Canara Bank

A Brief Profile of the Bank

Widely known for customer centricity, Canara Bank was founded by Shri Ammembal

Subba Rao Pai, a great visionary and philanthropist, in July 1906, at Mangalore, then a

small port town in Karnataka. The Bank has gone through the various phases of its

growth trajectory over hundred years of its existence. Growth of Canara Bank was

phenomenal, especially after nationalization in the year 1969, attaining the status of a

national level player in terms of geographical reach and clientele segments. Eighties was

characterized by business diversification for the Bank. In June 2006, the Bank completed

a century of operation in the Indian banking industry. The eventful journey of the Bank

has been characterized by several memorable milestones. Today, Canara Bank occupies a

premier position in the comity of Indian banks. With an unbroken record of profits since

its inception, Canara Bank has several firsts to its credit.

These include:

Launching of Inter-City ATM Network

Obtaining ISO Certification for a Branch

Articulation of ‘Good Banking’ – Bank’s Citizen Charter

Commissioning of Exclusive Mahila Banking Branch

Launching of Exclusive Subsidiary for IT Consultancy

Issuing credit card for farmers

Providing Agricultural Consultancy Services

Over the years, the Bank has been scaling up its market position to emerge as a major

'Financial Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint

ventures in India and abroad. As at March 2014, the Bank has further expanded its

domestic presence, with 4750 branches spread across all geographical segments. Keeping

customer convenience at the forefront, the Bank provides a wide array of alternative

delivery channels that include over 6312 ATMs, covering 3572 centres.Several IT

initiatives were undertaken during the year. The Bank set up 102 hi-tech E-lounges in

select branches with facilities like ATM, Cash Deposit Kiosk with voice guided system,

Cheque Deposit Kiosk, Self Printing Passbook Kiosk, Internet Banking Terminal, Online

Trading Terminal and Corporate Website Access. ‘Canara e-Infobook’ – an electronic

passbook and banking related information facility was introduced on mobile platforms -

Android, Windows8 & iOS. The Bank also launched Canara Bank RuPay Debit Card,

Canara Club Card – Debit, Canara Secured Credit Card, Canara Elite Debit Card and

EMV Chip Cards under debit and credit cards. Online Savings Bank and PPF account

opening were introduced during the year. The Bank made several value additions under

internet banking and mobile banking services.

Not just in commercial banking, the Bank has also carved a distinctive mark, in various

corporate social responsibilities, namely, serving national priorities, promoting rural

development, enhancing rural self-employment through several training institutes and

spearheading financial inclusion objective. Promoting an inclusive growth strategy,

which has been formed as the basic plank of national policy agenda today, is in fact

deeply rooted in the Bank's founding principles. "A good bank is not only the financial

heart of the community, but also one with an obligation of helping in every possible

manner to improve the economic conditions of the common people". These insightful

words of our founder continue to resonate even today in serving the society with a

purpose. The growth story of Canara Bank in its first century was due, among others, to

the continued patronage of its valued customers, stakeholders, committed staff and

uncanny leadership ability demonstrated by its leaders at the helm of affairs. We strongly

believe that the next century is going to be equally rewarding and eventful not only in

service of the nation but also in helping the Bank emerge as a "Preferred Bank" by

pursuing global benchmarks in profitability, operational efficiency, asset quality, risk

management and expanding the global reach.

HistoryLate Sri Ammembal Subbarao Pai

Founded as 'Canara Bank Hindu Permanent Fund' in 1906, by late Shri

Ammembal Subba Rao Pai, a philanthropist, this small seed blossomed

into a limited company as 'Canara Bank Ltd.' in 1910 and became

Canara Bank in 1969 after nationalization.

"A good bank is not only the financial heart of the community, but also one with an

obligation of helping in every possible manner to improve the economic conditions of

the common people" - A. Subba Rao Pai.

Founding Principles

1. To remove Superstition and ignorance.2. To spread education among all to sub-serve the first principle.3. To inculcate the habit of thrift and savings.4. To transform the financial institution not only as the financial heart of the community

but the social heart as well.5. To assist the needy.6. To work with sense of service and dedication.7. To develop a concern for fellow human being and sensitivity to the surroundings with

a view to make changes/remove hardships and sufferings.

