Bank of Baroda -- Riding High on Sustainable Performance ( Apr-Mar & Q4, ) ( Apr-Mar & Q4, ) Dr Rupa Rege Nitsure Chief Economist April 28, 2010

Bank of Baroda: Key Strengths Bank of Baroda: Key Strengths  Bank of Baroda is a 101 years old State-owned Bank with modern and contemporary personality, offering banking products and services to industrial and commercial, retail and agricultural customers across the country. Relatively Strong Presence In Progressive States like Maharashtra & Gujarat Uninterrupted Record in Profit-making and Dividend Payment Overseas Business Operations extend across 25 countries through 78 Offices First PSB to receive Corporate Governance Rating (CAGR-2) All Domestic Operations Covered under the CBS Pioneer in many Customer-Centric Initiatives Strong Domestic Presence through 3, 100 branches Modern & Contemporary Personality Provides Financial Services to over 36 million 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 31 st Mar, 2010 MetroUrbanSemi- Urban Rural ,126 Bank’s network of domestic branches as on 31 st Mar, 2010 was 3,100 & no. of ATMs were 1,315. During FY10, Bank opened 178 new branches & merged four existing branches. Around 36.3% of the Bank’s branch network is located in rural areas. New branches are primarily opened in Semi-Urban, Urban & Metro areas from U.P., Gujarat, Maharashtra, Rajasthan, A.P., Tamilnadu, Uttaranchal, etc. Bank proposes to open around 400 more branches during FY10.

Robust Technology Platform Robust Technology Platform Bank achieved 100.0% CBS implementation in its domestic operations in September, As on date, 94.0% of its overseas business is covered under the CBS. All CBS branches are enabled for inter bank remittances through RTGS and NEFT. Bank’s Retail & Corporate Customers enjoy several facilities like internet banking, phone banking, rapid funds2india – an online money transfer service, e-tax payment, NEFT/RTGS thru’ e-banking, sms alerts, cash mgmt services, online institutional trading, etc. As on 31 st Mar, 2010, Bank had 1,315 ATMs – 841 Onsite ATMs & 474 Offsite ATMs. An Integrated Global Treasury Solution is implemented in UK, UAE, Bahamas, Baharain, Hong Kong & India. AML System has been implemented in India & 14 overseas territories. Bank has created an Online Centralised-Database of its employees, which enables speedy decision- making, promotions, selection, etc. through automated processes. Payment Messaging Solution has been implemented in 13 overseas territories & all B category branches in India. A module for School Fee Collection has been implemented. Debit cards are now CVX2 enabled for online payment & 3D Secure (3DS) has been implemented. Enterprise wide GL has been implemented in India & 19 overseas territories, providing integrated GL on a press of a button. All Back-Office functions have now been effectively centralised in Bank of Baroda.

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

Pattern of Shareholding: 31 st Mar, 2010 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. As on 31 st Mar, 2010 Share Capital Rs crore No. of Shares million Net worth Rs 13, crore B. V. per share Rs Return on Equity (annualised): 22.19%

Comparative Performance of BoB Stock: FY10 Index/Stock Value (31 st Mar’09) Value (31 st Mar’10)% Change Sensex 9, , % Nifty 3, , % Bankex 4, , % BankNifty 4, , % BoB-BSE % BoB-NSE %

Indian Macro Scene Quite Mixed in FY10

Indian economy passed through many “pluses” and “minuses” in FY10 A worst drought in last three decades gave rise to a decline of 8.0% in foodgrains & 5.0% in oilseeds production (y-o-y). A strong recovery in Mfg, Mining & Services sectors, however, is likely to give a real GDP growth of 7.2% in FY10 (Official Estimate). Both Govt. and Pvt. Final Consumption Expd. slowed down but investment demand (gross fixed capital formation) showed a gradual recovery. WPI-based inflation, after remaining subdued during H1, FY10, increased at a faster pace in the second half and reached 9.90% (y-o-y) in Mar’10. Both exports & imports returned to positive zones by Nov-Dec, 2009 after contracting for months. But a fall in invisibles’ surplus has led to a higher current account deficit in FY10. Equity markets surged on higher FII inflows at US$ 29 bln. Even FDI during Apr-Feb, FY10 amounted to US$ 33.1 bln. In nominal terms, Rupee appreciated by 11.5% in FY10. Record market borrowing programme and rising inflation gave rise to hardening of bond yields. Yield on 10-year GoI benchmark paper increased from 6.94% at the beginning of FY10 to 7.17% by mid-FY10 to 7.85% by end of FY10. It hovered above 8.0% for several days during the month of March, 2010.

