Performance Analysis: Q3 & Apr-Dec , FY11 Bank of Baroda Bank of the Year, 2010 : India (by Banker, London) Performance Analysis: Q3 & Apr-Dec , FY11 Dr Rupa Rege Nitsure Chief Economist January 28, 2011

Bank of Baroda: Key Strengths Bank of Baroda is a 102 years old State-owned Bank with modern & contemporary personality, offering banking products and services to Large industrial, SME, retail & agricultural customers across the country. Modern & Contemporary Personality Uninterrupted Record in Profit-making and Dividend Payment Overseas Business Operations extend across 25 countries through 82 Offices Strong Domestic Presence through 3, 259 Branches Pioneer in many Customer-Centric Initiatives Provides Financial Services to over 38 mln Customers Globally First PSB to receive Corporate Governance Rating (CAGR-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

Domestic Branch Network Bank’s network of domestic branches as on 31st Dec., 2010 was 3,259 & no. of ATMs were 1,521. During Apr-Dec, FY11, Bank opened 161 new branches and merged two existing branches. Bank proposes to open 250 branches in Q4, FY11 with 81 in Metro, 48 in Urban, 98 in Semi-Urban & 23 in Rural areas. Bank has a well-crystalised plan to open 614 branches during FY12. Newly opened branches till end-Dec’10 are well-diversified across India with more thrust on Northern & Gujarat zones. Around 35.6% of Bank’s network is situated in rural areas. Regional Break-up of Domestic Branches as on 31st Dec, 2010 Metro Urban Semi-Urban Rural 703 607 789 1,160

Robust Technology Platform As on 31st Dec. 2010, the entire domestic branch network, that is 3,259 branches and 25 extension counters of the Bank were on CBS. Additionally, 50 branches of 15 overseas territories and 28 branches of eight overseas subsidiaries are on the CBS, covering 98.7% of the Bank’s overseas network. The CBS implementation of the Bank’s RRBs commenced during FY11 & so far roll-out is done in 305 of 1,207 branches of five RRBs. Bank’s Retail & Corporate Customers enjoy several facilities under internet banking such as fund transfers to self & third party; online payment of bills & taxes, rail-ticket booking, temple donations, online subscription to IPOs/FPOs thru’ ASBA & institutional fee payment. Additionally, Bank also offers phone banking, online money transfer services, SMS alerts, Cash Mgmt services, online institutional trading, etc. As on 31st Dec, 2010, Bank had 1,521 ATMs – 963 Onsite ATMs & 558 Offsite ATMs. Mobile ATMs have been introduced in Ahmedabad, Pune, Lucknow & New Delhi. Bank has implemented Multiple Accounts being linked to a single Debit Card (verified by Visa, CVV2) and also a Mobile Number registration thru’ ATMs in CBS for SMS alert.

Robust Technology Platform Around 16 merchants have been registered under Internet Payment Gateway with average transactions of 75 per day. On 28th Oct 2010, a Credit Card Mgmt System was made live; SMSs are generated online for all types of transactions like purchases, e-com transactions, etc. & e-statements are being sent to customers. Anti Money Laundering (AML) has been implemented in India & 20 overseas territories. Payment Messaging Solution (PMS) is implemented in 20 overseas territories & all authorised branches in India. All Back Office functions are effectively centralised in Bank of Baroda with the implementation of City Back Offices and five Regional Back Offices. Bank has developed a Software for National Rural Health Mission (NRHM) for Gujarat & Rajasthan states. Bank has also taken a Green Initiative for implementation of Solar Power General System in 64 branches.

Concentration (%): Domestic Branch Network

Pattern of Shareholding: 31st Dec, 2010 As on 31st Dec., 2010 Share Capital Rs 365.53 crore No. of Shares 364.27 million Net worth Rs 16,741.03 crore B. V. per share Rs 459.58 Return on Equity (annualised) 23.47% BOB is a Part of the following Indexes BSE 100, BSE 200, BSE 500 & Bankex Nifty Junior, BankNifty, CNX 100, CNX 500 BOB’s Share is listed on BSE and NSE in ‘Future and Options’ segment also.

