The banks NPAs came down to 12.54 per cent from 15.09 per cent. Net NPAs stood at Rs 866 crore against Rs 860 crore. The accretion to NPAs during the year was Rs 61 crore against Rs 156 crore in the previous year.

Chairman and managing director Harbhajan Singh on Wednesday said the improved performance was the result of lower overall cost of funds which came down from 7.97 per cent to 7.77 per cent, reduction in non-performing assets (NPAs) and recovery of derecognised interest and better yield on investments.

Singh said the bank had recovered Rs 254 crore of NPAs (including write-offs of Rs 100 crore) against Rs 242 crore in 1997-98. The provisioning for the year amounted to Rs 98.68 crore (including Rs 7.7 crore onaccount of depreciation in investments) against Rs 108 crore in 1997-98.

The bank's capital adequacy was 10.38 per cent on March 31,1999 against 11.64 per cent in the previous year.

Singh said the bank had received board clearance for a tier-II issue of Rs 100 crore plus a greenshoe option of Rs 25 crore in the current year itself.

During 1998-99, interest income and operating profit as percentage of average working funds were 9.68 per cent and 1.42 per cent respectively. Return on assets was 0.77 per cent against 0.85 per cent in 1997-98. Business per employee improved to Rs 90 lakh from Rs 77 lakh in the previous year.

The bank's total income improved to Rs 1,803.75 crore from Rs 1,624.89 crore. Interest earned increased by Rs 176 crore to Rs 1,580.47 crore while other income increased to Rs 223.28 crore from Rs 220.36 crore. The bank has approved a dividend of Rs 27.14 crore to the Government.

Interest paid on deposits increased from Rs 959.02 crore to Rs 1,087.87 crore. The absolute spreadimproved by Rs 48 crore from Rs 428.02 crore to Rs 476.44 crore. However, the spread as a percentage of average working funds declined marginally from 2.97 per cent to 2.89 per cent, Singh disclosed.

Singh said though the yield on advances had dropped to 11.01 per cent from 12.20 per cent, the yield on investments had gone up from 10.99 per cent to 11.19 per cent.

Investments increased by 11 per cent to Rs 7,161 crore and 79.99 per cent of investments were marked to market. Total deposits of the bank grew by 14.5 per cent to Rs 15,510 crore from Rs 13,541 crore. The share of current account and savings account in aggregate deposits increased to 9.4 per cent and 33.1 per cent respectively. As a result, the cost of deposits came down from 7.95 per cent to 7.76 per cent.

Advances grew by 18.8 per cent to Rs 7,321 crore from Rs 6,160 crore. Priority sector credit at Rs 2,991 crore on March 31,1999 formed 41.4 per cent of net bank credit.