Business Growth (Y-O-Y): FY06 to FY10 Bank’s Business Growth (Y-O-Y): FY06 to FY10

Bank’s Profitability: FY06 to FY10 Bank’s Profitability: FY06 to FY10 Bank’s Net Profit has grown at a strong CAGR of 38.7% between FY06 & FY10

Bank’s Asset Quality: FY04 to FY10 Bank’s Asset Quality: FY04 to FY10 Gross NPA Net NPA

Bank’s Business Performance: FY10 over FY09 Bank’s Business Performance: FY10 over FY09 Particular (Rs crore) FY09FY10% Change Global Business 3,35,6484,16, % Domestic Business 2,59,9583,16, % Overseas Business 75,69199, % Global Deposits 1,92,3972,41, % Domestic Deposits 1,51,4091,85, % Overseas Deposits 40,98855, % Global CASA Deposits 56,93971, % Domestic CASA 52,78966, % Overseas CASA 4,1495, % Share of Domestic CASA improved from 34.87% at end-Mar’09 to 35.63% at end-Mar’10.

Bank’s Business Performance: FY10 over FY09 Bank’s Business Performance: FY10 over FY09 Particular (Rs crore) FY09FY10% Change Global Advances (Net) 1,43,2511,75, % Domestic Advances (Net) 1,08,5491,31, % Overseas Advances (Net) 34,70343, % Out of Gross Domestic Credit, Retail Credit Of which: 19,62824, % Home Loans 8,26310, % SME Credit 14,66221, % Farm Credit 16,96421, % Credit to Weaker Sections 8,15610, % Excluding loans to Retail Trade (that is included under the SME sector as per the new RBI guidelines) the growth in SME advances works out to 28.2% (y-o-y) in FY10.

Bank’s Business Performance: FY10 over FY09 Bank’s Business Performance: FY10 over FY09 Particular (Rs crore) FY09FY10% Change Global Saving Deposits 42,48752, % Domestic Savings Deposits 41,32751, % Overseas Savings Deposits 1,1601, % Global Current Deposits 14,45118, % Domestic Current Deposits 11,46214, % Overseas Current Deposits 2,9894, %

Bank’s Profits & NII: Yearly & Quarterly for FY09 & FY10 Bank’s Profits & NII: Yearly & Quarterly for FY09 & FY10 Particular (Rs crore) FY09FY10% Change Gross Profit 4, , % Net Profit 2, , % Net Interest Income 5, , % Particular (Rs crore) Jan-Mar, FY09 Jan-Mar, FY10 % Change Gross Profit 1, , % Net Profit % Net Interest Income 1, , % Net Profit for FY09 includes an exceptional item of Rs crore due to winding up/dilution of Bank’s holdings in its subsidiaries & Net Profit of FY10 includes an exceptional item of Rs crore due to sale of stake in UTI AMC & UTI Trustee companies.

Key Financial Ratios : FY10 Key Financial Ratios : FY10  Return on Average Assets at 1.21% [1.09% in FY09]  Earning per Share (annualised) at Rs [Rs in FY09]  Book Value per Share at Rs [Rs in FY09]  Return on Equity (ROE) at 22.19% [19.56% in FY09]  Capital Adequacy Ratio at 14.36% with Tier I Capital at 9.20% Cost-Income Ratio declined from 45.38% to 43.57%( Y-o-Y).  Gross NPA ratio increased marginally from 1.27 % to 1.36% (Y-o-Y).  Net NPA ratio increased marginally from 0.31 % to 0.34%( Y-o-Y).  NPA Coverage at the healthy level of 74.90% & Incremental Delinquency Ratio at 1.13% in FY10.

