BOB Profile-Sept05

1
Bank of Baroda A Journey of Sustained
Soundness Performance Analysis Q1, 2012-13
(FY13) Dr Rupa Rege Nitsure Chief Economist July
30, 2012
2
Bank of Baroda Key Strengths
Bank of Baroda is a 104 years old
State-owned Bank with modern contemporary
personality, offering banking products and
services to Large Industrial, SME, Retail
Agricultural customers across India and 24 other
countries.
Uninterrupted Record in Profit-making and
Dividend Payment
Overseas Business Operations extend across 24
countries through 93 Offices
Modern Contemporary Personality
Strong Domestic Presence through 3, 913
Branches
Pioneer in many Customer-Centric Initiatives
Provides Financial Services to over 45.16
mln Customers Globally
First PSB to receive Corporate Governance
Rating (CGR-2)
Relatively Strong Presence in Progressive
States like Gujarat Maharashtra
Robust Technology Platform with 100 CBS in
Indian Branches
A well-accepted recognised Brand in Indian
banking industry
3
Results at a Glance ..

• Net Profit up 10.3(y-o-y) to Rs 1,139 crore
• Operating Profit up 23.0 (y-o-y) to Rs 2,253
  crore
• Net Interest Income up 21.8 (y-o-y) to Rs 2,798
  crore
• Total Business up 22.6 (y-o-y) to Rs 6,68,552
  crore
• Total Advances up 23.02 (y-o-y)
• Total Deposits up 22.3 (y-o-y)
• Net NPAs () at 0.65
• Capital Adequacy Ratio at 13.74
• NIM at 2.73 in Global at 3.22 in Domestic
  operations
• ROAA (annualized) at 1.01
• CRAR at 13.74 with Tier 1 at 10.13

4
Domestic Branch Network

• In a years time, the Bank added 504 brs to its
  domestic network comprising 121 in metro 77 in
  urban 204 in semi-urban 102 in rural areas.
• During Q1, FY13, the Bank opened 10 new brs (3
  in metro, 5 in rural one each in urban
  semi-urban) and merged one of its rural branches.
• In the remaining part of FY13, the Bank plans to
  open 572 new brs including 160 brs from its
  Branch Expansion Plan of FY12.
• Newly opened branches in Q1, FY13 are from
  Maharashtra Goa Rajasthan, U.P, Southern
  Eastern states.
• Around 32.6 of the Banks network at the
  end-June, FY13 was situated in rural areas.
• Moreover, the Banks ATM tally improved from
  1,657 at end-June, 2011 to 2,130 at end-June,
  2012.

Regional Break-up of Domestic Branches as on 30th June, 2012 Regional Break-up of Domestic Branches as on 30th June, 2012 Regional Break-up of Domestic Branches as on 30th June, 2012 Regional Break-up of Domestic Branches as on 30th June, 2012
Metro Urban Semi-Urban Rural
877 716 1,046 1,274
5
Robust Technology Platform

• Banks entire domestic, overseas and RRBs
  Framework is CBS-compliant
• All domestic branches are migrated to MPLS
  (Multi-Protocol Label Switching) network. New
  branches are directly opened in MPLS network
• Bank has IT facilities for online/offline account
  opening through Business Correspondents under
  Financial Inclusion.
• Bank has implemented Internet Banking in 12 of
  its overseas territories , notably Oman,
  Tanzania, Uganda, Kenya, Mauritius, Seychelles,
  Botswana, New Zealand, UAE, Fiji, UK Ghana.
• For provision of Safe Online Banking to protect
  customers from Phishing Attacks, the Bank has
  implemented a Fraud Management Solution. A SMS
  alerts facility is also being provided to
  customers
• Bank has implemented a RaidFunds2India solution
  in all its major territories.
• Banks Mobile Banking (Baroda M-Connect) provides
  various facilities to its customers like
  balance-enquiry, mini-statements, linking of
  multiple accounts, funds transfer, bill
  payments, ticket booking, shopping, feedback
  facilities, etc. The IMPS facility is also being
  introduced for its customers.
• Banks Mobile Banking application is available on
  all Leading Brands including Blackberry, Android,
  iPhone and Windows.
• Internet Payment Gateway is implemented by the
  Bank to facilitate E-commerce Transactions in
  multi currencies across the globe.

