MANAGING DIRECTOR MESSAGE
At Chola, we believe that consistent performance, technology leadership and a strong
focus on developing the potential of our people creates the foundation for long-term
The global economy grappled with challenges for most of the financial year 2013.
Although emerging economies are in better shape compared to their developed counterparts,
growth rates are moderating globally.
The Indian economy witnessed moderate growth during the year. While the
governments policy initiatives during the second half of the year have begun to
address some challenges, it will take time to reflect on the economy. At Chola, we believe
that consistent performance, technology leadership and a strong focus on developing the
potential of our people creates the foundation for long-term growth. Our performance in
2012-13 reinforces our belief. The credit for achieving our objectives for the past year
goes to each and every member of the Chola family.
Last year, Cholas growth was primarily driven by higher disbursements on a wider
branch network and a margin-accretive product mix. Chola has sustained its growth
trajectory without compromising on asset quality. Our total assets under management grew
by 41% from Rs. 13,470 crores in 2011-12 to Rs. 18,999 crores in 2012-13. Our aggregate
disbursements during the year touched Rs. 12,118 crores in 2012-13 as against Rs. 8,889
crores in 2011-12, registering 36% growth. During the year, Chola successfully raised
equity capital of Rs. 3 billion through a qualified institutional placement (QIP).
With the highest ever disbursements, our Vehicle Finance (VF) business has performed
well. Total disbursement by VF stood at Rs. 9,882 crores in 2012-13 - a growth of 35% over
2011-12. Most of the segments in which VF operates have continued to see good growth. The
team increased its market share in Tier-II, Tier-III towns and rural areas. Moreover,
improving the productivity of branches led to a decrease in our cost to income ratio. The
vehicle finance asset book grew by 46%. The business opened 129 new branches and added
90,371 customers during the year. Net Credit Losses (NCL) stood at 0.55%.
Our Home Equity (HE) business delivered another year of strong performance. Total
disbursements by HE stood at Rs. 2,161 crores in 2012-13 -a growth of 41% over 2011-12.
The asset book in home equity stood at Rs. 4,337 crores. NCL stood at 0.28%, one of the
lowest in the industry. This strong performance was driven by a growth in market share, a
strong focus on team building and increased productivity.
To sustain the growth momentum and to offer more products to meet growing customer
needs Chola is piloting a few product extensions: home loans, corporate loans for the MSME
segment and rural finance. Cholas gold loan business completed one year of
operations. The team faced immense challenges given the current environment and our strict
adherence of 60% loan-to-value in gold loans. The book size stood at Rs. 19 crores as on
31 March, 2013.
Our subsidiary businesses saw moderate growth.
On the people front, the Human Resources team rolled out several new initiatives such
as the establishment of a training centre, a customised training calendar and multiple
employee engagement programmes.
Technology is an important facilitator of our growth. Our IT team has contributed
immensely to strengthen our technology architecture. Our mobile-based applications have
enhanced the efficiency of sales and collection. Chola is also working towards increasing
automation levels across branches to drive productivity. MIS applications are being
developed to analyse branch profitability and performance at a product level.
I would also like to acknowledge the contribution of our Treasury team for their
efforts to reduce our cost of funds and strengthen asset-liability management. Our balance
sheet, supported by good credit ratings, enables us to access cost-effective funds.
The Operations team rolled out several key initiatives that improved efficiency and
contributed to customer delight. They have continuously improved productivity every year,
thus delivering higher volumes without any increase in manpower.
The Compliance and Legal team continue their good work, ensuring Cholas adherence
to best-in-class regulatory framework, corporate governance and stakeholder management.
The Risk Management team is focusing on a comprehensive and integrated risk management
framework that includes risk-based pricing, structured reporting and control measures.
Our way forward is clear: continue to "Strengthen our core", encourage
innovation, invest in our people and identify potential growth avenues. These significant
steps will help drive sustainable growth. The financial services industry has a lot of
potential in India and Chola is well placed to exploit this potential.
I am happy to inform you that our Board has recommended a final dividend of Rs. 1 per
share (10% on the face value of Rs. 10 per share) over and above the interim dividend of
Rs. 2.50 per share (25% on the face value of Rs. 10 per share, already paid) taking the
total dividend for the year to Rs. 3.50 per share (35% on the face value of Rs. 10 per
I welcome your feedback and suggestions on what we can do to improve Chola as a
company. Feel free to send me your thoughts and comments at email@example.com.
ed and certain other Murugappa Group companies Joined the Board of Chola in August,