Comparative Performance of BoB Stock: Dec’09 to Dec’10 Index/Stock Value (31st Dec’09) (31st Dec’10) % Change Sensex 17,464.81 20,509.09 17.4% Nifty 5,201.05 6,134.50 17.9% Bankex 10,030.80 13,379.73 33.4% BankNifty 9,029.50 11,791.45 30.6% BoB-BSE 511.30 896.50 75.3% BoB-NSE 513.95 896.70 74.5%

Awards & Accolades Bank of Baroda has received several awards during the year FY11 so far, for its consistent outstanding performance (both business & financial), superior management, dedication to excellence and contribution to rural economy & financial inclusion. It is the only Indian bank whose “Rank” improved by 69 notches in just a year’s time from 283 to 214 in the Banker’s (London) Top 1,000 World Banks for the year 2010 and was selected as the Best Bank from India for the year 2010. To name a few select awards, (1) Bank of the Year for India by the Banker Awards (London) (2) Business India’s “Best Bank” award for the year 2010 (3) Dainik Bhaskar-DNA India Pride Award 2010 – A Silver Trophy (4) Dalal Street-KPMG DSIJ PSU Award 2010 (5) Runner Up in Financial Express Best Bank Awards under the Nationalised Bank Category (6) Innovative Brand Builder Award by CMO Asia Awards, Singapore (7) Skoch Challenger Award for “Bank of the Year” (8) National Award 2010 – for Excellence in the field of Khadi & Village Industries Central Zone for PMEGP (9) Skoch Financial Inclusion Award- 2011 (in Jan 2011) (10) President Zuma Award – For Outstanding Contribution to Advancement of South Africa at Durban (in Jan 2011) (11) Banker of the Year -2010 (Announced today)

Indian Macro Scene during Dec’09 to Dec’10

Emerging Macro Backdrop The IMF’s latest Global Update (Jan 25) projects world output to expand by 4.5% in 2011 – a slight upward revision However, the world is in a two-speed economic recovery, with advanced economies still recovering slowly and EMEs & even some low-income countries relatively buoyant According to the RBI’s latest assessment, India’s robust broad-based growth has put the economy back on its higher growth trajectory but sectoral imbalances pose risks to inflation Weaknesses still persist in non-cereal food sector, core infrastructure sector, consumer non-durables, etc. While several Business Optimism surveys exhibit optimism and private consumption expd. & gross capital formation have emerged as the key growth drivers, downside risks to growth remain in the form of Sovereign debt risks spreading from Euro zone, which may adversely affect demand for exports Strong capital inflows beyond the absorptive capacity of Indian economy may result in over-valuation of rupee & affect price competitiveness of exports Rising domestic cost pressures and likely adverse impact on industrial growth Subdued growth in core industrial sector Persistent inflation and pressure on the RBI to raise rates. Likely pressures on fiscal balances in the absence of one-off gains

Bank’s Business Growth (Y-O-Y): Dec’05 to Dec’10

Bank’s Profitability: Apr-Dec, FY06 to Apr-Dec, FY11 During the last five years, Bank’s Nine-Monthly Net Profit has grown at the robust CAGR of 36.7%.

Bank’s Asset Quality: Dec’04 to Dec’10 Gross NPA Net NPA

Bank’s Business Performance: Dec’09 to Dec’10 Particular (Rs crore) Dec’09 Mar’10 Dec’10 Y-O-Y (%) Change Over March (%) Global Business 3,71,288 4,16,080 4,88,721 31.6 17.5 Domestic Business 2,82,159 3,16,926 3,67,417 30.2 15.9 Overseas Business 89,129 99,153 1,21,304 36.1 22.3 Global Deposits 2,15,117 2,41,044 2,81,512 30.9 16.8 Domestic Deposits 1,66,159 1,85,283 2,15,378 29.6 16.2 Overseas Deposits 48,958 55,762 66,134 35.1 18.6 Global CASA Deposits 66,584 71,468 81,996 23.2 14.7 Domestic CASA 61,385 66,024 75,632 14.6 Overseas CASA 5,199 5,444 6,364 22.4 16.9 Share of Domestic CASA was healthily protected at 35.12% despite a sharp rise in interest rates on term deposits.