6
Robust Technology Platform

• Banks ATM Switch is upgraded to handle
  increasing volume of ATM transactions the
  Banks ATM count has increased to 2,130 by 30th
  June, 2012 its ATM switch also supports eight
  international territories.
• Bank has a Facility of Multiple Accounts being
  linked to a single Debit Card (verified by Visa,
  CVV2) and also a Mobile Number registration thru
  ATMs in CBS for the SMS Alerts.
• E-tax payments thru ATMs are also facilitated by
  the Bank and Mobile ATMs are introduced in
  several cities.
• Bank has set up two Contact Centres in Lucknow
  Baroda to address customer queries and grievances
  without much delay.
• Cash Management Solution is implemented to
  provide Operational Support to the Customers
  ALM.
• Anti Money Laundering (AML) is implemented in
  India and 20 of the Banks overseas territories.
• Bank has developed an Integrated Global Treasury
  Solution in its major territories like U.K., UAE,
  Bahamas, Bahrain, Hong Kong, Singapore, Belgium,
  USA and India to reduce the cost of operations
  and improve the funds management.
• A Centralised SWIFT is being implemented within
  India the Banks 22 overseas territories.
• The CTS -Cheque Truncation System is implemented
  in Delhi and a Grid based CTS System is
  implemented in Chennai, Coimbatore and Bangalore.
  

7
Robust Technology Platform

• ACPC (Automated Cheque Processing Centre) for
  centralised Inward / Outward clearing has been
  implemented in Mumbai, Surat and Ahmedabad
  regions of the Bank.
• Back Office functions are centralised in the Bank
  at its City Back Offices ten Regional Back
  Offices (at Baroda, Jaipur, Lucknow, Bhopal,
  Coimbtore, Kolkata, Mumbai, Jamshedpur, New
  Delhi, Pune) to improve the service delivery to
  customers.
• RTGS NEFT straight through processing has been
  implemented for all sponsored RRBs of the Bank.
• Ebiz Suit (EWGL, HRMS CRM) is upgraded to R12
  Platform for better performance.
• Bank has built a State-of-the-Art Data Centre
  conforming to Uptime Institute Tier-3 standard
  and a Disaster Recovery Site in different seismic
  zones to ensure uninterrupted banking services to
  its customers.
• Various Technology projects like Virtualisation,
  Back-up Consolidation RAC (Realtime Application
  Cluster) are being undertaken to support
  increasing business requirement.
• BoB IIT an exclusive IT Training Centre has
  been set up in Ghandhinagar to educate the Banks
  Staff in all IT related products services.

8
Concentration () Domestic Branch Network
9
Pattern of Shareholding 30th June, 2012
As on 30th June, 2012

• Share Capital Rs 412.38 crore
• No. of Shares 411.12 million
• Net worth Rs 27889.31 crore (up 34.2,
  y-o-y)
• B. V. per share Rs 678.37 (up 27.8,
  y-o-y)
• Return on Equity 16.33

• BOB is a Part of the following Indexes
• BSE 100, BSE 200, BSE 500 Bankex
• Nifty, BankNifty, CNX 100, CNX 200, CNX 500
• BOBs Share is also listed on BSE and NSE in the
  Future and Options segment.

