Bank of Baroda Smooth Sailing through the Rough Waters Financial Results: Q2 & H1, (FY12) Dr Rupa Rege Nitsure Chief Economist October 31, 2011

Bank of Baroda: Key Strengths Bank of Baroda: Key Strengths  Bank of Baroda is a 103 years old State-owned Bank with modern & contemporary personality, offering banking products and services to Large industrial, SME, retail & agricultural customers across the country. Relatively Strong Presence in Progressive States like Gujarat & Maharashtra Uninterrupted Record in Profit-making and Dividend Payment Overseas Business Operations extend across 25 countries through 86 Offices First PSB to receive Corporate Governance Rating (CGR-2) Robust Technology Platform with 100% CBS in Indian Branches Pioneer in many Customer-Centric Initiatives Strong Domestic Presence through 3, 492 Branches Modern & Contemporary Personality Provides Financial Services to over 41.8 mln Customers Globally A well-accepted & recognised Brand in Indian banking industry

Domestic Branch Network Domestic Branch Network Regional Break-up of Domestic Branches as on 30 th Sept, 2011 MetroUrbanSemi- Urban Rural ,200 Bank’s network of domestic branches as on 30 th Sept, 2011 was 3,492 & no. of ATMs were 1,800. During H1, FY12, the Bank opened 128 new branches. In FY12, the Bank plans to open 264 branches in Tier-1 & Tier-2 centres and 305 branches in Tier-3 to Tier-6 centres. Also, 91 branches under the Branch Expansion Plan of FY11 are yet to be opened. Newly opened branches in H1, FY12 are well diversified across U.P & Uttaranchal, Maharashtra & Southern zones Around 34.4% of the Bank’s network at the end-June, FY12 was situated in rural areas.

Robust Technology Platform Robust Technology Platform As on 30 th Sept 2011, the Bank’s entire domestic, overseas and RRBs [i.e., five sponsored RRBs] related operations were on the CBS platform. Bank has developed IT facilities for online/offline account opening through Business Correspondents under Financial Inclusion. Bank’s retail & corporate customers enjoy several facilities under its Internet Banking delivery channel such as fund transfers to self & third party (within BoB); online payment of bills & taxes, rail-ticket booking, temple donations, online subscription to IPOs/FPOs thru’ ASBA & institutional fee payment. SMS alerts & RTGS/NEFT transactions are also implemented in the Internet Banking Portal. Bank has implemented Internet Banking in several of its overseas territories & a Special Fund Mgmt Solution in UAE & New Zealand. Bank has built a State-of-the-Art Data Centre conforming to Uptime Institute Tier-3 standard & a Disaster Recovery Site in different seismic zones to ensure uninterrupted banking services delivery to customers. Bank’s 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. Anti Money Laundering (AML) has been implemented in India and 20 overseas territories.

Robust Technology Platform Robust Technology Platform Bank has successfully implemented an Integrated Global Treasury Solution in its major territories like U.K., UAE, Bahamas, Bahrain, Hong Kong, Singapore, Belgium, USA and India to achieve reduced cost of operations & better fund mgmt. Enterprise-wide General Ledger (EWGL) has been successfully implemented for the Bank’s domestic and overseas business. Bank has introduced the facility of Multiple Accounts being linked to a single Debit Card (verified by Visa, CVV2) and also Mobile Number registration thru’ ATMs in CBS for SMS Alerts. E-tax payments thru’ ATMs are also facilitated and Mobile ATMs are introduced in Ahmedabad, Pune, Lucknow & New Delhi. Back Office functions have been centralised in the Bank at City Back Offices & five Regional Back Offices ( at Baroda, Jaipur, Lucknow, Bhopal & Coimbtore) to improve the delivery of services. On a pilot basis, Automated Cheque Processing Centre (Inward & Outward) has been set up in Mumbai. BoB IIT – an exclusive IT Training Centre has been set up in Ghandhinagar to educate the Bank’s staff in all IT related products & services.