Bank’s Business Performance: Dec’09 to Dec’10 Particular (Rs crore) Dec’09 Mar’10 Dec’10 Y-O-Y (%) Change Over March (%) Global advances (Net) 1,56,171 1,75,035 2,07,209 32.7 18.4 Domestic Advances 1,16,000 1,31,644 1,52,039 31.1 15.5 Overseas Advances 40,171 43,392 55,170 37.3 27.1 Out of Gross Domestic Credit, Retail Credit Of which: 22,301 24,248 29,606 32.8 22.1 Home Loans 9,810 10,313 11,895 21.3 15.3 SME Credit 20,233 21,111 25,255 24.8 19.6 Farm Credit 18,803 21,617 23,117 22.9 6.9 Credit to Weaker Sections 10,041 10,945 12,471 24.2 13.9

Bank’s Business Performance: Dec’09 to Dec’10 Particular (Rs crore) Dec’09 Mar’10 Dec’10 Y-O-Y (%) Change Over March (%) Global Saving Deposits 49,542 52,544 61,540 24.2 17.1 Domestic Savings Deposits 48,175 51,258 60,092 24.7 17.2 Overseas Savings Deposits 1,367 1,286 1,448 5.9 12.6 Global Current Deposits 17,042 18,924 20,456 20.0 8.1 Domestic Current Deposits 13,210 14,766 15,540 17.6 5.2 Overseas Current Deposits 3,832 4,158 4,916 28.3 18.2

Bank’s Profits & NII: Oct-Dec, FY10 & FY11 Particular (Rs crore) Oct-Dec’09 Oct-Dec’10 Y-O-Y (%) Gross Profit 1,264.95 1,851.20 46.4 Net Profit 832.5 1,068.9 28.4 Net Interest Income 1,601.23 2,292.26 43.2 The Bank’s NII grew sequentially from Rs 1,744.95 crore in Jan-Mar’10 to Rs 1,857.99 crore in Apr-Jun’10 to Rs 2,038.14 crore in Jul-Sept’10 to Rs 2,292.26 crore in Oct-Dec’10 on the back of a healthy growth in credit and prudent management of liabilities.

Other Highlights: For Last Few Quarters Particular (in %) Q3, FY10 Q4, FY10 Q1, FY11 Q2, FY11 Q3, FY11 Global Cost of Deposits 4.69 4.42 4.39 4.50 4.53 Domestic Cost of Deposits 5.36 5.08 5.09 5.27 Overseas Cost of Deposits 2.24 2.06 1.95 2.02 1.94 Global Yield on Advances 8.60 8.23 8.17 8.40 8.58 Domestic Yield on Advances 10.21 9.76 9.79 10.17 10.34 Overseas Yield on Advances 3.96 3.74 3.67 3.75 3.70

Other Highlights: For Last Few Quarters Particular (in %) Q3, FY10 Q4, FY10 Q1, FY11 Q2, FY11 Q3, FY11 Global Yield on Investment 6.65 6.51 6.66 7.06 7.39 Domestic Yield on Investment 6.87 6.72 6.83 7.24 7.56 Overseas Yield on Investment 3.76 3.68 3.71 3.85 Global NIM 2.95 2.97 2.90 3.02 3.20 Domestic NIM 3.40 3.50 3.43 3.62 3.82 Overseas NIM 1.37 1.30 1.31 1.33 1.40

Key Financial Ratios : Apr-Dec, FY10 and Apr-Dec,FY11 Return on Average Assets at 1.30% [1.20% in Apr-Dec, FY10] Earning per Share (annualised) at Rs 107.88 [Rs 78.78 in Apr-Dec, FY10] Book Value per Share at Rs 459.58 [Rs 371.47 in Apr-Dec, FY10] Return on Equity (ROE) at 23.47% [21.20% in Apr-Dec, FY10] Capital Adequacy Ratio at 12.45% with Tier I Capital at 7.70% Cost-Income Ratio declined from 46.26% to 38.31% (Y-o-Y) Gross NPA ratio declined from 1.43% to 1.32% (Y-o-Y) Net NPA ratio marginally increased from 0.31% to 0.36% (Y-o-Y). NPA Coverage at the healthy level of 85.45% (with technical write-offs) Incremental Delinquency Ratio at 0.91% (annualised) in Apr-Dec, FY11.