10
Indias Macro Health Q1, FY12 to Q1, FY13
Economic Indicator Q1, FY12 Q2, FY12 Q3, FY12 Q4, FY12 Q1, FY13
Real GDP growth () 8.0 6.7 6.1 5.3 NA
Agriculture () 3.7 3.1 2.8 1.7 NA
Industry () 5.7 2.8 0.8 0.7 NA
Services () 10.2 8.7 8.7 7.5 NA
Private Consumption Expenditure growth () (at current market prices) 14.2 14.1 15.2 13.9 NA
Gross Fixed Capital Formation ( to GDP) (at current market prices) 31.2 30.9 27.8 28.6 NA
SCB Credit growth (, Avg Basis) 21.4 20.0 17.9 16.8 17.7
SCB Deposit growth (, Avg Basis) 17.5 18.0 16.8 15.3 13.8
SCB Incremental Credit-Deposit Ratio (, end-period) 51.1 55.0 68.3 84.3 46.6
WPI-Inflation, Core Inflation () (end-period) 9.51 (7.73) 10.00 (7.99) 7.74 (7.91) 7.69 (4.96) 7.25 (4.85)
Trade Balance ( US Billion) 38.90 34.89 45.98 43.83 40.05
Rupee-USD (, end-period) 44.70 48.97 53.10 50.88 55.60
Foreign Exchange Reserves (end-period, US Billion) 315.72 311.48 296.69 294.40 289.99
11
Banks Business Growth (Y-O-Y) Jun07 to
Jun12
12
Banks Profitability Jun07 to Jun12

• During the last five years, the Banks First
  Quarter Net Profit has grown at the rich CAGR of
  28.1 .

13
Banks Asset Quality Jun06 to Jun12
14
Banks Business Performance Jun11 to
Jun12

Particular (Rs crore) Jun11 Mar12 Jun12 Y-O-Y () Change Over Mar11 ()
Global Business 5,45,283 6,72,248 6,68,552 22.6 -1.0
Domestic Business 4,05,156 4,82,211 4,73,825 17.0 -1.7
Overseas Business 1,40,127 1,90,038 1,94,726 39.0 2.5
Global Deposits 3,12,943 3,84,871 3,82,739 22.3 -0.6
Domestic Deposits 2,36,536 2,80,135 2,77,839 17.4 -0.8
Overseas Deposits 76,407 1,04,736 1,04,899 37.3 0.2
Global CASA Deposits 87,221 1,03,524 99,776 14.4 -3.6
Domestic CASA 80,225 92,948 89,551 11.6 -3.7
Overseas CASA 6,996 10,576 10,225 46.2 -3.3

• Share of Domestic CASA was at 32.23 in terms of
  Aggregate Deposits and at 33.72 in terms of Core
  Deposits as on 30th June, 2012.

15
Banks Business Performance Jun11 to
Jun12

Particular (Rs crore) Jun11 Mar12 Jun12 Y-O-Y () Change Over Mar11 ()
Global advances (Net) 2,32,340 2,87,377 2,85,813 23.0 -0.5
Domestic Advances 1,68,621 2,02,075 1,95,986 16.2 -3.0
Overseas Advances 63,719 85,302 89,827 41.0 5.3

Retail Credit Of which 30,934 35,668 32,922 6.4 -7.7
Home Loans 12,910 14,133 14,520 12.5 2.7
SME Credit 28,367 34,512 34,346 21.1 -0.5
Farm Credit 23,211 29,036 27,774 19.7 -4.3
Credit to Weaker Sections 13,248 15,863 15,627 18.0 -1.5
As of Last Reporting Friday
16
Banks Business Performance Jun11 to Jun12

Particular (Rs crore) Jun11 Mar12 Jun12 Y-O-Y () Change Over Dec10 ()
Global Saving Deposits 65,654 74,580 75,562 15.1 1.3
Domestic Savings Deposits 64,162 72,575 73,519 14.6 1.3
Overseas Savings Deposits 1,491 2,004 2,043 37.0 1.9
Global Current Deposits 21,567 28,944 24,214 12.3 -16.3
Domestic Current Deposits 16,063 20,372 16,033 -0.2 -21.3
Overseas Current Deposits 5,505 8,572 8,181 48.6 -4.6
17
Banks Profits NII Apr-Jun, FY12 FY13
Particular (Rs crore) Apr-Jun11 Apr-Jun12 Y-O-Y ()
Gross Profit 1,831 2,253 23.0
Net Profit 1,033 1,139 10.3
Net Interest Income 2,297 2,798 21.8
18
Other Highlights Q1,FY12 versus Q1,FY13
Particular (in ) Q1, FY12 Q2, FY12 Q3, FY12 Q4, FY12 Q1, FY13

Global Cost of Deposits 5.36 5.61 5.65 5.81 5.89
Domestic Cost of Deposits 6.41 6.84 6.90 7.17 7.30
Overseas Cost of Deposits 1.80 1.82 1.96 1.74 1.86

