GLOBAL AND DOMESTIC ECONOMIC ENVIRONMENT

The global economy faced fresh challenges during FY 2025 26 due to heightened geopolitical tensions, particularly the conflict in West Asia, supply chain disruptions, elevated energy prices, and persistent trade uncertainties. These developments increased volatility in global financial markets and created renewed concerns over growth and inflation across major economies.

Taking into account these prevailing global conditions, the latest estimates of the International Monetary Fund project global growth at 3.1% in 2026 and 3.2% in 2027, reflecting the impact of geopolitical conflicts, elevated commodity prices, and financial market adjustments.

Amidst the uncertain global environment, India continued to demonstrate strong macroeconomic resilience supported by robust domestic demand, sustained investment, ongoing structural reforms, and a healthy financial sector. India's real GDP growth for FY 2025-26 is estimated at 7.6%. Looking ahead, the Reserve Bank of India has projected GDP growth of 6.6% for FY 2026-27 in its June 2026 policy and kept the policy repo rate unchanged at 5.25% while continuing with a neutral policy stance.

As per the latest available data of March 2026, India's banking sector continued to remain strong and resilient. Scheduled Commercial Banks reported Capital to Risk Weighted Assets Ratio (CRAR) of 17.68%, well above regulatory requirements. Asset quality improved further with Gross NPA declining to 1.73% and Net NPA to 0.40%. Liquidity Coverage Ratio (LCR) remained comfortable at 123.70%. Annualised Return on Assets (RoA) and Return on Equity (RoE) stood at 1.33% and 13.06%, respectively, while Net Interest Margin (NIM) stood at 3.26%.

Among Public Sector Banks, financial parameters also remained robust as of March 2026, with Gross NPA at 1.93%, Net NPA at 0.39%, Return on Assets (RoA) at 1.10%, and Net Interest Margin (NIM) at 2.84%, reflecting sustained improvement in asset quality, profitability, and operational efficiency.

Bank credit growth remained broad-based at 13.8% year-on-year as compared to 11.0% a year ago. Deposit growth also remained healthy, with aggregate deposits of Scheduled Commercial Banks growing by around 10.8% year-on-year supporting continued credit expansion and liquidity stability in the banking system.

Despite elevated global uncertainties, India's strong macroeconomic fundamentals, prudent monetary and fiscal policies, digital transformation, infrastructure development, and commitment to inclusive growth position the economy favorably to sustain growth momentum. Supported by strong capital buffers, improved asset quality, adequate liquidity, and expanding digital adoption, the Indian banking sector remains well-positioned to support investment, financial inclusion, and the nation's long-term economic aspirations.

FINANCIAL PERFORMANCE

The Bank continued its strong growth momentum in business, profitability, asset quality, operational efficiency, and customer acquisition during the financial year ended

March 31, 2026, delivering one of its best-ever financial performances and further strengthening its position among Public Sector Banks.

The Bank's Total Business increased by Rs.1,16,657 crore to Rs.6,78,614 crore as on March 31, 2026 fromRs.5,61,957 crore in the previous year, registering a robust growth of 20.76%. Gross Advances grew by 24.16% to Rs.3,10,423 crore, while Total Deposits grew by 18.03% to Rs.3,68,191 crore, reflecting strong and broad-based business expansion.

On the liability side, the Bank continued to strengthen its granular and low-cost deposit franchise. Savings Bank deposits registered strong growth of 15.30%, increasing by Rs.16,530 crore from Rs.1,08,035 crore to Rs.1,24,565 crore during the year. CASA deposits increased by 10.85% to Rs.1,50,936 crore, while Retail Term Deposits recorded healthy growth of 17.81% to Rs.1,83,601 crore. The Bank maintained a strong low-cost deposit profile with Domestic CASA ratio of 41.46%, while high-cost bulk deposits were contained below 6% of total deposits. Significantly, CASA and Retail Term Deposits together contributed 94% of total deposits, demonstrating the strength and stability of the Bank's retail deposit franchise.

The Bank reported its highest-ever annual Net Profit of Rs.5,208 crore as against Rs.3,335 crore in the previous year, registering an impressive growth of 56.16%. Notably, the Bank delivered net profit of above Rs.1,000 crore in all four quarters of FY 2025-26, increasing sequentially from Rs.1,111 crore in Q1 to Rs.1,505 crore in Q4, reflecting consistency and sustainability in earnings.

The Net Interest Income (NII) increased by 15.46% to Rs.12,574 crore, while Operating Profit crossed the landmark Rs.10,000 crore and increased by 15.40% to Rs.10,026 crore. Operating Income increased by 10.80% to Rs.18,210 crore. Despite cumulative repo rate cuts of 125 bps, the Bank maintained healthy margins with Global NIM at 3.21% and Domestic NIM at 3.33%. The Bank's profitability ratios continued to strengthen, with RoA improving from 0.92% to 1.23%, remaining above 1% throughout the year, and RoE improving from 16.28% to 20.42%. Further, the Cost-to-Income ratio improved from 47.14% to 44.94%, while Cost of Deposits declined from 5.08% to 4.97%, reflecting improved operating efficiency and effective liability management.