Concentration (%): Domestic Branch Network Concentration (%): Domestic Branch Network

Pattern of Shareholding: 30 th Sept, 2011 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. As on 30 th Sept, 2011 Share Capital: Rs crore No. of Shares: million Net worth: Rs 22, crore B. V. per share: Rs Return on Equity (H1, FY12): %

Comparative Performance of BoB Stock: Sept’10 to Sept’11 Index/Stock Value (30 th Sept’10) Value (30 th Sept’11)% Change Sensex20,06916, % Nifty6,0304, % Bankex14,02510, % BankNifty12,3669, % BoB-BSE % BoB-NSE %

India’s Macro Health: Sept’10 to Sept’11 IndicatorApr-Aug, 2010Apr-Aug, 2011 Infrastructure Industries’ Growth (%, yoy) 6.1%5.6% IIP Growth (%, yoy)8.7%5.6% Exports (US$ Bln) Trade Deficit (US$ Bln) Sept, 2010Sept, 2011 Food Inflation16.3%9.23% Fuel Inflation11.1%14.1% Mfg. Inflation5.0%7.7% Overall Inflation8.98%9.72% PMI, Manufacturing Passenger Car sales (%, yoy) 30.0%(-) 1.8% End-Sept, 2010End-Sept, 2011 Bank Credit (%, yoy)19.0%21.4% Bank Deposits (%, yoy)14.3%19.1% FER (US$ Bln) Exchange Rate (Rs/US$)

Quick Economic Observations Economic activity in advanced nations weakened further in Jul-Sept, 2011 on the back of worsening sovereign debt dynamics in the euro region High commodity prices including those of crude oil, persistently high unemployment & weak housing markets have adversely impacted consumer confidence, globally. Weak incremental economic data for India has made RBI revise downwards its GDP forecast for FY12 to 7.6% from the earlier 8.0% Yet indicative target of non-food credit growth is retained at 18.0% for FY12 – a positive for the banking industry Inflation still stubbornly high but likely to ease from December, 2011 (primarily due to the statistical base effect); However, RBI has warned against uncertainties about sudden adverse developments to the inflation trajectory. Downside risks remain in the form of uncertain global macroeconomic environment ; stickiness in global commodity prices despite growth slowdown; India’s fiscal stresses – higher market borrowings – elevated interest rates – crowding out of private investment, etc. Structural imbalances in protein rich food items and this year’s poor performance of pulses crop during the kharif season are likely to maintain upward pressure on food inflation.

Business Growth (Y-O-Y): Sept’06 to Sept’11 Bank’s Business Growth (Y-O-Y): Sept’06 to Sept’11

Bank’s Profitability: Sept’06 to Sept’11 Bank’s Profitability: Sept’06 to Sept’11 During the last five years, the Bank’s Half-yearly Net Profit has grown at the robust CAGR of 37.2%.

Bank’s Asset Quality: Sept’06 to Sept’11 Bank’s Asset Quality: Sept’06 to Sept’11

Bank’s Business Performance: Sept’10 to Sept’11 Bank’s Business Performance: Sept’10 to Sept’11 Particular (Rs crore) Sept’10Mar’11Sept’11 Y-O-Y (%) Change Over Mar’11 (%) Global Business4,62,6195,34,1165,68, %6.4% Domestic Business3,47,7334,02,7314,13, %2.7% Overseas Business1,14,8851,31,3851,54, %1.8% Global Deposits2,69,6603,05,4393,29, %7.8% Domestic Deposits2,06,0012,33,3232,44, %4.9% Overseas Deposits63,65972,11684, %17.1% Global CASA Deposits79,81587,58990, %3.0% Domestic CASA73,94480,18183, %3.8% Overseas CASA 5,8707,4076, %-6.5% Share of Domestic CASA was at 34.02% in terms of Aggregate Deposits and at 36.23% in terms of Core Deposits as on 30 th Sept, 2011.

