Bank of Baroda A Story of Commitment, Consistency & Credibility Financial Results: Q3 & Apr-Dec, (FY12) Dr Rupa Rege Nitsure Chief Economist January 25, 2012

Bank of Baroda: Comfortably Beats its Guidance for Q3, FY12 Bank of Baroda: Comfortably Beats its Guidance for Q3, FY12 Global Business Size : Rs 6,09,867 crore on 31 st Dec, 2011 [up 24.8 %, y-o-y] Market Share in Aggregate Deposits up from 3.70% in Mar’07 to 4.14 % in Dec’11 Market Share in Credit up from 3.53% in Mar’07 to 4.09 % in Dec’11 Global Loan-book : Rs 2,60,661 crore on 31 st Dec, 2011 [up 25.8 %, y-o-y] ROAA at 1.29 % - above 1.20% ROE at % - above 20.0% NIM ( Global ): 2.99 % - close to 3.0% NIM (Domestic): 3.51 % Operating Profit at Rs 2, crore – up 40.9 %, y-o-y Net Profit at Rs 1, crore – up 20.7 %, y-o-y CRAR (Basel II): %; Tier 1 Capital Ratio: 9.31% (without adding the first nine months’ profits of FY12) Gross NPA : 1.48 % Net NPA : 0.51 %

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 24 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, 691 Branches & 1,838 ATMs Modern & Contemporary Personality Provides Financial Services to over 43 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 31 st Dec, 2011 MetroUrbanSemi- Urban Rural ,236 Bank has added 983 branches in its Indian operations during Dec’06 to Dec’11. With this, its domestic branches totaled 3,691 at end-Dec, During Apr-Dec, FY12, the Bank opened 327 new branches. Bank still has 383 licences left with it to open branches during FY12. Bank’s newly opened branches during Apr-Dec, FY12 are well diversified across the nation, though a large no. of branches were opened in UP & Uttaranchal; Gujarat; Southern Zones & Rajasthan. Around 59.4% of the Bank’s network at the end-Dec, FY12 was situated in rural & semi-urban areas.

Robust Technology Platform Robust Technology Platform As on 31 st Dec 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. The SMS alerts & RTGS/NEFT transactions are also implemented in the Internet Banking Portal. Bank has implemented Internet Banking in 11 of its overseas territories, notably Oman, Tanzania, Uganda, Kenya, Mauritius, Seychelles, Botswana, New Zealand, UAE, Fiji, & UK. Bank has also implemented RaidFunds2India solution in all the major territories. 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. Bank’s Mobile Banking application is available on all Leading Brands including Blackberry, Android, iPhone, Windows, etc. Anti Money Laundering (AML) has been implemented in India and 20 of Bank’s overseas territories.

Robust Technology Platform Robust Technology Platform Bank has developed 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. Bank has a centralised SWIFT system for India & its 21 overseas territories. Internet Payment Gateway has been implemented to facilitate e-commerce transactions in multi currencies across the globe. 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 several cities. To provide safe online banking services to its customers & protect them from phishing attacks, Bank has implemented a Fraud Management Solution. Back Office functions have been centralised in the Bank at City Back Offices & eight Regional Back Offices ( at Baroda, Jaipur, Lucknow, Bhopal, Coimbtore, Kolkata, Mumbai & Jamshedpur) to improve the delivery of services. Bank has set up two Contact Centres in Lucknow & Baroda to fast addresse the customer queries & grievances. Cash Management Solution is implemented to provide operational support to customers’ ALM. 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 [As on 31 st Dec, 2011] Concentration (%): Domestic Branch Network [As on 31 st Dec, 2011]

Pattern of Shareholding: 31 st Dec, 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 31 st Dec, 2011 Share Capital: Rs crore No. of Shares: million Net worth: Rs 24, crore B. V. per share: Rs Return on Equity (Apr-Dec, FY12): % Return on Equity (Q3, FY12): %

Comparative Performance of BoB Stock: Dec’10 to Dec’11 Index/Stock Value (31 st Dec’10) Value (31 st Dec’11)% Change Sensex20, , % Nifty6, , % Bankex13, , % BankNifty11, , % BoB-BSE % BoB-NSE %