Other Highlights: FY09 & FY10 Other Highlights: FY09 & FY10 Particular (in %)FY09FY10 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: FY09 & FY10 Other Highlights: FY09 & FY10 Particular (in %)FY09FY10 Global Yield on Investment Domestic Yield on Investment Overseas Yield on Investment Global NIM Domestic NIM Overseas NIM NIM indicates Net Interest Income as % of Interest Earning Assets.

Other Highlights: Jan-Mar, FY09 & FY10 Other Highlights: Jan-Mar, FY09 & FY10 Particular (in %)Jan-Mar’09Jan-Mar’10 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: Jan-Mar, FY09 & FY10 Other Highlights: Jan-Mar, FY09 & FY10 Particular (in %)Jan-Mar’09Jan-Mar’10 Global Yield on Investment Domestic Yield on Investment Overseas Yield on Investment Global NIM Domestic NIM Overseas NIM Sequentially, the NIM has improved from 2.37% in Q1, FY10 to 2.63% in Q2, FY10 to 2.95% in Q3, FY10 & 2.97% in Q4, FY10 in global operations & from 2.57% to 2.89% to 3.40% to 3.50%in domestic operations.

Non-Interest Income: FY09 & FY10 Non-Interest Income: FY09 & FY10 (Rs crore)FY09FY10 % Change Comm., Exchange, Brokerage % Incidental Charges % Profit on Exchange Transactions % Recovery from PWO % Trading Gains % Other Misc. Income % Total Non-Interest Income2, , %

Non-Interest Income: Jan-Mar, FY09 & FY10 Non-Interest Income: Jan-Mar, FY09 & FY10 (Rs crore)Jan-Mar, 2009 Jan-Mar, 2010 % Change Comm., Exchange, Brokerage % Incidental Charges % Profit on Exchange Transactions % Recovery from PWO % Trading Gains % Other Misc. Income % Total Non-Interest Income %

Provisions & Contingencies: FY09 & FY10 Provisions & Contingencies: FY09 & FY10 (Rs crore)FY09FY10 Provision for NPA / Bad Debts Written-off Prov. For Dep. on Investment Prov. For Std. Adv Other Provisions (including Prov. For staff welfare) Tax Provisions 1, , Total Provisions 2, ,876.93

Provisions & Contingencies: Jan-Mar, FY09 & FY10 Provisions & Contingencies: Jan-Mar, FY09 & FY10 (Rs crore)Jan- Mar’09 Jan- Mar’10 Provision for NPA/ Bad debts written-off Prov. For Dep. on Investment Prov. For Std. Adv Other Provisions (including Prov. For staff welfare) Tax Provisions Total Provisions

Bank’s Treasury Highlights: FY10 Bank’s Treasury Highlights: FY10 Treasury Income stood at the healthy level of Rs 1, crore in FY10 despite volatile bond and currency markets. As of Mar 31 st 2010, the share of SLR Securities in Total Investment was 86.78%. The Bank had 80.13% of SLR Securities in HTM and 19.56% in AFS at end-Mar The per cent of SLR to NDTL as on 31 st Mar., 2010 was 26.91%. While the modified duration of AFS investments is 2.18 years; that of HTM securities is 4.70 years. Total size of Bank’s Domestic Investment Book as on 31 st Mar 2010 stood at Rs 57,912 crore. Total size of Bank’s Overseas Investment Book as on 31 st Mar 2010 stood at Rs 3,487 crore.

Overseas Business: FY10 Overseas Business: FY10 In FY10, the “Overseas Business” contributed 23.8% to the Bank’s Total Business, 19.6% to its Gross Profit and 36.0% to its Fee-based income. While the Cost-Income Ratio for Domestic Operations stood at 47.11% in FY10, it was just 22.15% for Overseas Operations. While the Gross NPA (%) in Domestic Operations stood at 1.64% at end- Mar, 2010, that for Overseas Operations was just 0.47%. “Gross Profit to Avg. Working Funds” ratio for Overseas Operations was 1.57% in FY10 comparable to 2.11% for Domestic Operations. The ROAA of overseas operations was at 1.42% and the ROE at 24.0% in FY10. During FY10, the Bank raised FE resources in the form of syndicated loan of USD 175 mln for 3 yrs; bilateral loan of USD 100 mln for 3 yrs and MTN funds of USD 350 mln for 5.5 yrs for deployment in its overseas business.