Global Yield on Advances 9.11 9.64 9.45 9.33 9.08
Domestic Yield on Advances 11.23 12.14 12.01 11.71 11.65
Overseas Yield on Advances 3.38 3.37 3.60 3.75 3.52
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Other Highlights Q1, FY12 versus Q1,FY13
Particular (in ) Q1, FY12 Q2, FY12 Q3, FY12 Q4, FY12 Q1, FY13

Global Yield on Investment 7.47 7.58 7.67 7.53 7.71
Domestic Yield on Investment 7.59 7.72 7.79 7.69 7.83
Overseas Yield on Investment 4.86 4.24 4.90 3.84 4.91

Global NIM 2.87 3.07 2.99 2.96 2.73
Domestic NIM 3.39 3.67 3.51 3.44 3.22
Overseas NIM 1.37 1.42 1.64 1.68 1.55
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Key Financial Ratios Q1, FY13

• Return on Average Assets at 1.01
• Earning per Share at Rs 110.80
• Book Value per Share at Rs 678.37
• Return on Equity (ROE) at 16.33
• Capital Adequacy Ratio at 13.74 with Tier I
  Capital at 10.13
• Cost-Income Ratio at 37.21
• Gross NPA ratio at 1.84
• Net NPA ratio too low at 0.65
• NPA Coverage at the healthy level of 79.02
• Incremental Delinquency Ratio at 0.43 for Q1,
  FY13 consistent with a long lasting slowdown in
  industry and weak monsoon so far.

21
Key Productivity Indicators Q1, FY12 versus Q1,
FY13
Particulars Q1, FY12 Q1, FY13
Business per Employee (Rs crore) 12.65 14.79
Business per Branch (Rs crore) 157.45 169.49
Profit per Employee (Rs lakh) 10.26 10.81
Profit per Branch (Rs lakh) 119.30 114.80
22
Non-Interest Income Q1, FY12 and Q1, FY13
(Rs crore) Q1, FY12 Q1, FY13 Change (Y-O-Y)
Commission, Exchange, Brokerage 274.77 275.93 0.4
Incidental Charges 79.55 82.82 4.1
Other Miscellaneous Income 43.76 55.45 55.5
Total Fee-Based Income 398.08 414.20 4.1
Trading Gains 74.02 81.51 10.1
Profit on Exchange Transactions 140.01 192.10 37.2
Recovery from PWO 28.76 82.99 188.6
Total Non-Interest Income 640.87 770.80 20.3
23
Provisions Contingencies Q1, FY12 and Q1,
FY13
(Rs crore) Q1, FY12 Q1, FY13 Absolute Change
Provision for NPA Bad Debts Written-off 131.95 812.11 680.16
Provision for Depreciation on Investment 138.54 75.99 -62.55
Provision for Standard Advances 112.94 3.34 -109.6
Other Provisions (including Provision for staff welfare) 7.62 2.36 -5.26
Tax Provisions 394.37 208.08 -186.29
Total Provisions 785.42 1,101.88 316.46
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Banks Treasury Highlights Q1, FY12

• Treasury Income stood at the level of Rs 273.61
  crore (up 27.8, y-o-y) in Q1, FY13.
• Out of this, Trading Gains Stood at Rs 81.51
  crore in Q1, FY13 despite extremely volatile
  financial market conditions.
• As of June 30, 2012, the share of SLR Securities
  in Total Investment was 83.57.
• The Bank had 85.37 of SLR Securities in HTM and
  13.73 in AFS at end-June 2012.
• The per cent of SLR to NDTL as on 30th June, 2012
  was 25.05.
• While the modified duration of AFS investments is
  2.57 years that of HTM securities is 5.08 years.
• Total size of Banks Domestic Investment Book as
  on 30th June, 2012 stood at Rs 94,504 crore.
• Total size of Banks Overseas Investment Book as
  on 30th June, 2012 stood at Rs 3,943 crore.