India’s Macro Health: Dec’10 to Dec’11 IndicatorApr-Nov, 2010Apr-Nov, 2011 Infrastructure Industries’ Growth (%, yoy) 5.0%4.6% IIP Growth (%, yoy)8.4%3.8% Exports (US$ Bln) Trade Deficit (US$ Bln) Dec, 2010Dec, 2011 Food Inflation15.1%0.7% Fuel Inflation11.3%14.9% Non-Food Mfg Inflation6.3%7.7% Overall Inflation9.5%7.5% PMI, Manufacturing Passenger Car sales (%, yoy) 28.9%10.9% End-Dec, 2010End-Dec, 2011 Bank Credit (%, yoy)24.4%15.9% Bank Deposits (%, yoy)16.5%16.9% FER (US$ Bln) Exchange Rate (Rs/US$)

Economic & Banking Outlook Global growth forecasts for 2012 have been revised downwards by most of the multilateral agencies & investments firms due to the European sovereign debt crisis & ripple effects of 2008 crisis. Developing countries like India would still lead the global growth but at slower pace. Weaker global growth and domestic capex slowdown has made RBI revise downwards Indian GDP growth projection to 7.0% from 7.6% for FY12. RBI expects the growth for FY13 to be slightly faster than FY12 growth, though investment slowdown of FY12 may impact the trend output growth – a major worry. Despite growth slowdown, RBI has retained its inflation projection at 7.0% due to the likely impact of rupee depreciation & repressed fuel inflation Inflationary risks to continue in FY13 due to continued price pressures from protein rich items, global energy prices, downward bias in rupee, etc. RBI has lowered indicative projection for non-food credit growth from 18.0% to 16.0% for FY12 Fiscal slippage has been crowding out private investment & fuelling inflationary pressures Going by the current trends, FY13 is likely to be qualitatively similar to FY12 unless Union Budget announces some pending reform measures and revives the financial markets

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

Bank’s Profitability: Dec’06 to Dec’11 Bank’s Profitability: Dec’06 to Dec’11 During the last five years, the Bank’s Gross Profit during Nine Months (Apr-Dec) has grown at the robust CAGR of 31.4% & Net Profit at 34.9%.

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

Bank’s Business Performance: Dec’10 to Dec’11 Bank’s Business Performance: Dec’10 to Dec’11 Particular (Rs crore) Dec’10Mar’11Dec’11 Y-O-Y (%) Change Over Mar’11 (%) Global Business4,88,7215,34,1166,09, Domestic Business3,67,4174,02,7314,35, Overseas Business1,21,3041,31,3851,74, Global Deposits2,81,5123,05,4393,49, Domestic Deposits2,15,3782,33,3232,54, Overseas Deposits66,13472,11694, Global CASA Deposits81,99687,58994, Domestic CASA75,63280,18186, Overseas CASA 6,3647,4077, Share of Domestic CASA was at 34.05% in terms of Total Deposits and at 35.45% in terms of Core Deposits as on 31 st Dec, 2011.

Bank’s Business Performance: Dec’10 to Dec’11 Bank’s Business Performance: Dec’10 to Dec’11 Particular (Rs crore) Dec’10Mar’11Dect’11 Y-O-Y (%) Change Over Mar’11 (%) Global advances (Net)2,07,2092,28,6762,60, Domestic Advances1,52,0391,69,4081,80, Overseas Advances55,17059,26980, Retail Credit Of which: 29,60632,43531, Home Loans11,89512,53913, SME Credit25,25527,36532, Farm Credit*23,11724,52925, Credit to Weaker Sections*12,47113,24514, * As of Last Reporting Friday

Bank’s Business Performance: Dec’10 to Dec’11 Bank’s Business Performance: Dec’10 to Dec’11 Particular (Rs crore) Dec’10Mar’11Dec’11 Y-O-Y (%) Change Over Dec’10 (%) Global Saving Deposits61,54064,45471, Domestic Savings Deposits60,09262,95970, Overseas Savings Deposits1,4481,4951, Global Current Deposits20,45623,13522, Domestic Current Deposits15,54017,22216, Overseas Current Deposits 4,9165,9126,

