Bank of Baroda Standing Tall in Tough Times Performance Analysis: Q1, (FY12) Dr Rupa Rege Nitsure Chief Economist July 27, 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, 409 Branches Modern & Contemporary Personality Provides Financial Services to over 40.5 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 June, 2011 MetroUrbanSemi- Urban Rural ,172 Bank’s network of domestic branches as on 30 th June, 2011 was 3,409 & no. of ATMs were 1,657. During Q1, FY12, the Bank opened 45 new branches. In FY12, the Bank plans to open 269 branches in Tier-1 & Tier-2 centres and 253 branches in Tier-3 to Tier-6 centres. Also, 126 branches under the Branch Expansion Plan of FY11 are yet to be opened. Newly opened branches in Q1, FY12 are mainly in Maharashtra followed by Gujarat, M.P. & A.P. 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 June 2011, the Bank’s entire domestic, overseas and RRBs [i.e., five sponsored RRBs] related operations were on the CBS platform. Even the branches of Memon Co-op. Bk. Ltd. taken over by the Bank in April’11 are successfully migrated to 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. 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 June, 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 June, 2011 Share Capital: Rs crore No. of Shares: million Net worth: Rs 20, crore B. V. per share: Rs Return on Equity: %

Comparative Performance of BoB Stock: Jun’10 to Jun’11 Index/Stock Value (30 th June’10) Value (30 th June’11)% Change Sensex 17, , % Nifty 5, , % Bankex 10, , % BankNifty 9, , % BoB-BSE % BoB-NSE %

India’s Macro Health: Q1, FY11 to Q1, FY12 Economic Indicator Q1, FY11Q2, FY11Q3, FY11Q4, FY11Q1, FY12 Real GDP growth (%) NA Agriculture (%) NA Industry (%) NA Services (%) NA Private Consumption Expenditure growth (%) (at current market prices) NA Gross Fixed Capital Formation (% to GDP) (at current market prices) NA SCB Credit growth (%, y-o-y) SCB Deposit growth (%, y-o-y) SCB Incremental Credit-Deposit Ratio (%) WPI-Inflation (%) (end-period) Trade Balance ( US $ Billion) Rupee-USD (%, end-period) Foreign Exchange Reserves (end- period, US $ Billion)

Quick Economic Observations Tempo of global economic recovery has slowed down on account of various factors like elevated prices of crude oil & other commodities, political tensions in Middle East, earthquake & tsunami in Japan, sovereign debt problems of Europe and fiscal fragility of the U.S., etc. Chronically high inflation pressures have started impacting adversely the investment sentiment and industrial production growth in India as well Higher interest rates on term deposits have improved the pace of deposit mobilisation and reduced the gap between deposit and credit growth While bank credit growth has decelerated to some extent, it is still above the indicative target of the RBI and has not shown a seasonal slack. Rupee-USD Exchange Rate has shown a two-way movement Equity markets remained sluggish, private placement market for bonds too was lack- lustre during Q1, FY12 Investments in physical assets improved & non-bank finance to commercial sector remained healthy Notwithstanding the partial signs of growth slowdown, the RBI has warned of inflationary risks and hence continuation of the anti-inflationary stance with a close watch on new information

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

Bank’s Profitability: Jun’06 to Jun’11 Bank’s Profitability: Jun’06 to Jun’11 During the last five years, the Bank’s First Quarter Net Profit has grown at the robust CAGR of 44.6%.

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

Bank’s Business Performance: Jun’10 to Jun’11 Bank’s Business Performance: Jun’10 to Jun’11 Particular (Rs crore) Jun’10Mar’11Jun’11 Y-O-Y (%) Change Over Mar’11 (%) Global Business4,40,2625,34,1165,45, Domestic Business3,31,8784,02,7314,05, Overseas Business1,08,3841,31,3851,40, Global Deposits2,54,6683,05,4393,12, Domestic Deposits1,96,1662,33,3232,36, Overseas Deposits58,50272,11676, Global CASA Deposits74,78487,58987, Domestic CASA69,11480,18180, Overseas CASA 5,6707,4076, Share of Domestic CASA was at 33.92% in terms of Aggregate Deposits and at 35.90% in terms of Core Deposits as on 30 th June, 2011.

