1. Performance Analysis: Q3 & Apr-Dec , FY11
Bank of Baroda
Bank of the Year, 2010 : India
(by Banker, London)
Performance Analysis: Q3 & Apr-Dec , FY11
Dr Rupa Rege Nitsure
Chief Economist
January 28, 2011

2. Bank of Baroda: Key Strengths
Bank of Baroda is a 102 years old State-owned Bank with modern & contemporary personality, offering banking products and services to Large industrial, SME, retail & agricultural customers across the country.
Modern & Contemporary
Personality
Uninterrupted Record
in Profit-making and
Dividend Payment
Overseas Business
Operations extend across
25 countries
through 82 Offices
Strong Domestic
Presence through
3, 259 Branches
Pioneer in many
Customer-Centric
Initiatives
Provides Financial
Services to over
38 mln Customers
Globally
First PSB to receive
Corporate Governance
Rating (CAGR-2)
Relatively Strong Presence
in Progressive States like
Gujarat & Maharashtra
Robust Technology
Platform with 100%
CBS in Indian Branches
A well-accepted &
recognised Brand in
Indian banking industry

3. Domestic Branch Network
Bank’s network of domestic branches as on 31st Dec., 2010 was 3,259 & no. of ATMs were 1,521.
During Apr-Dec, FY11, Bank opened 161 new branches and merged two existing branches.
Bank proposes to open 250 branches in Q4, FY11 with 81 in Metro, 48 in Urban, 98 in Semi-Urban & 23 in Rural areas.
Bank has a well-crystalised plan to open 614 branches during FY12.
Newly opened branches till end-Dec’10 are well-diversified across India with more thrust on Northern & Gujarat zones.
Around 35.6% of Bank’s network is situated in rural areas.
Regional Break-up of
Domestic Branches as on 31st Dec, 2010
Metro
Urban
Semi-Urban
Rural
703
607
789
1,160

4. Robust Technology Platform
As on 31st Dec. 2010, the entire domestic branch network, that is 3,259 branches and 25 extension counters of the Bank were on CBS.
Additionally, 50 branches of 15 overseas territories and 28 branches of eight overseas subsidiaries are on the CBS, covering 98.7% of the Bank’s overseas network.
The CBS implementation of the Bank’s RRBs commenced during FY11 & so far roll-out is done in 305 of 1,207 branches of five RRBs.
Bank’s Retail & Corporate Customers enjoy several facilities under internet banking such as fund transfers to self & third party; online payment of bills & taxes, rail-ticket booking, temple donations, online subscription to IPOs/FPOs thru’ ASBA & institutional fee payment.
Additionally, Bank also offers phone banking, online money transfer services, SMS alerts, Cash Mgmt services, online institutional trading, etc.
As on 31st Dec, 2010, Bank had 1,521 ATMs – 963 Onsite ATMs & 558 Offsite ATMs.
Mobile ATMs have been introduced in Ahmedabad, Pune, Lucknow & New Delhi.
Bank has implemented Multiple Accounts being linked to a single Debit Card (verified by Visa, CVV2) and also a Mobile Number registration thru’ ATMs in CBS for SMS alert.

5. Robust Technology Platform
Around 16 merchants have been registered under Internet Payment Gateway with average transactions of 75 per day.
On 28th Oct 2010, a Credit Card Mgmt System was made live; SMSs are generated online for all types of transactions like purchases, e-com transactions, etc. & e-statements are being sent to customers.
Anti Money Laundering (AML) has been implemented in India & 20 overseas territories.
Payment Messaging Solution (PMS) is implemented in 20 overseas territories & all authorised branches in India.
All Back Office functions are effectively centralised in Bank of Baroda with the implementation of City Back Offices and five Regional Back Offices.
Bank has developed a Software for National Rural Health Mission (NRHM) for Gujarat & Rajasthan states.
Bank has also taken a Green Initiative for implementation of Solar Power General System in 64 branches.

6. Concentration (%): Domestic Branch Network

7. Pattern of Shareholding: 31st Dec, 2010
As on 31st Dec., 2010
Share Capital Rs crore
No. of Shares million
Net worth Rs 16, crore
B. V. per share Rs
Return on Equity (annualised) %
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.