Key Productivity Indicators (Quarterly) Q3, FY10 Q4, FY10 Q1, FY11 Q2, FY11 Q3, FY11 Business per Employee (Rs cr) 9.90 10.68 11.42 12.00 12.44 Business per Branch (Rs cr) 119.85 132.17 139.59 142.26 147.65 Profit per Employee (Rs lakh) 2.22 2.32 2.64 2.72 Profit per Branch (Rs lakh) 26.87 28.78 27.22 31.34 32.29

Non-Interest Income: Q3, FY10 and Q3, FY11 (Rs crore) Q3, FY10 Q3, FY11 % Change (Y-O-Y) Commission, Exchange, Brokerage 230.92 244.54 5.9 Incidental Charges 82.25 74.11 -9.9 Other Miscellaneous Income 42.97 64.17 49.3 Total Fee-Based Income 356.14 382.82 7.5 Trading Gains 139.30 84.77 5.6 Profit on Exchange Transactions 98.71 147.09 -14.1 Recovery from PWO 65.50 61.47 -6.2 Total Non-Interest Income 659.65 676.15 2.5

Provisions & Contingencies: Q3, FY10 and Q3, FY11 (Rs crore) Q3, FY10 Q3, FY11 % Change (Y-O-Y) Provision for NPA & Bad Debts Written-off 242.95 206.42 -15.0 Provision for Depreciation on Investment -21.56 53.45 -- Provision for Standard Advances 17.35 36.91 112.7 Other Provisions (including Provision for staff welfare) 3.75 7.28 94.1 Tax Provisions 189.97 478.26 151.8 Total Provisions 432.46 782.32 80.9

Bank’s Treasury Highlights: Q3 and Apr-Dec, FY11 Treasury Income stood at the healthy level of Rs 231.87 crore in Q3, FY11 and at Rs 691.57 crore in Apr-Dec, FY11. The Bank’s Trading Gains Stood at Rs 84.77 crore in Q3, FY11 and at Rs 322.85 crore in Apr-Dec, FY11. As of December 31, 2010, the share of SLR Securities in Total Investment was 86.67%. The Bank had 78.76% of SLR Securities in HTM and 20.90% in AFS at end-December 2010. The per cent of SLR to NDTL as on 31st December, 2010 was 26.78%. While the modified duration of AFS investments is 2.48 years; that of HTM securities is 4.99 years. Total size of Bank’s Domestic Investment Book as on 31st December, 2010 stood at Rs 68,616.79 crore. Total size of Bank’s Overseas Investment Book as on 31st December, 2010 stood at Rs 3,264.95 crore.

Overseas Business: Apr-Dec, FY11 As on 31 Dec, 2010, the “Overseas Business” contributed 24.8% to the Bank’s Total Business, 16.7% to its Gross Profit and 32.1% to its Core Fee income. While the Cost-Income Ratio for Domestic Operations stood at 41.09% in Apr-Dec, FY11, it was more favourable at 19.32% for the Bank’s Overseas Operations. While the Gross NPA (%) in Domestic Operations stood at 1.60% at end-December, 2010, that for Overseas Operations was lower at 0.55%. The Gross Profit to Avg. Working Funds (%) for Overseas Operations stood at 1.46% in Q3, FY11 and at 1.38% in Apr-Dec, FY11. The Return on Avg. Net Worth for Overseas Operations stood at 16.41% at end-June, 2010; at 19.23% at end-Sept, 2010 & at 18.24% at end-Dec, 2010. During Apr-Dec, FY11, the Bank raised US $ 350 mln for 5.5 years at 4.75% coupon (YTM: 4.886) under its MTN programme to finance asset growth in overseas operations.

Capital Adequacy & Capital Raising in H1, FY11 The Bank’s CRAR (Basel II) as on 31st Dec., 2010 was at 12.45%; of which Tier1 was at 7.70% and Tier 2 at 4.75%. The size of Bank’s risk-weighted assets as on 31st December, 2010 was Rs 1,96,041 crore. The Bank proposes to maintain its CRAR in the band of 13.0% to 13.5% in the coming years (with the Tier 1 between 8.0% and 8.5%). The Bank raised Rs 2,211.50 crore during H1, FY11 by way of the following issues. Subordinated Upper Tier II Bonds (maturing in 2025): Rs 500 crore in May, 2010 Subordinated Upper Tier II Bonds (maturing in 2025): Rs 500 crore in June, 2010 Subordinated Upper Tier II Bonds (maturing in 2025): Rs 500 crore in August, 2010 Perpetual [IPID] (maturing in 2020): Rs 711.50 crore in August, 2010