Bank’s Business Performance: Sept’10 to Sept’11 Bank’s Business Performance: Sept’10 to Sept’11 Particular (Rs crore) Sept’10Mar’11Sept’11 Y-O-Y (%) Change Over Mar’11 (%) Global advances (Net)1,92,9592,28,6762,39, %4.6% Domestic Advances1,41,7321,69,4081,69, %-0.2% Overseas Advances51,22759,26970, %18.3% Retail Credit Of which: 27,19232,43529,8859.9%-7.9% Home Loans11,32412,53913, %6.1% SME Credit23,50627,36530, %10.2% Farm Credit*21,55524,52922,6194.9%-7.4% Credit to Weaker Sections* 11,97613,24513, %4.7% * As of Last Reporting Friday

Bank’s Business Performance: Sept’10 to Sept’11 Bank’s Business Performance: Sept’10 to Sept’11 Particular (Rs crore) Sept’10Mar’11Sept’11 Y-O-Y (%) Change Over Dec’10 (%) Global Saving Deposits59,34964,45468, %6.3% Domestic Savings Deposits57,99462,95967, %6.4% Overseas Savings Deposits1,3551,4951, %2.2% Global Current Deposits20,46623,13521,6395.7%-6.5% Domestic Current Deposits15,95017,22216,2371.8%-5.7% Overseas Current Deposits 4,5165,9125, %-8.6%

Bank’s Profits & NII: Jul-Sept, FY11 & FY12 Bank’s Profits & NII: Jul-Sept, FY11 & FY12 Particular (Rs crore) July-Sept’10July-Sept’11 Y-O-Y (%) Gross Profit1,6572, % Net Profit1,0191, % Net Interest Income 2,0382, %

Other Highlights: Q2,FY11 to Q2,FY12 Other Highlights: Q2,FY11 to Q2,FY12 Particular (in %)Q2, FY11 Q3, FY11 Q4, FY11 Q1, FY12 Q2, FY12 Global Cost of Deposits Domestic Cost of Deposits Overseas Cost of Deposits Global Yield on Advances Domestic Yield on Advances Overseas Yield on Advances

Other Highlights: Q2, FY11 to Q2,FY12 Other Highlights: Q2, FY11 to Q2,FY12 Particular (in %)Q2, FY11 Q3, FY11 Q4, FY11 Q1, FY12 Q2, FY12 Global Yield on Investment Domestic Yield on Investment Overseas Yield on Investment Global NIM Domestic NIM Overseas NIM

Key Financial Ratios : Q2, FY12 versus Q2, FY11 Key Financial Ratios : Q2, FY12 versus Q2, FY11 Return on Average Assets at 1.23% [ 1.27% in Q2, FY11] Earning per Share at Rs [Rs in Q2, FY11] Book Value per Share at Rs [Rs in Q2, FY11] Return on Equity (ROE) at 20.79% [ 23.98% in Q2, FY11] Capital Adequacy Ratio at 12.73% with Tier I Capital at 8.82% Cost-Income Ratio at 35.57% [ 38.69% in Q2, FY11] Gross NPA ratio at 1.41% -- is one of the lowest for large-sized banks in India Net NPA ratio too low at 0.47% NPA Coverage at the healthy level of 81.97% (including the technical write-offs) Incremental Delinquency Ratio contained at 0.47% for H1, FY12; This means 0.94% in annualised terms – the best possible level by international standards.