8. Comparative Performance of BoB Stock: Dec’09 to Dec’10
Index/Stock
Value
(31st Dec’09)
(31st Dec’10)
% Change
Sensex
17,464.81
20,509.09
17.4%
Nifty
5,201.05
6,134.50
17.9%
Bankex
10,030.80
13,379.73
33.4%
BankNifty
9,029.50
11,791.45
30.6%
BoB-BSE
511.30
896.50
75.3%
BoB-NSE
513.95
896.70
74.5%

9. Awards & Accolades
Bank of Baroda has received several awards during the year FY11 so far, for its consistent outstanding performance (both business & financial), superior management, dedication to excellence and contribution to rural economy & financial inclusion.
It is the only Indian bank whose “Rank” improved by 69 notches in just a year’s time from 283 to 214 in the Banker’s (London) Top 1,000 World Banks for the year 2010 and was selected as the Best Bank from India for the year 2010.
To name a few select awards,
(1) Bank of the Year for India by the Banker Awards (London)
(2) Business India’s “Best Bank” award for the year 2010
(3) Dainik Bhaskar-DNA India Pride Award 2010 – A Silver Trophy
(4) Dalal Street-KPMG DSIJ PSU Award 2010
(5) Runner Up in Financial Express Best Bank Awards under the Nationalised Bank Category
(6) Innovative Brand Builder Award by CMO Asia Awards, Singapore
(7) Skoch Challenger Award for “Bank of the Year”
(8) National Award 2010 – for Excellence in the field of Khadi & Village Industries Central Zone for PMEGP
(9) Skoch Financial Inclusion Award (in Jan 2011)
(10) President Zuma Award – For Outstanding Contribution to Advancement of South Africa at Durban (in Jan 2011)
(11) Banker of the Year (Announced today)

10. Indian Macro Scene during Dec’09 to Dec’10

11. Emerging Macro Backdrop
The IMF’s latest Global Update (Jan 25) projects world output to expand by 4.5% in 2011 – a slight upward revision
However, the world is in a two-speed economic recovery, with advanced economies still recovering slowly and EMEs & even some low-income countries relatively buoyant
According to the RBI’s latest assessment, India’s robust broad-based growth has put the economy back on its higher growth trajectory but sectoral imbalances pose risks to inflation
Weaknesses still persist in non-cereal food sector, core infrastructure sector, consumer non-durables, etc.
While several Business Optimism surveys exhibit optimism and private consumption expd. & gross capital formation have emerged as the key growth drivers, downside risks to growth remain in the form of
Sovereign debt risks spreading from Euro zone, which may adversely affect demand for exports
Strong capital inflows beyond the absorptive capacity of Indian economy may result in over-valuation of rupee & affect price competitiveness of exports
Rising domestic cost pressures and likely adverse impact on industrial growth
Subdued growth in core industrial sector
Persistent inflation and pressure on the RBI to raise rates.
Likely pressures on fiscal balances in the absence of one-off gains

12. Bank’s Business Growth (Y-O-Y): Dec’05 to Dec’10

13. Bank’s Profitability: Apr-Dec, FY06 to Apr-Dec, FY11
During the last five years, Bank’s Nine-Monthly Net Profit has grown at the robust CAGR of 36.7%.

14. Bank’s Asset Quality: Dec’04 to Dec’10
Gross NPA
Net NPA

15. Bank’s Business Performance: Dec’09 to Dec’10
Particular
(Rs crore)
Dec’09
Mar’10
Dec’10
Y-O-Y
(%)
Change
Over
March (%)
Global Business
3,71,288
4,16,080
4,88,721
31.6
17.5
Domestic Business
2,82,159
3,16,926
3,67,417
30.2
15.9
Overseas Business
89,129
99,153
1,21,304
36.1
22.3
Global Deposits
2,15,117
2,41,044
2,81,512
30.9
16.8
Domestic Deposits
1,66,159
1,85,283
2,15,378
29.6
16.2
Overseas Deposits
48,958
55,762
66,134
35.1
18.6
Global CASA Deposits
66,584
71,468
81,996
23.2
14.7
Domestic CASA
61,385
66,024
75,632
14.6
Overseas CASA
5,199
5,444
6,364
22.4
16.9
Share of Domestic CASA was healthily protected at 35.12% despite a sharp rise in interest rates on term deposits.