NPA Movement (Gross): Apr-Dec, FY11 Particular ( Rs crore) A. Opening Balance 2,400.69 B. Additions during Apr-Dec, FY11 1,230.53 Out of which, Fresh Slippages 1,194.62 C. Reduction during Apr-Dec, FY11 860.96 Recovery 349.37 Upgradation 141.87 PWO & WO 369.00 Exchange Difference 0.72 NPA as on 31st December, 2010 2,770.25 Recovery in PWO in Apr-Dec, FY11 186.75

Sector-wise Gross NPAs: Apr-Dec, FY10 & FY11 Agriculture 3.45 3.24 Large & Medium Industries 1.23 1.41 Retail 2.34 1.94 Housing 2.50 2.00 SME 2.91

Cumulative Position of Restructured Assets (Domestic) During 30 months (1 Apr’08 to 31 Dec’10), the Bank has restructured accounts amounting Rs 6,046.77 crore. Within this, the loans worth Rs 933.15 crore were restructured in Apr-Dec, FY11. For the period of 30 months, out of the total amount restructured, Rs 3,301.03 crore (54.6%) belonged to wholesale banking, Rs 1,466.55 crore (24.3%) to SMEs, Rs 570.22 crore (9.4%) to retail and Rs 708.97 crore (11.7%) to agriculture sector. About 46 accounts (of Rs 1 crore & above) restructured on/after 1st Apr, 2008 with aggregate outstanding of Rs 561.20 crore slipped to NPA after restructuring and most of them belonged to the SME segment. Industry-wise break-up shows that the Bank’s restructured accounts are well spread over different sectors, the major ones being iron & steel, cotton textiles, engineering, infrastructure, real estate, etc. The Bank has primarily helped genuine borrowers who suffered from temporary cash flow problems due to the global crisis. These accounts are restructured looking into the internal strength and the financial viability of such borrowers.

Sectoral Deployment of Credit at end-Dec, 2010 % share in Gross Domestic Credit Agriculture 15.0 Retail 19.2 SME 16.4 Wholesale 34.5 Miscellaneous 14.9 Total 100.0%

Bank’s Guidance & Vision The Bank would continue with its thrust on sustainable & qualitative growth -- Would maintain its growth above the industry average to further expand the market share. From Mar’07 to Dec’10, the Bank’s market share in Deposits has gone up from 3.70% to 4.14% and in Credit from 3.53% to 4.11%. The Bank would grow its deposits in the band of 20% to 22.0%; credit in the range of 23.0% to 24.0%, fee-based income in line with the loan-book and overall profitability by 25.0%, factoring in various downside risks stemming from the economic environment. The Bank is building Strong Foundation for Future Growth by working aggressively on enhancing the HR capabilities working in a dedicated fashion on its BPR project in consultation with Mckinsey & Co. focusing on development of marketing and sales & service culture expanding the market share in both Indian and overseas territories raising capital at every appropriate opportunity

Bank’s BPR Project - Navnirmaan Roadmap of the Project Navnirmaan Design : 4 Months Pilot & Execution: 5 to 12 months Roll-Out: 2 to 3 years Project Navnirmaan has already entered the Implementation stage There are in all 18 activities underway focusing on superior customer experience, customer convenience, capacity building of employees & leveraging technology. As a part of rollout, all branches at metro & urban centres shall be brought under the new model of Baroda Next branch. So far, 144 brs across 4 zones & 13 regions have been rolled out. Training system is being revamped and an Academy of Excellence is being created to meet the soft skill requirement of the employees besides developing a pipeline of business leaders. So far 2,300 employees at the rolled our Baroda Next brs have been trained by the team BPR. Organisational restructuring is being undertaken to align the Bank with redesigned processes and prepare it for the challenges of ambitious growth. Bank has entered automated cheque processing era in Mumbai on 17/01/2011.

Bank’s HR Initiatives Recruitment during FY11 Probationary Officers – 1,200 Specialist Officers (in various specialised disciplines) – 345 Clerks – 2,000 Campus Recruitment – 601 (Bank visited nearly 75 institutes including some of the premier Business schools of the country) Total New Hires that have joined the Bank so far in FY11: 1,665 Tentative Recruitment Plans for FY12 Campus Recruitment – around 600 Specialist officers (in various disciplines) – 200 New Hires Planned for Recruitment in FY12: 4,000 Bank has launched two massive Leadership Development Programmes for 1,200 of its branch heads, 300 AGMs/DGMs – unparalleled in industry & first of its kind for an Indian state-owned Bank.

Thank you.