Bank’s Business Performance: Jun’10 to Jun’11 Bank’s Business Performance: Jun’10 to Jun’11 Particular (Rs crore) Jun’10Mar’11Jun’11 Y-O-Y (%) Change Over Mar’11 (%) Global advances (Net)1,85,5952,28,6762,32, Domestic Advances1,35,7121,69,4081,68, Overseas Advances49,88259,26963, Retail Credit Of which: 24,99432,43530, Home Loans10,77912,53912, SME Credit21,59327,36528, % Farm Credit*20,47524,52923, % Credit to Weaker Sections* 11,01213,24513, % * As of Last Reporting Friday

Bank’s Business Performance: Jun’10 to Jun’11 Bank’s Business Performance: Jun’10 to Jun’11 Particular (Rs crore) Jun’10Mar’11Jun’11 Y-O-Y (%) Change Over Dec’10 (%) Global Saving Deposits56,06164,45465, Domestic Savings Deposits54,76962,95964, Overseas Savings Deposits1,2921,4951, Global Current Deposits18,72323,13521, Domestic Current Deposits14,34517,22216, Overseas Current Deposits 4,3785,9125,

Bank’s Profits & NII: Apr-Jun, FY11 & FY12 Bank’s Profits & NII: Apr-Jun, FY11 & FY12 Particular (Rs crore) Apr-Jun’10Apr-Jun’11 Y-O-Y (%) Gross Profit1, , Net Profit , Net Interest Income 1, ,

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

Key Financial Ratios : Q1, FY12 versus Q1, FY11 Key Financial Ratios : Q1, FY12 versus Q1, FY11  Return on Average Assets at 1.13% [ 1.19% in Q1, FY11]  Earning per Share at Rs [Rs in Q1, FY11]  Book Value per Share at Rs [Rs in Q1, FY11]  Return on Equity (ROE) at 19.88% [ 23.46% in Q1, FY11]  Capital Adequacy Ratio at 13.10% with Tier I Capital at 9.06% Cost-Income Ratio at 38.11% [ 38.27% in Q1, FY11]  Gross NPA ratio at 1.46% -- is one of the lowest for large-sized banks in India  Net NPA ratio too low at 0.44%  NPA Coverage at the healthy level of 82.52% (including the technical write-offs)  Incremental Delinquency Ratio contained at 0.25% for Q1, FY12; This means 1.0% in annualised terms – the best level by the international standards.

Key Productivity Indicators Q1, FY12 versus Q1, FY11 Key Productivity Indicators Q1, FY12 versus Q1, FY11 Q1, FY11Q1, FY12 Business per Employee (Rs crore) Business per Branch (Rs crore) Profit per Employee (Rs lakh) Profit per Branch (Rs lakh)

Non-Interest Income: Q1, FY11 and Q1, FY12 Non-Interest Income: Q1, FY11 and Q1, FY12 (Rs crore)Q1, FY11Q1, FY12 % Change (Y-O-Y) Commission, Exchange, Brokerage Incidental Charges Other Miscellaneous Income Total Fee-Based Income Trading Gains Profit on Exchange Transactions Recovery from PWO Total Non-Interest Income

Provisions & Contingencies: Q1, FY11 and Q1, FY12 Provisions & Contingencies: Q1, FY11 and Q1, FY12 (Rs crore)Q1, FY11Q1, 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

Bank’s Treasury Highlights: Q1, FY12 Bank’s Treasury Highlights: Q1, FY12 Treasury Income stood at the level of Rs crore in Q1, FY12 Out of this, Trading Gains Stood at Rs crore in Q1, FY12 despite the hardening of 31 bps in the benchmark yields on GoI paper & lack-lustre equity markets. As of June 30, 2011, the share of SLR Securities in Total Investment was 87.95% The Bank had 84.5 % of SLR Securities in HTM and 14.8 % in AFS at end-June The per cent of SLR to NDTL as on 30 th June, 2011 was %. While the modified duration of AFS investments is 2.50 years; that of HTM securities is 4.90 years. Total size of Bank’s Domestic Investment Book as on 30 th June, 2011 stood at Rs 79,818 crore. Total size of Bank’s Overseas Investment Book as on 30 th June, 2011 stood at Rs 3,084 crore.