16. Bank’s Business Performance: Dec’09 to Dec’10
Particular
(Rs crore)
Dec’09
Mar’10
Dec’10
Y-O-Y
(%)
Change
Over
March (%)
Global advances (Net)
1,56,171
1,75,035
2,07,209
32.7
18.4
Domestic Advances
1,16,000
1,31,644
1,52,039
31.1
15.5
Overseas Advances
40,171
43,392
55,170
37.3
27.1
Out of Gross Domestic Credit,
Retail Credit
Of which:
22,301
24,248
29,606
32.8
22.1
Home Loans
9,810
10,313
11,895
21.3
15.3
SME Credit
20,233
21,111
25,255
24.8
19.6
Farm Credit
18,803
21,617
23,117
22.9
6.9
Credit to Weaker Sections
10,041
10,945
12,471
24.2
13.9

17. Bank’s Business Performance: Dec’09 to Dec’10
Particular
(Rs crore)
Dec’09
Mar’10
Dec’10
Y-O-Y
(%)
Change
Over
March (%)
Global Saving Deposits
49,542
52,544
61,540
24.2
17.1
Domestic Savings Deposits
48,175
51,258
60,092
24.7
17.2
Overseas Savings Deposits
1,367
1,286
1,448
5.9
12.6
Global Current Deposits
17,042
18,924
20,456
20.0
8.1
Domestic Current Deposits
13,210
14,766
15,540
17.6
5.2
Overseas Current Deposits
3,832
4,158
4,916
28.3
18.2

18. Bank’s Profits & NII: Oct-Dec, FY10 & FY11
Particular
(Rs crore)
Oct-Dec’09
Oct-Dec’10
Y-O-Y
(%)
Gross Profit
1,264.95
1,851.20
46.4
Net Profit
832.5
1,068.9
28.4
Net Interest Income
1,601.23
2,292.26
43.2
The Bank’s NII grew sequentially from Rs 1, crore in Jan-Mar’10 to Rs 1, crore in Apr-Jun’10 to Rs 2, crore in Jul-Sept’10 to Rs 2, crore in Oct-Dec’10 on the back of a healthy growth in credit and prudent management of liabilities.

19. Other Highlights: For Last Few Quarters
Particular (in %)
Q3, FY10
Q4, FY10
Q1, FY11
Q2, FY11
Q3, FY11
Global Cost of Deposits
4.69
4.42
4.39
4.50
4.53
Domestic Cost of Deposits
5.36
5.08
5.09
5.27
Overseas Cost of Deposits
2.24
2.06
1.95
2.02
1.94
Global Yield on Advances
8.60
8.23
8.17
8.40
8.58
Domestic Yield on Advances
10.21
9.76
9.79
10.17
10.34
Overseas Yield on Advances
3.96
3.74
3.67
3.75
3.70

20. Other Highlights: For Last Few Quarters
Particular (in %)
Q3, FY10
Q4, FY10
Q1, FY11
Q2, FY11
Q3, FY11
Global Yield on Investment
6.65
6.51
6.66
7.06
7.39
Domestic Yield on Investment
6.87
6.72
6.83
7.24
7.56
Overseas Yield on Investment
3.76
3.68
3.71
3.85
Global NIM
2.95
2.97
2.90
3.02
3.20
Domestic NIM
3.40
3.50
3.43
3.62
3.82
Overseas NIM
1.37
1.30
1.31
1.33
1.40

21. Key Financial Ratios : Apr-Dec, FY10 and Apr-Dec,FY11
Return on Average Assets at 1.30% [1.20% in Apr-Dec, FY10]
Earning per Share (annualised) at Rs [Rs in Apr-Dec, FY10]
Book Value per Share at Rs [Rs in Apr-Dec, FY10]
Return on Equity (ROE) at % [21.20% in Apr-Dec, FY10]
Capital Adequacy Ratio at 12.45% with Tier I Capital at 7.70%
Cost-Income Ratio declined from 46.26% to 38.31% (Y-o-Y)
Gross NPA ratio declined from 1.43% to 1.32% (Y-o-Y)
Net NPA ratio marginally increased from 0.31% to 0.36% (Y-o-Y).
NPA Coverage at the healthy level of 85.45% (with technical write-offs)
Incremental Delinquency Ratio at 0.91% (annualised) in Apr-Dec, FY11.

