Presentation to Analysts Performance Highlights ( Q1, 2009-10) by Dr Rupa Rege Nitsure Chief Economist July 27, 2009

Bank of Baroda: Key Strengths Bank of Baroda is a third largest PSU Bank in India with modern and contemporary personality, offering banking products and services to industrial and commercial, retail and agricultural customers across the country. Overseas Business Operations extend across 25 countries through 74 branches/ Offices Modern & Contemporary Personality Uninterrupted Record in Profit-making and Dividend Payment Strong Domestic Presence through 2,927 branches Pioneer in many Customer-Centric Initiatives Provides Financial Services to over 36.6million customers globally First PSB to receive Corporate Governance Rating (CAGR-2) Relatively Strong Presence in Industrially Progressive States of India Rapid & Significant Technology Progression Since FY06 A well-accepted & recognised Brand in Indian banking industry

Domestic Branch Network The Bank’s network of domestic branches on 30th June 2009 was 2,927. During Q1, FY10, Bank opened three new branches & merged two existing branches. On 20th July, 2009, Bank opened 61 new branches including upgradation of its six extension counters to branches. New branches are mainly concentrated in Urban & Semi-Urban centres from Maharashtra, Gujarat, Southern States, U.P. & Uttaranchal. Bank still has 115 pending applications with the RBI for opening of new branches during FY10 Regional Break-up of Domestic Branches as on 30 June, 2009 Metro Urban Semi-Urban Rural 637 540 649 1,101

Robust Technology Platform By 30 June, 2009, the Bank completed CBS Rollout in 1,987 domestic branches & 66 overseas offices, covering 94% of Bank’s business under the CBS. (Two overseas branches were opened in T & T on 10.07.2009). The Bank proposes to bring its Total Business under CBS by end-Sept, 2009. Bank’s ATM network increased to 1,183 by end-June 2009 from a mere 170 in 2005. Bank has taken the following new IT initiatives in the recent past. NEFT /RTGS through e-banking Multiple accounts linkage to single debit card AML implementation in CBS branches in India Trinidad & Tobago ATMs made live through India switch Base 24 To enhance the Bank’s fee-based income, the Bank has introduced various products & services like corporate cash Mgmt, facility for e-tax payment for non-customers & non-Baroda connect customers, shopping mall facility on e-banking, temple donations through ATMs and school fee module for collection of fees, etc.

Concentration (%): Domestic Branch Network

Pattern of Shareholding: 30th June, 2009 As on 30th June, 2009 Share Capital Rs 365.53 crore No. of Shares 364.27 million Net worth Rs 12,066.77 crore B. V. per share Rs 331.26 Return on Equity (annualised): 22.72% BOB is a Part of the following Indexes BSE 100, BSE 200 and BSE 500 Nifty Junior and Bankex. BOB’s Share is listed on BSE and NSE in ‘Future and Options’ segment also.

Annualised Business Growth: Jun’05 to Jun’09

Quarterly Profits: June’05 to June’09 Net Profit has grown at a CAGR of 44.6% between Jun’05 & Jun’09

Asset Quality: Jun’04 to Jun’09

Business Performance: Jun’09 over Jun’08 Particular (Rs crore) Jun’08 Jun’09 % Change Global Business 2,66,121.82 3,41,281.71 28.2% Domestic Business 2,09,134.78 2,60,997 24.8% Overseas Business 56,987.04 80,284.31 40.9% Global Deposits 1,54,908.23 1,98,609.45 Domestic Deposits 1,23,815.73 1,54,434.59 24.7% Overseas Deposits 31,092.50 44,174.86 42.08% Global CASA Deposits 49,289.37 58,483.43 18.7% Current 11,361.85 14,246.36 25.4% Savings 37,927.52 44,237.07 16.6% Share of Domestic CASA is at the healthy level of 35.09% in Q1, 2009-10.