25
Overseas Business Q1, FY12

• As on 30th June, 2012, the Overseas Business
  contributed 29.1 to the Banks Total Business,
  23.7 to its Gross Profit and 36.2 to its Core
  Fee income.
• While the Cost-Income Ratio for Domestic
  Operations stood at 41.51 in Q1, FY13, it was
  more favourable at 17.78 for the Banks Overseas
  Operations.
• While the Gross NPA () in Domestic Operations
  stood at 2.56 at end-June, 2012, that for
  Overseas Operations was lower at 0.69.
• The Gross Profit to Avg. Working Funds () for
  Overseas Operations stood at 1.49 in Q1, FY12
  and at 1.62 in Q1, FY13.
• NIM as of Interest Earnings Assets in Overseas
  Operations improved from 1.37 in Q1, FY12 to
  1.55 in Q1, FY13.
• During Q1, FY13, the Bank opened two branches in
  New Zealand, notably at Wellington and Manukau
  and two branches in Uganda, notably at Entebbe
  and Kabale.

26
NPA Movement (Gross) Q1, FY13

Particular ( Rs crore)
A. Opening Balance 4,464.75
B. Additions during Q1, FY13 1,256.66
Out of which, Fresh Slippages 1,221.22
C. Reduction during Q1, FY13 454.62

Recovery 124.92
Upgradation 134.18
PWO WO 195.52
Exchange Difference 52.62
NPA as on 30th June, 2012 5,319.41
Recovery in PWO in Q1, FY12 82.99
27
Sector-wise Gross NPAs Q1, FY12 versus Q1, FY13
Sector Gross NPA () Q1, FY12 Gross NPA () Q1, FY13
Agriculture 4.10 4.66
Large Medium Industries 1.80 1.63
Retail 2.11 2.00
Housing 1.96 1.70
SSI (Mfg) 1.50 4.78
Total MSME 2.50 3.49
Overseas Operations 0.62 0.69
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Cumulative Position of Restructured Assets

• During the past 51 months (1 Apr08 to 30
  June12), the Bank has restructured 86,596
  accounts amounting Rs 15,747.41 crore in its
  Domestic operations.
• Within this, the loans worth Rs 770.57 crore were
  restructured in Q1, FY13 Rs 8,265.41 crore were
  restructured in FY12, Rs 1,597.81 crore were
  restructured in FY11, Rs 2,455.05 crore in FY10
  Rs 2,658.57 crore in FY09.
• For the period of 51 months, out of the total
  amount restructured, Rs 11,918.84 crore (75.7)
  belonged to wholesale banking, Rs 2,195.61 crore
  (13.9) to SMEs, Rs 614.03 crore (3.9) to retail
  and Rs 1,018.93 crore (6.5) to agriculture
  sector.
• About 100 accounts (of Rs 1 crore above)
  restructured on/after 1st Apr, 2008 with
  aggregate outstanding of Rs 1,511.20 crore
  slipped to NPA after restructuring and most of
  them belonged to the SME segment.
• In cumulative terms, the Bank has restructured 88
  accounts in its Overseas operations involving the
  amount of Rs 3,743.84 crore.
• Out of these three accounts were restructured
  during Q1, FY13 involving the amount Rs 32.74
  crore.

29
Sectoral Deployment of Credit at end-June, 2011
Sector share in Gross Domestic Credit
Agriculture 13.9
Retail 16.5
SME 17.2
Wholesale 37.8
Misc. including Trade 14.6
Total 100.0
30
Banks BPR Project - Navnirmaan

• Project Navnirmaan has altogether 18 activities
  covering both BPR Organisational Restructuring,
  aimed at transforming the Banks branches into a
  sales service centres to make possible a
  sustained sales growth, superior customer
  experience and alternate channel migration.
• The most important initiatives are-
• Conversion of all metro urban branches into
  Baroda Next branches within a timeline 1134
  branches rolled out so far across 13 zones 56
  regions
• Creation of automated lean Back Offices like
• City Back Office (Automated cheque processing
  introduced at Mumbai, Surat Ahmedabad)
• Regional Back Office Ten RBOs functioning (one
  in each zone) five RBOs opened during FY13 for
  CASA opening No. of brs linked 1,531 for
  issuance of personalised cheque books no. of
  brs linked 2,590.
• Establishment of two Contact (or Call) Centres
• Introduction of frontline automation Queue
  Management System Cheque Deposit Machines at
  select branches for customer convenience
• Creation of an Academy of excellence Thru
  Training Boot Camps
• Organisational Restructuring Creation of
  Selling roles at branch, R.O. Z.O.