Key Productivity Indicators Q2, FY12 versus Q2, FY11 Key Productivity Indicators Q2, FY12 versus Q2, FY11 Q2, FY11Q2, FY12 Business per Employee (Rs crore) Business per Branch (Rs crore) Profit per Employee (Rs lakh) Profit per Branch (Rs lakh)

Non-Interest Income: Q2, FY11 and Q2, FY12 Non-Interest Income: Q2, FY11 and Q2, FY12 (Rs crore)Q2, FY11Q2, FY12 % Change (Y-O-Y) Commission, Exchange, Brokerage % Incidental Charges % Other Miscellaneous Income % Total Fee-Based Income % Trading Gains % Profit on Forex Transactions % Recovery from Written-off Accounts % Total Non-Interest Income %

Non-Interest Income: H1, FY11 and H1, FY12 Non-Interest Income: H1, FY11 and H1, FY12 (Rs crore)H1, FY11H1, FY12 % Change (Y-O-Y) Commission, Exchange, Brokerage % Incidental Charges % Other Miscellaneous Income % Total Fee-Based Income % Trading Gains % Profit on Forex Transactions % Recovery from Written-off Accounts % Total Non-Interest Income1, , %

Provisions & Contingencies: Q2, FY11 and Q2, FY12 Provisions & Contingencies: Q2, FY11 and Q2, FY12 (Rs crore)Q2, FY11Q2, FY12Absolute Change Provision for NPA & Bad Debts Written-off Provision for Depreciation on Investment Provision for Standard Advances Other Provisions (including Provision for staff welfare) Tax Provisions Total Provisions

Provisions & Contingencies: H1, FY11 and H1, FY12 Provisions & Contingencies: H1, FY11 and H1, FY12 (Rs crore)H1, FY11H1, FY12Absolute Change Provision for NPA & Bad Debts Written-off Provision for Depreciation on Investment Provision for Standard Advances Other Provisions (including Provision for staff welfare) Tax Provisions Total Provisions1, ,

Bank’s Treasury Highlights: Q2, FY12 Bank’s Treasury Highlights: Q2, FY12 Treasury Income stood at the level of Rs crore in Q2, FY12 Out of this, Trading Gains stood at Rs crore in Q2, FY12, as the yield on benchmark G-sec hardened further by 11 bps and Sensex (additionally) lost 12.7% in Q2, FY12. As of Sept 30, 2011, the share of SLR Securities in Total Investment was 81.30%. The Bank had 81.75% of SLR Securities in HTM and 17.62% in AFS at end-Sept The per cent of SLR to NDTL as on 30 th Sept., 2011 was 27.11%. While the modified duration of AFS investments is 2.80 years; that of HTM securities is 4.96 years. Total size of Bank’s Domestic Investment Book as on 30 th Sept, 2011 stood at Rs crore. Total size of Bank’s Overseas Investment Book as on 30 th Sept, 2011 stood at Rs 3,628 crore.

Overseas Business: Q2, FY12 Overseas Business: Q2, FY12 As on 30 th Sept, 2011, the “Overseas Business” contributed 27.2% to the Bank’s Total Business, 20.1% to its Gross Profit and 36.0 % to its Core Fee income (i.e. Commission, Exchange & Brokerage). While the Cost-Income Ratio for Domestic Operations stood at % in Q2, FY12, it was more favourable at % for the Bank’s Overseas Operations. While the Gross NPA (%) in Domestic Operations stood at 1.70% at end- Sept, 2011, that for Overseas Operations was lower at 0.69%. The Gross Profit to Avg. Working Funds (%) for Overseas Operations stood at 1.36% in Q2, FY11 and at 1.58 % in Q2, FY12. NIM as % of Interest Earnings Assets in Overseas Operations improved from 1.33% in Q2, FY11 to 1.42 % in Q2, FY12. Return on Equity in Overseas Operations was at % in Q2, FY12

NPA Movement (Gross): H1, FY12 NPA Movement (Gross): H1, FY12 Particular( Rs crore) A. Opening Balance3, B. Additions during H1, FY121, Out of which, Fresh Slippages1, C. Reduction during H1, FY Recovery Upgradation PWO & WO Exchange Difference0.00 NPA as on 30 th Sept, 20113, Recovery in PWO in H1, FY