The Bank continued its remarkable journey in asset quality improvement. Gross NPA declined from 2.14% to 1.42%, while Net NPA improved from 0.37% to 0.21%, among the best in the industry. The Bank maintained an industry-leading Provision Coverage Ratio of 97.50%, while Credit Cost remained low at 0.30%.

Fresh slippages during FY 2025-26 reduced significantly by 66% to Rs.1,211 crore from Rs.3,568 crore in the previous year, with Slippage Ratio improving from 1.68% to 0.49%, one of the lowest in the industry. During the year, the Bank recovered Rs.3,576 crore, which was nearly 2.95 times of fresh slippages, reaffirming strong recovery and resolution mechanisms.

The Bank's strategic focus on Retail, Agriculture and MSME (RAM) segments continued to yield strong results. RAM advances increased by 34.91% to Rs.2,45,014 crore and constituted 78.93% of total advances. Within RAM portfolio,

Retail advances grew by 45.12%, Agriculture advances by 39.27%, and Core MSME advances by 23.77%, reflecting diversified and granular credit growth.

The Bank's capital position remained strong, with Capital Adequacy Ratio (CRAR) improving to 19.78%, including CET-1 ratio of 16.94%, significantly above regulatory requirements and among the best in the industry.

The Bank also significantly expanded its customer outreach during the year by adding 163 new branches, 3 Regional Offices, 154 ATM/CRMs, and 2,052 Business Correspondents, further strengthening its commitment towards financial inclusion, customer accessibility, and sustainable growth.

The consistent improvement in business growth, profitability, operating efficiency, asset quality, recovery performance, capital strength, and customer acquisition reaffirms the Bank's transformation into a strong, sustainable, and future-ready institution, well-positioned to create long-term value for all stakeholders.

INCOME AND EXPENDITURE ANALYSIS

The interest received on advances has increased by 19.32% (YoY) to Rs.24,082 Crores for the financial year ended 31^st March 2026 as compared to Rs.20,182 Crores received during the previous financial year ended 31^st March 2025. Interest earned on investments increased by 6.82% to Rs.7,518 Crores in FY 2025-26 as against Rs.7,038 Crores in FY 2024-25. Consequently, total interest income increased by 13.38% to Rs.31,896 Crores in FY 2025-26 as compared to Rs.28,131 Crores in the previous year.

The Bank's non-interest income also registered growth and stood at Rs.5,636 Crores in FY 2025-26 as against Rs.5,545 Crores in FY 2024-25, registering a growth of 1.64%. Accordingly, Total Income increased by 11.45% to Rs.37,532 Crores in FY 2025-26 as against Rs.33,676 Crores in FY 2024-25.

On the expenditure side, interest paid on deposits increased to Rs.16,577 Crores in FY 2025-26 as against Rs.15,008 Crores in FY 2024-25, registering a growth of 10.45%, in line with growth in deposit base. Interest paid on borrowings increased by 22.98% to Rs.2,745 Crores as against Rs.2,232 Crores in the previous year. Consequently, total interest expenses increased by 12.07% to Rs.19,322 Crores in FY 2025-26 from Rs.17,241 Crores in FY 2024-25.

Despite business expansion and branch network growth, the Bank maintained strong cost discipline. Operating Expenses increased moderately by 5.64% to Rs.8,184 Crores as against Rs.7,747 Crores in the previous year, which was lower than the growth in operating income, reflecting improved operating efficiency. Staff expenses remained largely stable at Rs.4,689 Crores, while other operating expenses stood at Rs.3,495 Crores during the year. Total expenses increased by 10.08% to Rs.27,506 Crores in FY 2025-26 as against Rs.24,988 Crores in FY 2024-25.

The Net Interest Income (NII) increased by 15.46% on YoY basis to Rs.12,574 Crores for the year ended 31.03.2026 as against Rs.10,890 Crores for the year ended 31.03.2025.

Operating Income increased by 10.80% to Rs.18,210 Crores, while Operating Profit crossed the significant milestone of Rs.10,000 Crores and increased by 15.40% to Rs.10,026 Crores. The Bank's Cost-to-Income ratio improved from 47.14% to 44.94%, reflecting enhanced operational efficiency and effective cost management.

Despite cumulative policy repo rate reductions of 125 bps during the year, the Bank maintained healthy margins with

Global NIM at 3.21% and Domestic NIM at 3.33%. Improved income profile, efficient liability management, moderation in cost of deposits from 5.08% to 4.97%, and disciplined expenditure management contributed to strong profitability, resulting in the Bank reporting its highest-ever Net Profit of Rs.5,208 Crores, registering a growth of 56.16% over the previous year.

CAPITAL ADEQUACY RATIO

The Bank's Capital Adequacy Ratio continued to remain strong and improved further by 74 basis points to 19.78% as on 31.03.2026 as against19.04% as on31.03.2025, which is significantly above the regulatory requirement, reflecting the Bank's strong capital position and its ability to support future business growth.