Bank’s Profits & NII: Apr-Dec & Q3, FY11 and FY12 Bank’s Profits & NII: Apr-Dec & Q3, FY11 and FY12 Particular (Rs crore) Apr-Dec’ FY11 Apr-Dec’ FY12 % Change (Y-o-Y) Q3, FY11Q3, FY12 % Change (Y-o-Y Gross Profit5, , %1, , % Net Profit2, , %1, , % Net Interest Income 6, , %2, , %

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

Key Financial Ratios : Q3, FY12 versus Q3, FY11 Key Financial Ratios : Q3, FY12 versus Q3, FY11 Return on Average Assets at 1.29% [ 1.34% in Q3, FY11] Earning per Share at Rs [Rs in Q3, FY11] Book Value per Share at Rs at end-Dec, 2011 [Rs at end-Dec, 2010 ] Return on Equity (ROE) at 21.35% [ 25.5% in Q3, FY11] Capital Adequacy Ratio at % (without inclusion of nine-monthly profits) with Tier I Capital at 9.31% Cost-Income Ratio at 31.79% [ 37.64% in Q3, FY11] Gross NPA ratio at 1.48% -- is one of the lowest for large-sized banks in India Net NPA ratio too low at 0.51% NPA Coverage at the healthy level of 80.51% (including the technical write-offs) Incremental Delinquency Ratio contained at 0.87% for Apr-Dec, FY12; This means 1.16% in annualised terms – contained in the close neighbourhood of 1.0% as guided by us.

Key Productivity Indicators Q3, FY12 versus Q3, FY11 Key Productivity Indicators Q3, FY12 versus Q3, FY11 ParticularQ3, FY11Q3, FY12 Business per Employee (Rs crore)# Business per Branch (Rs crore)# Profit per Employee (Rs lakh) Profit per Branch (Rs lakh) #: Total Business = Core Deposits + Net Advances

Non-Interest Income: Q3, FY11 and Q3, FY12 Non-Interest Income: Q3, FY11 and Q3, FY12 (Rs crore)Q3, FY11Q3, 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: Apr-Dec, FY11 and Apr-Dec, FY12 Non-Interest Income: Apr-Dec, FY11 and Apr-Dec, FY12 (Rs crore) Apr-Dec, FY11 Apr-Dec, FY12 % Change (Y-O-Y) Commission, Exchange, Brokerage % Incidental Charges % Other Miscellaneous Income % Total Fee-Based Income1, , % Trading Gains % Profit on Forex Transactions % Recovery from Written-off Accounts % Total Non-Interest Income1, , %

Provisions & Contingencies: Q3, FY11 and Q3, FY12 Provisions & Contingencies: Q3, FY11 and Q3, FY12 (Rs crore)Q3, FY11Q3, 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: Apr-Dec, FY11 and Apr-Dec, FY12 Provisions & Contingencies: Apr-Dec, FY11 and Apr-Dec, FY12 (Rs crore)Apr-Dec, FY11 Apr-Dec, FY12 Absolute 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 Provisions1, , Total Provisions2, ,

Bank’s Treasury Highlights: Q3, FY12 Bank’s Treasury Highlights: Q3, FY12 Treasury Income stood at the level of Rs crore in Q3, FY12. As on 31 st Dec, 2011, the Bank’s break-even yield on AFS was 8.55 %. As of Dec 31 st, 2011, the share of SLR Securities in Total Investment was 88.9 %. The Bank had 81.9% of SLR Securities in HTM and 17.6% in AFS at end- Dec The per cent of SLR to NDTL as on 31 st Dec, 2011 was 26.9%. While the modified duration of AFS investments is 2.79 years; that of HTM securities is 4.86 years. Total size of Bank’s Domestic Investment Book as on 31 st Dec, 2011 stood at Rs 79,833 crore. Total size of Bank’s Overseas Investment Book as on 31 st Dec, 2011 stood at Rs 3,967 crore.