Sector-wise Gross NPAs: H1, FY12 versus H1, FY11 Sector-wise Gross NPAs: H1, FY12 versus H1, FY11 SectorGross NPA (%) H1, FY11 Gross NPA (%) H1, FY12 Agriculture Large & Medium Industries Retail Housing SSI (Mfg) Total MSME Overseas Operations

Cumulative Position of Restructured Assets (Domestic) Cumulative Position of Restructured Assets (Domestic) During the past 42 months (1 Apr’08 to 30 Sept’11), the Bank has restructured 77,521 accounts amounting Rs 7, crore. Within this, the loans worth Rs 1, crore were restructured in H1, FY12; Rs 1, crore were restructured in FY11, Rs 2, crore in FY10 & Rs 2, crore in FY09. For the period of 42 months, out of the total amount restructured, Rs 4, crore (58.1%) belonged to wholesale banking, Rs 1, crore (23.0%) to SMEs, Rs crore (7.5%) to retail and Rs crore (11.4%) to agriculture sector. About 73 accounts (of Rs 1 crore & above) restructured on/after 1 st Apr, 2008 with aggregate outstanding of Rs 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, End-Sept, 2011 Sector% share in Gross Domestic Credit Agriculture13.2% Retail17.4% SME17.6% Wholesale36.7% Misc. including Trade 15.1% Total100.0%

Major Awards & Accolades in H1, Awards for the Bank Best Public Sector Bank (PSB) by CNBC-TV18 & MCX Golden Peacock Award for Excellence in Corporate Governance by Institute of Directors & World Forum for Corporate Governance received in London Dainik Bhaskar India Pride Award for 2011 Most Efficient Bank in Kenya Best Initiatives in Inclusive Banking – FIBC Banking Award Dun & Bradstreet’s Leading PSB in “Global Business Development Category” National Award for Performance under SME Business Awards for the Bank’s CEO (CMD) Outstanding Financial Professional-2010 by CNBC-TV18 & MCX Best Banker Award (T. A. Pai Memorial Award) by Karnataka State Open University Lifetime Achievement Award by Dainik Bhaskar India Pride Awards

Bank’s BPR Project - Navnirmaan Bank’s BPR Project - Navnirmaan Project Navnirmaan has altogether 18 activities covering both BPR & Organisational Restructuring, aimed at transforming the Bank’s branches into a sales & service centres to make possible a sustained sales growth, superior customer experience and alternate channel migration. The most important initiatives were Conversion of all metro & urban branches into Baroda Next branches within a timeline [ 485 branches rolled out so far across Nine zones & 28 regions] Creation of automated & leaner Back Offices like: City Back Office (Automated cheque processing introduced in Mumbai on 17 Jan, 2011) Regional Back Office [Six RBOs at present & four more are being opened coupled with tech changes for faster account opening]. Establishment of two Contact or Call Centres Introduction of frontline automation at select branches for customer convenience Creation of an Academy of excellence Organisational Restructuring The initial impact of Baroda Next migration has been found to be rewarding both in terms of increased customer satisfaction and CASA growth. The said impact has been sustained at 110 Baroda Next branches recently evaluated on (a) sales and (b) customer satisfaction.

Bank’s HR Initiatives Bank’s HR Initiatives Recruitment Plan for FY12 Probationary Officers – 1,200 Campus Recruitment – 600 Specialist officers (in various disciplines) – 200 Clerks – 2,000 Total new Hires Planned for Recruitment in FY12: 4,000 Project Udaan: Bank is currently conducting a massive & comprehensive Leadership Development Programme to cover all branch heads of Urban/Metro Branches and AGMs/DGMs in the Bank. This programme will cover almost 1,500 people and develop their leadership effectiveness further. Opening of Baroda-Manipal School of Banking: This is to help in getting trained manpower for the Bank. Project Sparsh: The Bank has initiated this project in consultation with BCG to revamp its existing HR processes, structures and policies and create an integrated HR framework revolving around initiatives like creating a scientific staffing model, manpower planning, succession planning, development and capability building, career management, performance management, etc.

Thank you.