because we are certain that being the Most Admired Bank will happen only if our Net Promoter Score (NPS) is constantly top tier and our efforts to make this happen run deep in the Bank. All our senior team members carry very measurable client experience goals that are constantly reviewed for improvement. We know that awards are only one form of appreciation; the acid test is to get more and more happy clients joining the Federal Family continuously. With the best-in-class CRM solution now in place, FY 23 will see enhanced value propositions for our customers at a time and place when they need it most. The recent Direct Tax payment capability and the plethora of online / Fedmobile /or Feddy assisted capabilities are both intuitive and easy to use now.
For a few years now we have been focusing on introducing new lines of business to ensure our product range is complete and comprehensive to meet the varying client needs. The successful launch of our credit cards and scaling up of our commercial vehicle and our micro finance business is now well underway to ensure that these business lines contribute meaningfully to our revenue in the years ahead.
No commentary on the year that went by would be complete without highlighting some of our key financial achievements. Most noteworthy in FY22 was clearly the quality of our asset portfolio. Our NPA ratios saw a considerable improvement with GNPA declining 61 bps to 2.80% and NNPA by 23 bps to 0.96%. Our CASA ratio improved to 36.94% and we also saw CASA balance grow by 15%. I am confident the years ahead they would only get better.
All our efforts have always been rooted in the principles of ethics and excellence. As mentioned in the message of the Chairman, CY22 saw us formally kickoff our values framework: CARES. We commit to living these values and our performance management system will evaluate the evidencing of Values alongside our financial and compliance performance. This too will ensure we are well on course to becoming MAB.
I have stayed clear of referring to macroeconomic challenges, inflation affected economies etc. by choice! These challenges are both endemic and systemic and not unique to any one institution. Hence, our highly disciplined and focused team has collectively agreed to direct our energies on the controllables by leveraging our strong platform, engaged workforce and digital capabilities to ensure we gain share and deliver on our commitments of enhancing stakeholder value while we continue to use our resources optimally.
In closing let me thank our Board for their exceptional support, guidance, and advice all along the way. I would not be wrong or boastful when I say that Federal Bank Board would rank as amongst the best, if not the best! Their governance standards are exemplar and so is the constant encouragement to do the best for all our stakeholders, always!
Do scan the QR code for a short voice note to thank you as I introduce you to something unique!
Stay Safe and Thank You!