Overseas Business: Apr-Dec & Q3, FY12 Overseas Business: Apr-Dec & Q3, FY12 As on 31 st Dec, 2011, the “Overseas Business” contributed 28.6% to the Bank’s Total Business, 19.6% to its Gross Profit and 36.1 % to its Core Fee income (i.e. Commission, Exchange & Brokerage) based on the first nine months’ data. While the Cost-Income Ratio for Domestic Operations stood at % in Q3, FY12, it was more favourable at % for the Bank’s Overseas Operations. While the Gross NPA (%) in Domestic Operations stood at 1.83% at end-Dec, 2011, that for Overseas Operations was lower at 0.69%. The Gross Profit to Avg. Working Funds (%) for Overseas Operations stood at 1.46 % in Q3, FY11 and at 1.63 % in Q3, FY12. NIM as % of Interest Earnings Assets in Overseas Operations improved from 1.40 % in Q3, FY11 to 1.64 % in Q3, FY12. Return on Equity in Overseas Operations was at % at end-Dec, 2011.

NPA Movement (Gross): Apr-Dec, FY12 NPA Movement (Gross): Apr-Dec, FY12 Particular( Rs crore) A. Opening Balance3, B. Additions during Apr-Dec, FY122, Out of which, Fresh Slippages1, C. Reduction during Apr-Dec, FY121, Recovery Upgradation PWO & WO Exchange Difference0.00 NPA as on 31 st Dec, 20113, Recovery in PWO in Apr-Dec, FY

Sector-wise Gross NPAs: Apr-Dec, FY12 versus Apr-Dec, FY11 Sector-wise Gross NPAs: Apr-Dec, FY12 versus Apr-Dec, FY11 SectorGross NPA (%) Apr-Dec, FY11 Gross NPA (%) Apr-Dec, 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 45 months (1 Apr’08 to 31 Dec’11), the Bank has restructured 78,239 accounts amounting Rs 9, crore. Within this, the loans worth Rs 3, crore were restructured in Apr-Dec, FY12. For the period of 45 months, out of the total amount restructured, Rs 6, crore (65.0%) belonged to wholesale banking, Rs 1, crore (20.0%) to SMEs, Rs crore (6.0%) to retail and Rs crore (9.0%) to agriculture sector. About 76 accounts (of Rs 1 crore & above) restructured on/after 1 st Apr, 2008 with aggregate outstanding of Rs 1, 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 infrastructure, iron & steel, cotton textiles, engineering, 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-Dec, 2011 Sector% share in Gross Domestic Credit Agriculture14.2% Retail17.0% SME17.6% Wholesale37.2% Misc. including Trade 14.0% Total100.0%

Major Awards & Accolades in FY12 so far.. 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 Award for Best Utilisation of Intellectual Resources Best Growing Large Bank by Business World-PWC Business Leadership Award by NDTV- Best PSB in 2011 Award for Excellence in Financial Reporting by ICAI in PSB category 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 Banker of the Year by Business World-PWC

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 [ 637 branches rolled out so far across Ten zones & 45 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

Bank’s BPR Project - Navnirmaan Bank’s BPR Project - Navnirmaan 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, Further evaluation initiatives are on. To sustain sales growth, a new Sales Operating Model has been rolled out in 53 branches in Mumbai, Surat & Baroda. Out of 15 mid-corporate branches planned, two are already functional and six are expected to commence the operations soon. Further “centralisation” initiatives are under progress to enable the Bank’s branches to become a full-fledged “Sales-Cum-Service-Outlet”. Bank’s Hi-tech City Branch in Hyderabad has been transformed into an e- branch.

Bank’s HR Initiatives Bank’s HR Initiatives Recruitment Plan for FY12 Total New Hires Planned for Recruitment: Approximately 4,000 Probationary Officers: 1,200 planned; 891 joined up to Dec’11 Campus Recruitment : 539 joined so far Specialist Officers : 58 joined; 50 more to join soon Clerks – 2,000 planned; 1,011 joined up to Dec’11; rest in the process of joining Project Udaan: The 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.

Abraham Lincon (1809 to 1865) had said “Always bear in mind that your own resolution to succeed is more important than any one thing.” Bank of Baroda’s consistently sound performance for the last 15 quarters despite global turbulence & domestic risks reflects nothing but its “ Firm Resolution to Succeed ”. Thank you