Sound founding principles, enlightened leadership, unique work culture and remarkable adaptability to changing banking environment have enabled Canara Bank to be a frontline banking institution of global standards.

Significant Milestones 1st July

1906

Canara Hindu Permanent Fund Ltd. formally registered with a capital of 2000

shares of 50/- each, with 4 employees.

1910 Canara Hindu Permanent Fund renamed as Canara Bank Limited

1969 14 major banks in the country, including Canara Bank, nationalized on July 19

1976 1000th branch inaugurated

1983 Overseas branch at London inaugurated Cancard (the Bank’s credit card) launched

1984 Merger of Laksmi Commercial Bank Limited with Canara Bank

1985 Takeover of Lakshmi Commercial Bank Limited Commissioning of Indo Hong

Kong International Finance Limited (now a full fledged branch)

1987 Canbank Mutual Fund & Canfin Homes launched

1989 Canbank Venture Capital Fund started

1989-90 Canbank Factors Limited, the factoring subsidiary launched

1992-93 Became the first Bank to articulate and adopt the directive principles of “Good

Banking”.

1995-96 Became the first Bank to be conferred with ISO 9002 certification for one of its

branches in Bangalore

2001-02 Opened a 'Mahila Banking Branch', first of its kind at Bangalore, for catering

exclusively to the financial requirements of women clientele.

2002-03 Maiden IPO of the Bank

2003-04 Launched Internet Banking Services

2004-05 100% Branch computerization

2005-06 Entered 100th Year in Banking Service. Launched Core Banking Solution in select

branches. Number One Position in Aggregate Business among Nationalized Banks.

2006-07 Retained Number One Position in Aggregate Business among Nationalized Banks.

Signed MoUs for Commissioning Two JVs in Insurance and Asset Management

with international majors viz., HSBC (Asia Pacific) Holding and Robeco Groep

N.V respectively.

2007-08 Launching of New Brand Identity. Incorporation of Insurance and Asset

Management JVs. Launching of 'Online Trading' portal. Launching of a ‘Call

Centre’. Switchover to Basel II New Capital Adequacy Framework.

2008-09 The Bank crossed the coveted 3 lakh crore in aggregate business. The Bank’s 3rd

foreign branch at Shanghai commissioned.

2009-10 The Bank’s aggregate business crossed 4 lakh crore mark.

Net profit of the Bank crossed 3000 crore. The Bank’s branch network crossed the

3000 mark.

2010-11 The Bank’s aggregate business crossed 5 lakh crore mark. Net profit of the Bank

crossed 4000 crore. 100% coverage under Core Banking Solution. The Bank’s 4th

foreign branch at Leicester and a Representative office at Sharjah, UAE, opened.

The Bank raised 1993 crore under QIP. Govt. holding reduced to 67.72% post QIP.

2011-12 Total number of branches reached 3600. The Bank’s 5th foreign branch at Manama,

Bahrain opened.

2012-13 Highest Dividend of 130% paid for the year

2013-14 1027 branches and 2786 ATMs opened during the year. Global business crossed

the`7 lakh crore milestone

Vision & MissionVision

To emerge as a ‘Preferred Bank’ by pursuing global benchmarks in profitability,

operational efficiency, asset quality, risk management and expanding the global reach.

Mission

To provide quality banking services with good customer care, create value for all

stakeholders and continue as a responsive corporate social citizen.

AWARDS AND ACHIEVEMENTS DURING 2013-14

In recognition of the varied initiatives, the Bank was conferred with the following

awards –

Global CSR Excellence and Leadership Awards 2014 from CSR World Congress.

Best Home Loan Provider Award from Outlook Money for 2013.

“Finger Print based Biometric Authorization for CBS” declared as winner for secure IT 2014 award.

The Bank’s Desktop Management System project awarded amongst India’s Best -2013 in 33rd SKOCH Summit.

NFS Operational Excellence Award 2013 - Special Jury Award 2013 by NPCI in recognition of Bank's excellent performance in Key Parameters in respect of ATMs and switch connected to NFS ATM Network.