31
Banks BPR Project - Navnirmaan

• The initial impact of Baroda Next migration has
  been observed to be rewarding both in terms of
  increased customer satisfaction CASA growth.
• The said impact has been sustained at 110 Baroda
  Next brs evaluated on sales, customer
  satisfaction, etc., during the first stage of
  evaluation.
• Another evaluation carried out recently at Baroda
  Next brs on (a) customer satisfaction at 177
  brs and (b) employee satisfaction at 171 brs
  showed significant improvement.
• Further evaluation initiatives are on.
• To sustain Sales growth, a new Sales Operating
  Model has been rolled out in 255 brs in Mumbai,
  Surat, Baroda, Ahmedabad, Delhi Kanpur
• Out of 15 Mid Corporate Brs planned, 14 are
  already functional and one more is expected to be
  opened soon.
• Further centralisation initiatives are going to
  be piloted soon to enable the brs to become a
  Sales-cum-Service outlet.
• Banks Hi-Tech City Branch at Hyderabad has been
  transformed into an e-branch.

32
Banks HR Initiatives

• Recruitment 2012-13
• Banks HR Function has focused on hiring efforts
  on a sustained basis to bridge the gap created
  by superannuation and to cater to the Banks
  consistent business growth and branch expansion
• Banks Proposed New Hiring in FY13 3,400
• Probationary Officers 600
• Specialist Officers 150
• Baroda Manipal Trainees 400
• Campus Recruitment 250
• Clerks 2,000
• Bank carried out a three-month long residential
  programme involving massive skills upgradation
  for its new recruits during FY13 with a focus on
  development of key banking skills covering the
  major areas like credit, forex operations, soft
  skills, etc.
• Other path-breaking initiatives in Employee
  Development are
• Baroda Next A comprehensive leadership
  development training covering almost 1,500
  leaders all branch heads of urban/metro branches
  AGMs/DGMs in the Bank
• Project Sparsh A transformational HR project
  focusing on talent management, succession
  planning, creation of a scientific staffing model
  manpower planning, capability building
  performance management.
• Baroda-Manipal School of Banking An innovative
  new channel of resourcing of trained manpower
  in the Bank. Around 180 students are being
  inducted in this school every quarter for a
  focused grooming and a one-year full-time PG
  Course in Banking that is tailored to the Banks
  specific requirements.

33
Future Outlook Guidance

• The ongoing industrial slowdown, deficient
  monsoon continued stresses in the global
  economy imply that Indias growth could be in the
  band of 6.0 to 6.2 in FY13.
• According to the latest assessment by ICRA Ltd.,
  Nominal GDP for India will expand by 14.0, Bank
  Deposits by 13.515.0 and Bank Credit by
  13.0-14.5 during FY13.
• Credit offtake growth is expected to be muted in
  FY13, given the weak investment sentiment,
  substantial borrowing programme of GoI, the
  expected size of the borrowings to be raised by
  State Governments and the anticipation for muted
  deposit growth in FY13.
• Bank of Baroda will continue with its cautious
  stance and try to grow at 1.0 to 1.5 over the
  banking industrys average growth, given its
  strong presence in the industrially progressive
  states and the support it receives from its
  overseas operations.
• Strategic thrust will be on protecting the
  Financial Soundness that the Bank has
  consistently maintained throughout the past four,
  post-global-crisis years.
• With a primary focus on risk management,
  improvement of systems controls, liquidity and
  capital strength, development of human capital
  and customer-friendly branch structures, etc.
• To quote Michael Porter (Harvard University),
  The ability to change constantly and effectively
  is made easier by high-level continuity.
• Bank of Barodas proven track record in
  high-level continuity would help it tide over the
  present long stretched downturn quite
  effectively.
• Thank you.