The Bank's Common Equity Tier 1 (CET-1) ratio stood at as on 31.03.2026 as against 16.44% as on 3 1.03.2025, while

Tier-II capital ratio improved to 2.84% from 2.60% during the same period. The Bank's total capital funds increased to Rs.39,144 crore as on March 31, 2026 fromRs.32,306 crore in the previous year.

The consistently strong capital buffers, supported by healthy internal profit generation, improved asset quality, and prudent risk management, position the Bank comfortably to support accelerated business growth, meet regulatory requirements, and pursue strategic growth opportunities in the years ahead.

BRANCH NETWORK

The Bank continued to strengthen its physical presence and customer outreach during FY 2025-26. The Bank has 3,494 Domestic Branches as on 31^st March 2026 as against 3,335 Branches as on 31^st March 2025, registering a net addition of 159 branches during the year.

The branch network continues to have a strong presence across rural and semi-urban geographies, supporting the Bank's commitment towards financial inclusion and inclusive economic growth. Out of the total branch network, around

58% of branches are located in Rural and Semi-Urban centres, enabling deeper penetration in underbanked and priority sectors.

The Bank expanded its customer touch points by adding 154 ATM/CRMs and 2,052 Business Correspondents during the year, taking the total customer touch points to 19,336 as on March 31, 2026. The continued expansion of the Bank's physical and alternate delivery channels reinforces its commitment towards customer convenience, financial inclusion, and sustainable business growth.

Capital:

During the year 2025-26, the Bank has not raised equity capital.

The paid-up capital of the Bank stands at Rs.19,256.59 Crore as on 31^st March 2026. The Government of India shareholding stands at 92.44% as on 31^st March 2026.

During the Financial Year 2025-26, Bank has issued Basel III Tier II Bonds (Series VI) aggregating to Rs.1000 Crore through Private Placement basis subscribed by Qualified Institutional Buyers (QIBs).

Dividend:

Board of Directors of the Bank did not recommend any dividend during the Financial Year 2025-26.

Market capitalization of the Bank:

Corporate Governance:

The Board of the Bank is firmly committed to upholding the highest standards of Corporate Governance, both in letter and in spirit. The Bank has established a comprehensive and well-documented framework of policies and practices to ensure effective governance. A detailed report on Corporate Governance is presented in a dedicated section of the Annual Report.

Investor Education & Protection Fund (IEPF):

In accordance with the guidelines issued by the Ministry of Corporate Affairs (MCA), Government of India, the Bank has transferred all unpaid dividend amounts up to the financial year 2013 14 to the Investor Education and Protection Fund (IEPF).

The Bank remains fully compliant with the regulations and directives prescribed by the Regulatory Authorities and the Government of India. Shareholder grievances are addressed promptly and efficiently, ensuring transparency and trust in all dealings.

Directors' Responsibility Statement:

The Directors confirm that, in the preparation of the annual accounts for the year ended 31^st March 2026:

Accounting Standards have been duly followed, together with proper explanations for any material departures, if applicable.

Accounting Policies had been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Bank at the end of the financial year and of the profit and loss of your Bank for that period.

Proper and sufficient care was taken for the maintenance of adequate Accounting Records in accordance with the provisions of the relevant Acts for safeguarding the assets of your Bank and for preventing and detecting fraud and other irregularities.

The Annual Accounts were prepared on a going concern basis.

The Bank has established and maintained adequate Internal Financial Controls, which were operating effectively during the year. For this purpose, “Internal Financial Controls” refers to the policies and procedures adopted to ensure orderly and efficient conduct of business, adherence to policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

Proper systems are in place to ensure compliance with all applicable laws, and such systems have been found adequate and operating effectively.

BOARD OF DIRECTORS

The business of the Bank is vested with the Board of Directors. The MD & CEO and EDs function under the superintendence, direction and control of the Board. The strength as on 31.03.2026 were 10 directors comprising 01 Non-executive Chairman, 03 whole time Directors, 01 GOI Nominee Director, 01 RBI Nominee Director, 03 Part time Non-Official Directors and 01 director elected from amongst the shareholders to duly represent their interest.

Position of the terms of the Directors during the FY 2025-26

*Until Further orders

During the FY 2025-26, the following Directors' tenure ended as below:

ACKNOWLEDGEMENT

The Board of Directors is grateful for the valuable guidance and support received from the Government of India, Reserve Bank of India, Securities and Exchange Board of India (SEBI). Stock Exchanges, State Governments, Financial Institutions, and all Overseas Regulators. The Board of Directors acknowledge with thanks our valued Customers, Employees, Unions, Officers Associations, domestic and international banking group, the shareholders & other stakeholders for their valued support and continued patronage with the Bank.

The Board also wishes to place on record its profound appreciation for the valuable contribution of the Bank's staff at all levels and looks forward to their continued involvement and commitment towards achieving the future goals.