‘Vigilance Excellence Award’ instituted by M/s Institute of Public Enterprises, Hyderabad, in commemoration of celebrating the Golden Jubilee Year of the Institute, with a view to promote excellence in the field of Vigilance in all the Central as well as State level Public Sector Enterprises, Nationalized Banks and other Financial Institutions.

‘Corporate Collateral Awards’ under various categories by Public Relations Council of India.

Golden Peacock Award for excellence in Corporate Social Responsibility for the year 2013.

Greentech Award for excellence in Corporate Social Responsibility for the year 2013.

Skoch Renaissance Award 2013, with a Medal and Citation for being India's Best-2013.

‘Jury Award for New Initiatives under MSME’ instituted by Chamber of Indian MSME under Banking Excellence Awards 2013. 

Best Bank Award for implementation of Rural Self Employment Training Institutes for the second consecutive year by the Ministry of Rural Development, Govt. of India. Award under Category l & Category II for its two of its exclusive RSETIs at Hassan (Karnataka) and Tiruppur (TN) as best performing RSETIs. 5 of the 27 RUDSETIs co-sponsored by the Bank awarded as best performing RUDSETIs

‘Top Performer in New Demat Accounts Opened’ in banking sector by National Securities Depository Ltd., (NSDL) for the year 2013.

CANARA BANK BAGS ‘Golden Peacock Global Award for Corporate Social Responsibility’ for the year 2013

Golden Peacock Award for Excellence in Corporate Governance 2013.

C&MD was conferred Mahatma Gandhi Pravasi Gold Samman Award during the Global Achievers’ Conclave organized by NRI Welfare Society of India at House of Lords, London.

• FIPS Excellence Award 2013 under DBT Category for the project- "Direct Benefit Transfer LPG (DBTL) 100% implementation in Waynad District". 

‘SKOCH AWARD’ under Corporate Social Responsibility. 

Unity International Foundation conferred "Outstanding Banker of the Decade" Award 

GreenTech Life Time Award for “Excellence in Banking”. 

Asia Pacific HRM Congress 2013 instituted by Institute of Public Enterprises conferred "CEO of the Year" and "CEO with HR Orientation”. 

‘Hindi Rajbhasha Samrakshak Ratna’ Award in Dasham Hindi Mahakumbh Evam Saahitya Conference organized by Parivartan Jan Kalyaan Samiti, New Delhi.

The Bank has been conferred with the Skoch Corporate Social Responsibility Award 2013, India’s Best – 2013 & Skoch Award 2013, India’s Best – 2013 for ICT enabling “Desktop Management System

“Best Bank of the Year Award”, instituted by The Bangalore Management Association (BMA)

“Best Financial Institution”, Category - Gold in the Export Excellence Awards 2013 by the Federation of Karnataka Chamber of Commerce, Bangalore. 

Awarded Institute of Directors’ Fellowship on the eve of Golden Peacock Awards.

Awarded Certificate of Excellence for exemplary CSR Initiative for the project “Strengthening Traditional Art and Culture” under eIndia Awards 2013.

Canara Bank bagged the Best Bank Award for Implementing RSETIs in the Country for the second consecutive year.

BUSINESS PROFILECorporate Banking:

Full service offering to large and mid sized corporations across India including

project and corporate finance, working capital, short-term credit, cash

management and treasury products.

SME Banking:

Comprises mainly of priority sector lending to small-scale industries.

Over 445,950 customers serviced through 42 specialized branches and 15

centralized processing centers.

Priority sector loans were INR259bn and non-priority sector loans were INR69bn

as of Sep 2013.

Retail Banking:

Includes housing, vehicle, personal and education loans, self employed and

corporate employee loans, deposits, credit and debit cards, and services to non-

resident Indians.

Housing loans witnessed y-o-y growth at 41.8% and constitute 44.8% of retail

loan book.

Other Businesses:

Agricultural lending and consultancy services, international banking,

bancassurance, sale of mutual fund products, depositary participant services,

merchant banking and executor, trustee and taxation related services.

