Dear Shareholder,

“The secret of change is to focus all of your energy, not on fighting the old, but on building the new”, stated Socrates eons ago. These pearls of ancient wisdom resonate in my mind, as I sit down to pen my maiden message to you. It is indeed a privilege to be Chairman of this great organization as it transits from the familiar terrain of conventional banking to the exciting, yet unchartered waters of digital banking, while yet retaining the core of what we are. And I wish to thank everyone for reposing their faith in me and the Board of Directors at this time of churn and change.

The year 2016-17 was an eventful year for the world in general and for India in particular. And these groundbreaking events took all of us by surprise. From the unanticipated outcome of the American Presidential election to the momentous demonetization drive in India, from Brexit to the continuing upheaval in West Asia, the year witnessed a steady stream of tumultuous events. This maelstrom threw up formidable challenges as well as unprecedented opportunities for the sector. And I am glad to tell you that your bank weathered the storm with aplomb and, in fact, rode the crest of this wave to deliver a story of consolidation and growth.

It is profoundly satisfying to note that on many key performance parameters such as profitability, EPS and dividend your bank could post impressive numbers. In the year 2016-17, your Bank''''s Operating profit recorded a commendable growth of 35.20% to reach Rs.1924.93 Cr. while the Total Business registered a growth of 24.58% to reach Rs.171000.84 Cr. While the Deposit portfolio increased by 23.36% from Rs.79171.71 Cr as on 31st March 2016 to Rs.97664.56 Cr as on 31st March 2017, Total Advances grew by 26.25% to reach Rs.73336.28 Cr. On the asset side, Retail advances recorded a growth of 27.08% to Rs.21793.62 Cr and corporate advances went up by 33.54% to Rs.27158.70 Cr. These figures abundantly reflect the intrinsic strength and stability of your bank. They clearly convey that after years of consolidation, your bank is now well positioned to step up on growth.

As business becomes more digitally intensive, organizations must innovate quickly and effectively to keep pace with competitors and remain relevant to customer. So our unceasing endeavor to re-skill ,reboot and reposition ourselves continued in the past year as well. In unambiguous terms we demonstrated our digital expertise last year with the launch of Lotza, the UPI app. It''''s gratifying to note that Lotza gained traction swiftly and emerged as one of the popular UPI apps in India. Apart from Lotza, our other digital products too are witnessing a sharp spike in the number of downloads and new users. Put these digital jigsaw pieces together and an inspiring picture of a future-ready bank emerges.

However, our digital forays will never mean that conventional banking will ever diminish in importance for us. We firmly believe that our commitment to delight a customer who walks into our premises should be as high as our endeavor to delight a customer who clicks on a Federal Bank app. For us, a perfect marriage of conventional and digital banking is the way forward.

Your bank is privileged to have a board of directors that guides the organization with a remarkable mix of foresight, wisdom and ethics. The bank''''s unwavering commitment to its founding values served the bank well and this moral compass has enabled the bank to maintain a squeaky clean reputation. In February this year, Mr. Sudhir Joshi retired from the Board, after serving the bank exceptionally well as one of its directors. Mr. Joshi retired upon completing his tenure at the bank. On behalf of the board, I wish to express my deep gratitude to Mr. Joshi.

There is no greater motivation for us than the confidence you continue to repose in us. I would like to reiterate that in an increasingly uncertain global economic world, we never lose sight of the reason we are here: to serve our customers, to offer best in class products, help communities and, of course, to continuously repay the trust that you, our shareholders, place in us. Our clear focus on customer delight and continuous up gradation of skills were critical to delivering healthy profits - despite a highly volatile and challenging business environment. But this is the past and your bank will not rest on its laurels! Presently, we are at a to customers. So, our unceasing endeavor to re-skill, reboot and reposition stage where we are defining the future and will then build it on the strong foundations of the past.

While mapping the future is an easy thing, achieving that future is what differentiates the ''''Great'''' and ''''Good'''' organizations. I am reminded of James C Collins, who often quoted the saying “good is the enemy of the great”. So, the question staring at us is this: Why should we settle for less? We should not happily settle for something that is merely ''''good''''. We should aspire for the great. That will propel our organization into a higher orbit of success and accomplishment. Let us all move forward as one team, with this vision and achieve this goal.

Let me take this opportunity to express my sincere thanks to our esteemed shareholders, customers, employees and all stake holders for their unstinted support. We look forward to your continued co-operation as the bank steps into a new horizon, full of new potential and possibilities.

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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