Business Performance: Jun’09 over Jun’08 Particular (Rs crore) Jun’08 Jun’09 % Change Global Advances (Net) 1,11,213.59 1,42,672.26 28.3% Domestic Advances (Net) 85,319.05 1,06,562.81 24.9% Overseas Advances (Net) 25,894.54 36,109.45 39.5% Out of Gross Domestic Credit, Retail Credit Of which: 16,893 20,221 19.7% Home Loans 7,282 8,741 20.0% SME Credit 12,087 15,136 25.2% Farm Credit 13,726 18,010 31.2% Credit to Weaker Sections 5,193 7,647 47.2%

Key Financial Ratios : Apr-June, 2009-10 Return on Average Assets at 1.19% [0.81% at end-June, 2008] Earning per Share (annualised) at Rs 75.28 [Rs 40.72 at end-June, 2008] Book Value per Share at Rs 331.26 [Rs 271.97 at end-June, 2008] Return on Equity (ROE) at 22.72% [14.97% at end-June, 2008] Capital Adequacy Ratio at 14.56% with Tier I Capital at 8.81% Cost-Income Ratio declined from 49.02% to 47.06%(Y-o-Y). Gross NPA ratio declined from 1.86% to 1.44% (Y-o-Y). Net NPA ratio declined from 0.52% to 0.27%(Y-o-Y). NPA Coverage improved to 81.70% [72.48% last yr] on prudent provisioning

Operating Profits: Jun’09 over Jun’08 26.21% NII grew at 14.0% (Y-o-Y) during Q1, 2009-10

Net Profits: Jun’09 over Jun’08 84.81%

Other Highlights: Apr-June, FY09 & FY10 Particular (In %) Apr-Jun’08 Apr-Jun’09 Global Cost of Deposits 5.55% 5.41% Domestic Cost of Deposits 6.05% 6.16% Overseas Cost of Deposits 3.43% 2.65% Global Yield on Advances 9.08% 8.72% Domestic Yield on Advances 10.34% 10.10% Overseas Yield on Advances 4.91% 4.69%

Other Highlights: Apr-June, FY09 & FY10 Particular (In %) Apr-Jun’08 Apr-Jun’09 Global Yield on Investment 7.22% 6.83% Domestic Yield on Investment 7.39% 7.07% Overseas Yield on Investment 5.39% 3.87% Global NIM 2.76% 2.37% Domestic NIM 2.92% 2.57% Overseas NIM 1.75% 1.48% NIM indicates Net Interest Income as % of Avg. Interest Earning Assets.

Non-Interest Income: Apr-June, FY09 & FY10 (Rs crore) Apr-Jun, 2008 Apr-Jun, 2009 % Change Comm., Exchange, Brokerage & Incidental Charges 272.67 301.34 10.5% Profit on Exchange Transactions 94.23 96.32 2.2% Recovery from PWO 54.48 49.94 -8.3% Trading Gains 91.17 255.44 180.2% Total Non-Interest Income 512.55 703.04 37.2%

Provisions & Contingencies: Apr-June, FY10 (Rs crore) Apr-Jun’08 Apr-Jun’09 % Change Provision for NPA -41.58 304.37 -- Bad-debts written off 20.09 4.15 -79.3% Prov. For Dep. on Investment 218.61 -359.80 -264.6% Prov. For Std. Adv. 16.54 8.58 -48.1% Other Provisions (including Prov. For staff welfare) 6.65 3.75 -43.6% Tax Provisions 209.02 363.51 73.9% Total Provisions 429.33 324.55 -24.4%

Treasury Highlights: Apr-June, 2009-10 Treasury Income increased from Rs 91.17 crore in Q1, FY09 to Rs 255.44 crore in Q1, FY10. As of June 30, 2009, the share of SLR Securities in Total Investment was 86.96%. The Bank had 77.89% of SLR Securities in HTM and 21.67% in AFS at end-June 2009. On 28th Apr, 2009, the Bank shifted Securities worth Rs 1,961 crore from HTM to AFS. While the modified duration of AFS investments is 2.98 years; that of HTM securities is 4.35 years. Total size of Bank’s Domestic Investment Book as on 30th June 2009 stood at Rs 52,862 crore. Total size of Bank’s Overseas Investment Book as on 30th June 2009 stood at Rs 3,677 crore.