CANARA BANK: KEY STRENGTHS

1. Reputation as a customer centric bank

2. Delivering balance sheet growth without compromising margins

3. Thrust on asset quality

4. Pan-India presence with focus on developed regions of India

5. Emphasis on cost control and productivity

6. Benefitting from significant investment in technology

7. Diversified sources of income through increased initiatives

8. Insulated investment profile with consistent yields

9. Sound capital position and high government ownership

10. Profitable since inception with meaningful returns to stakeholders

MARKETING STRATEGIES IN BANKS.To formulate an effective marketing strategy the bankers should know the

following aspects.

The total potential presently available and its present share in the total market for

deposits, advances and other services.

Core customer segments i.e. which customers provide highest profit and business

potential, so that they always get the desired attention.

Core products and services, i.e. which services or products best match the

requirements of customers in general and core customers in particular and provide

high business and profit potential, so that action is taken to improve such products

further to make them more acceptable.

What products are supplementary products and keep the core products and

services, as high business and profit potentials.

Core competitors, i.e. which competitors are posing major threat in serving the

core customer segments and which core products and services are they offering to

the clients, so that if possible, bank can explore the possibility of offering similar

products or services.

Core appeal i.e. which advantage should be offered and communicated to

customers in general to differentiate one’s own organization in terms of pricing,

servicing, conveniences etc.

Potential products to suit the changing environment, so that they meet the change

in customer’s needs over a time period.

Potential customers who could be brought to bank’s fold

Potential competitors who may erode bank’s market share, so that we may take

action to change our strategies in time, to remain the market leader.

Which other products are needed to be introduced to maintain or enhance the

exiting business, so that the customer does not feel the necessity of shifting his

patronage elsewhere.

How strong is the information system in the bank and what needs to be done to

create a prompt and accurate information system which forms core of any

marketing exercise.

Customers like all human –beings, like to deal with people who care. Hence

attitudinal changes particularly in the staff at counter, is needed to understand that

our existence is due to customer and customers is really an important visitor on

our premises.

Other following types of small actions particularly in a branch advising customers

maintaining high balances in their accounts, counseling equity minded customers

for investment, interacting with customers to known their difficulties and

personally attending the needy customers, creating image of the branch by offering

some services, creating social and economical awareness among the people, giving

surprise to customers by calling all customers present in the banking hall over a

cup of tea on some special occasion, say on the foundation day or bankers day or

customers day.

Major Highlights- FY14 Net profit for Q4FY14 at 611 crore up by 49.4% over previous quarter (Q3FY14)

net profit level of 409 crore.

Gross NPA Ratio down to 2.49% from 2.57% as at March 2013 and from 2.79% at

Dec’13.

Net NPA ratio down to 1.98% from 2.18% as at March 2013 and from 2.39% at

Dec’13.

Record Cash Recovery at 5494 crore compared to 4006 crore last year.

Recovery from technically written off accounts at 1247 crore (16.8% of

outstanding amount).

Upgradation at 2853 crore compared to 852 crore last year.

Provision Coverage ratio increased to 60.11% from 57.39% at Dec’13.

Increase in CASA ratio (domestic) to 25.9% from 25.1% last year. Savings

deposits increased to 85536 crore, with a y-o-y growth of 20.2%.

Robust growth in retail business- MSME (35%), MSE (38%), Retail Lending

(45%), Housing Loans (50%), Vehicle Loans (62%) and other personal loans

(58%).

Mandatory norms complied under Priority Credit, Agriculture, MSE (Accounts

and Amount), Minority Communities and Weaker Section.

Core fee income (excluding treasury trading profit) up by 792 crore to 3269 crore

(32% y.o.y) from 2477 crore last year.

Total Business up by 1.24 lakh crore (20.7% y.o.y) to 7.22 lakh crore.

Total Deposits up by 18.2% y-o-y to 4.21 lakh crore.

Advances (net) up by 24.3% y-o-y to 3.01 lakh crore.

Record addition of 1027 branches, taking the total to 4755

Record addition of 2786 ATMs, taking number to 6312.

100% onsite ATMs for all 3728 branches opened upto March 2013.

Record increase in E-transactions to 44% from 27% last year.