Overseas Business: Q1, FY12 Overseas Business: Q1, FY12 As on 30 th June, 2011, the “Overseas Business” contributed 25.7% to the Bank’s Total Business, 19.4% to its Gross Profit and 35.5 % to its Core Fee income. While the Cost-Income Ratio for Domestic Operations stood at % in Q1, FY12, it was more favourable at % for the Bank’s Overseas Operations. While the Gross NPA (%) in Domestic Operations stood at 1.77% at end-June, 2011, that for Overseas Operations was lower at 0.62%. The Gross Profit to Avg. Working Funds (%) for Overseas Operations stood at 1.40% in Q1, FY11 and at 1.49 % in Q1, FY12. NIM as % of Interest Earnings Assets in Overseas Operations improved from 1.31% in Q1, FY11 to 1.37 % in Q1, FY12. Return on Equity in Overseas Operations too improved from 17.55% in Q1, FY11 to % in Q1, FY12.

NPA Movement (Gross): Q1, FY12 NPA Movement (Gross): Q1, FY12 Particular( Rs crore) A. Opening Balance3, B. Additions during Q1, FY Out of which, Fresh Slippages C. Reduction during Q1, FY Recovery Upgradation71.48 PWO & WO Exchange Difference0.00 NPA as on 30 th June, 20113, Recovery in PWO in Q1, FY

Sector-wise Gross NPAs: Q1, FY12 versus Q1, FY11 Sector-wise Gross NPAs: Q1, FY12 versus Q1, FY11 SectorGross NPA (%) Q1, FY11 Gross NPA (%) Q1, 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 39 months (1 Apr’08 to 30 June’11), the Bank has restructured 74,050 accounts amounting Rs 7, crore. Within this, the loans worth Rs crore were restructured in Q1, FY12; Rs 1, crore were restructured in FY11, Rs 2, crore in FY10 & Rs 2, crore in FY09. For the period of 39 months, out of the total amount restructured, Rs 4, crore (57.1%) belonged to wholesale banking, Rs 1, crore (23.9%) to SMEs, Rs crore (8.1%) to retail and Rs crore (10.9%) to agriculture sector. About 71 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 at end-June, 2011 Sectoral Deployment of Credit at end-June, 2011 Sector% share in Gross Domestic Credit Agriculture13.6 Retail18.1 SME16.6 Wholesale37.4 Misc. including Trade 14.3 Total100.0%

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 [310 branches rolled out so far across five zones & 22 regions] Creation of automated & leaner Back Offices like: City Back Office (Automated cheque processing introduced in Mumbai on 17 Jan, 2011) Regional Back Office [five more offices are being opened coupled with technology changes for faster account opening]. Establishment of two 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 during FY11 [Exercise Concluded] Probationary Officers – 1,200 Specialist Officers (in various specialised disciplines) – 319 Clerks – 2,000 Campus Recruitment – 608 (Bank visited nearly 102 institutes including some of the premier Business schools of the country) Recruitment proposed in FY12 Probationary Officers – 1,200 Campus Recruitment – around 600 [Currently in the process of joining] Specialist officers (in various disciplines) – 200 Clerks – 2,000 New Hires Planned for Recruitment in FY12: 4,000 Bank introduced a massive Leadership Development Programme in Aug’10 under which 700 Senior Executives (AGMs/DGMs] have been rigorously trained so far. Bank proposes to inaugurate Baroda-Manipal School of Banking in August’10 to create the future stream of professionally trained bankers for itself

Thank you.