Overseas Business: Apr-June, 2009-10 In Q1, FY10, the “Overseas Business” contributed 23.5% to the Bank’s Total Business, 23.2% to its Gross Profit and 38.8% to its Fee-based income. While the Cost-Income Ratio for Domestic Operations stood at 51.98% in Q1, FY10, it was just 19.80% for Overseas Operations. While the Gross NPA (%) in Domestic Operations stood at 1.75% at end-June, 2009, that for Overseas Operations was just 0.52%. “Gross Profit to Avg. Working Funds” ratio for Overseas Operations was 1.73% in Q1, FY10 comparable to 1.79% for Domestic Operations. On the Overseas Investment Book of Rs 3,677 crore, the Bank held Provisions worth Rs 281.43 crore during Q1, FY10.

Sectoral Break-up of Credit: Q1, FY10

NPA Movement (Gross): Q1, 2009-10 Particular Amount in Rs crore A. Opening Balance 1,842.93 B. Additions during Q1, FY10 450.95 C. Reduction during Q1, FY10 225.72 Of which, Recovery 72.10 Upgradation 134.44 PWO & WO 11.82 Exchange Difference 7.36 NPA as on 30th Jun, 2009 2,068.16 Recovery in PWO in Q1, FY10 49.94

Gross NPAs: Sectoral Break-up at end-June, 2009 Apr-Jun’08 Apr-Jun’09 Agriculture 3.16% 2.15% Large & Medium Ind. 1.24% 1.05% Retail 3.52% 2.65% Housing 4.63% 2.99% SME 3.31% 2.47%

Sectoral Deployment of Credit in Q1, FY10 % share in Gross Domestic Credit Agriculture 16.74% Retail 18.80% SME 14.07% Wholesale 50.39% Total 100.0%

Economic Scenario Uncertain agricultural outlook – Total rainfall since the beginning of Jun’09 is 19.0% below average so far. Rainfall in the remaining monsoon season remains important for sufficiency of sugarcane, rice, corn, oilseeds & cotton output. Industrial production growth has started improving, albeit at a gradual pace. Export-oriented and capital goods sectors are still reeling under the pressures of global crisis. Within Services sector, a weak global economic situation is still exerting negative influence on services like IT, ITES, Aviation, Hotels & Tourism. The Real GDP growth for FY10 is expected to be in the range of 6.0% to 6.5%. Inflation is likely to emerge as macro risk in Q4, FY10 on the back of continuously rising prices of primary articles, firming up of crude oil prices & statistical base effect. We expect inflation (WPI) to cross 5.0% by end-March, 2010.

Economic Scenario Management of record govt. borrowings of Rs 4.51 trln for FY10 without upsetting the bond market remains a major challenge for the RBI. The spread between 1-year & 10-year bond widened to 318 bps last week reflecting uncertain outlook for the bond market. High CPI-based inflation and surging capital market activity offer limited scope for banks to reduce deposits rates, which, in turn, would put upward pressure on interest rates. Large-sized market borrowings can be put through either by raising interest rates or a large increase in created money resulting in unbridled monetary expansion. In short, interest rates have developed an upward bias & would start hardening once the credit demand picks up. Non-food credit growth for banks is expected to improve in the remaining part of FY10 on the back of budget stimuli & growing consumption sentiment.

Bank’s Guidance & Vision The Bank would continue with its thrust on growth with quality & try to grow at above industry average to steadily expand its market share. The Bank would protect the current soundness of its key financials like ROAA, ROE, EPS, BVPS, NPL Position etc., through its dedicated focus on CASA Mobilisation, Efficient Pricing of Retail Deposits & Loans, Steady Reduction in Bulk Business and Credit Origination & Monitoring. The Bank would try to grow its Fee-based Income in tandem with its Loan-Book growth. The Bank is building Strong Foundation for Future Growth by Recruiting the best possible talent in the country from the Premier Institutions Working on BPR project in consultation with Mckinsey & Co. so as to achieve optimum use of technology and right skilling of the manpower to yield maximum customer satisfaction.

Thank you.