Total income for the full year increased by 16.8% y.o.y to 43480 crore.

Income from loans/advances increased by 16.7% to 28457 crore.

Net Int. Income for the FY14 at 8944 crore increased by 13.5% y.o.y and 39.6%

Q.o.Q.

Operating Profit for the full year at 6796 crore, recorded an increase of 15.4%

y.o.y and 38.3% Q.o.Q.

Total provision increased to 4358 crore in FY14 compared to 3018 crore in FY13

with a growth of 44.4%.

Net profit for the full year 2438 crore.

The Board has recommended a dividend of 110% for the full year, including an

interim dividend of 65% declared in January 2014.

Thrust on Asset Quality/NPA reduction, Recovery, CASA, Retail Business & Fee

Income.

Profits and Profitability – Q4 FY14 Operating profit for the quarter at 1882 crore was higher by 10.9% over Q4FY13

( 1698 crore).

Total provision made for the quarter was at 1271 crore compared to 972 crore

provision made in Q4FY13. The provision for NPAs during the quarter was 802

crore as against 346 crore in Q4FY13.

Net profit for Q4FY14 at 611 crore was higher compared to 409 crore for

Q3FY14.

Return on Assets for the quarter stood at 0.54%.

Book Value rose to 520.04 compared to 490.56 as at March 2013.

FY14: Income, Expenditure & Profit Operating Profit for FY14 increased by 15.4% to 6796 crore compared to 5890

crore last year.

Total provision made for the FY14 was at 4358 crore compared to 3018 crore

provision made last year. The provision for NPAs for FY14 was at 2135 crore

against 1861 crore in FY13.

Due to increased total provisioning, Net profit for the full year stood at 2438

crore.

Total income for the full year increased by 16.8% to 43480 crore compared to

37231 crore in FY13.

Income from loans/advances increased by 16.7% to 28457 crore compared to

24380 crore in FY13.

The Bank's non-interest income (including treasury trading profit) for the whole

year increased by 24.7% to 3933 crore compared to 3153 crore in FY13.

Total expenses for FY14 increased to 36684 crore compared to 31341 crore in

FY13.

Operating expenses was at 6081 crore compared to 5142 crore in FY13.

Net Interest Income at 8944 crore increased by 13.5% compared to 7879 crore in

FY13.

Goals: March 2015 Aims to reach an aggregate business figure of 8.5 lakh crore, with a deposit

growth of 16-17% and advances growth of 19-20% as at March 2015.

Plans to take the number of branches from 4755 to 6000 and number of ATMs

from 6312 to 10,000 by Mar’2015.

Opening a branch at Johannesburg (South Africa) in May’14 and plans to open

New York (USA) branch by June’14 and 8 other international centres by March

2015, such as, DIFC (Dubai), Qatar Financial Centre (Qatar), Frankfurt

(Germany), Sao Paulo (Brazil), Dar-es-Salaam (Tanzania), Tokyo (Japan), Abuja

(Nigeria) and Jeddah (Saudi Arabia).

The Bank has identified 11 other centres, such as, Kingsbury, East Ham &

Birmingham (U.K), Mexico City (Mexico), Istanbul (Turkey), Jakarta (Indonesia)

Kigili (Rwanda), Singapore, Auckland (New Zealand), Sydney (Australia),

Ontario (Canada) for opening in the medium term.

Thrust on CASA, NPA and Recovery, Fee Income, Credit–Priority, SME and

Retail to continue.

Technology and business process reengineering initiatives.

Project ‘Shikhar’ aimed at rejuvenating the Bank by focusing on several themes

like energizing branches and customer service, increasing sales from branches,

growing a robust asset base and revamping the operating model is in progress.

Global Management Consulting firm viz., M/s Boston Consulting Group (India)

Private Limited (BCG) is assisting the Bank in this transformation journey.

M/s KPMG Advisory Services Ltd appointed for comprehensive assessment and

to draw roadmap for the Bank’s Subsidiaries/ Associates.

Aiming at Gross NPA ratio approx. 2% and Net NPA ratio approx. 1 -1.25%.

To improve NIM to 2.50%.