Capital Adequacy & Capital Raising: FY10 Capital Adequacy & Capital Raising: FY10 Bank’s CRAR as on 31 st Mar, 2009 stood at 14.36%; of which Tier1 was at 9.20% and Tier 2 at 5.16%. The size of Bank’s risk-weighted assets as on 31 st Mar, 2010 was Rs 1,56,091 crore. Bank proposes to maintain its CRAR in the band of 13.0% to 13.5% in the coming years (with the Tier 1 at 8.5% to 9.0%). Bank has raised Rs 1,900 crore during FY10 by way of the following issues. Subordinated Upper Tier II Bonds: Rs 500 crore in June, 2009 Subordinated Upper Tier II (Fixed Rate) Bonds: Rs 500 crore in July Fixed Rate Perpetual Bonds (Innovative): Rs 300 crore in Oct, 2009 Fixed Rate Perpetual Bonds (Innovative): Rs 600 crore in Nov, 2009

NPA Movement (Gross): FY10 NPA Movement (Gross): FY10 ParticularAmount in Rs crore A. Opening Balance1, B. Additions during FY101, Out of which, Fresh Slippages1, C. Reduction during FY101, Recovery Upgradation PWO & WO Exchange Difference20.74 NPA as on 31 st Mar, 20102, Recovery in PWO in FY

Gross NPAs: Sectoral Break-up at end-Mar, 2010 Gross NPAs: Sectoral Break-up at end-Mar, 2010 SectorGross NPA (%) FY09 Gross NPA (%) FY10 Agriculture1.68%3.33% Large & Medium Ind.0.74%1.43% Retail2.48%2.11% Housing3.01%2.31% SME2.58%2.60%

Restructured Loans : FY10 Restructured Loans : FY10 During 24 months (1 Apr’08 to 31 Mar’10), Bank has restructured 61,174 accounts amounting Rs 5, crore. Within this, the loans worth Rs were restructured in Q4, FY10. For the period of 24 months, out of the total amount restructured Rs 2, cr belonged to wholesale banking, Rs 1, cr to SMEs, Rs cr to retail and Rs cr to agriculture sector. About 79 accounts above Rs 25 lakh restructured during the last 24 months slipped during FY10 and they were Rs crore. Industry-wise break-up shows that-- Bank’s restructured accounts are well spread over different sectors, the major ones being cotton textiles, engineering goods, iron & steel, food processing, infrastructure, etc. Bank has primarily helped genuine borrowers who suffered from temporary cash flow problems due to global crisis. These accounts are restructured looking into their internal strength & after ensuring their financial viability.

Sectoral Deployment of Credit in FY10 Sectoral Deployment of Credit in FY10 Sector% share in Gross Domestic Credit Agriculture16.18% Retail18.15% SME15.80% Trading plus Others15.14% Wholesale34.73% Total100.0%

Emerging Economic Scenario Emerging Economic Scenario Global economic recovery, currently underway, faces risks because of large public debt in advanced countries. Advanced countries still suffer from loss of capacity output, high unemployment rates, impaired financial systems, etc. However, Asia is much better placed as domestic demand in Asian countries is replacing exports as the main growth driver, led by China & India. While India is likely to post the growth around 7.2% in FY10, the growth is expected to rebound to 8.0% in FY11 backed by stronger than expected growth momentum in industry & services. Food inflation- a major macro concern for India until the next normal monsoon season. With both growth & inflation heading towards 8.0%, the pace of monetary tightening is going to increase putting upward pressure on interest rates. Indian currency is headed for appreciation despite faster widening of current account deficit. Key risks: high food & oil prices, a double-dip, etc. Positives: strong net capital inflows (both FIIs & FDI) & good signs of investment rebound.

Bank’s Guidance & Vision Bank’s Guidance & Vision The Bank would continue with its thrust on sustainable & qualitative growth -- Will 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 the optimum use of technology and right skilling of the manpower to yield maximum customer satisfaction. Aggressively launching a series of marketing campaigns to promote its Brand value, such as the recently launched Baroda Next Reinforcement Campaign – II.

Thank you.