22. Key Productivity Indicators (Quarterly)
Q3, FY10
Q4, FY10
Q1, FY11
Q2, FY11
Q3, FY11
Business per Employee (Rs cr)
9.90
10.68
11.42
12.00
12.44
Business per Branch (Rs cr)
119.85
132.17
139.59
142.26
147.65
Profit per Employee (Rs lakh)
2.22
2.32
2.64
2.72
Profit per Branch (Rs lakh)
26.87
28.78
27.22
31.34
32.29

23. Non-Interest Income: Q3, FY10 and Q3, FY11
(Rs crore)
Q3, FY10
Q3, FY11
% Change
(Y-O-Y)
Commission, Exchange, Brokerage
230.92
244.54
5.9
Incidental Charges
82.25
74.11
-9.9
Other Miscellaneous Income
42.97
64.17
49.3
Total Fee-Based Income
356.14
382.82
7.5
Trading Gains
139.30
84.77
5.6
Profit on Exchange Transactions
98.71
147.09
-14.1
Recovery from PWO
65.50
61.47
-6.2
Total Non-Interest Income
659.65
676.15
2.5

24. Provisions & Contingencies: Q3, FY10 and Q3, FY11
(Rs crore)
Q3, FY10
Q3, FY11
% Change
(Y-O-Y)
Provision for NPA & Bad Debts Written-off
242.95
206.42
-15.0
Provision for Depreciation on Investment
-21.56
53.45 --
Provision for Standard Advances
17.35
36.91
112.7
Other Provisions (including Provision for staff welfare)
3.75
7.28
94.1
Tax Provisions
189.97
478.26
151.8
Total Provisions
432.46
782.32
80.9

25. Bank’s Treasury Highlights: Q3 and Apr-Dec, FY11
Treasury Income stood at the healthy level of Rs crore in Q3, FY11 and at Rs crore in Apr-Dec, FY11.
The Bank’s Trading Gains Stood at Rs crore in Q3, FY11 and at Rs crore in Apr-Dec, FY11.
As of December 31, 2010, the share of SLR Securities in Total Investment was 86.67%.
The Bank had 78.76% of SLR Securities in HTM and 20.90% in AFS at end-December 2010.
The per cent of SLR to NDTL as on 31st December, 2010 was 26.78%.
While the modified duration of AFS investments is 2.48 years; that of HTM securities is years.
Total size of Bank’s Domestic Investment Book as on 31st December, 2010 stood at Rs 68, crore.
Total size of Bank’s Overseas Investment Book as on 31st December, 2010 stood at Rs 3, crore.

26. Overseas Business: Apr-Dec, FY11
As on 31 Dec, 2010, the “Overseas Business” contributed 24.8% to the Bank’s Total Business, 16.7% to its Gross Profit and 32.1% to its Core Fee income.
While the Cost-Income Ratio for Domestic Operations stood at 41.09% in Apr-Dec, FY11, it was more favourable at 19.32% for the Bank’s Overseas Operations.
While the Gross NPA (%) in Domestic Operations stood at 1.60% at end-December, 2010, that for Overseas Operations was lower at 0.55%.
The Gross Profit to Avg. Working Funds (%) for Overseas Operations stood at 1.46% in Q3, FY11 and at 1.38% in Apr-Dec, FY11.
The Return on Avg. Net Worth for Overseas Operations stood at 16.41% at end-June, 2010; at 19.23% at end-Sept, 2010 & at 18.24% at end-Dec, 2010.
During Apr-Dec, FY11, the Bank raised US $ 350 mln for 5.5 years at 4.75% coupon (YTM: 4.886) under its MTN programme to finance asset growth in overseas operations.

27. Capital Adequacy & Capital Raising in H1, FY11
The Bank’s CRAR (Basel II) as on 31st Dec., 2010 was at 12.45%; of which Tier1 was at 7.70% and Tier 2 at 4.75%.
The size of Bank’s risk-weighted assets as on 31st December, 2010 was Rs 1,96,041 crore.
The Bank proposes to maintain its CRAR in the band of 13.0% to 13.5% in the coming years (with the Tier 1 between 8.0% and 8.5%).
The Bank raised Rs 2, crore during H1, FY11 by way of the following issues.
Subordinated Upper Tier II Bonds (maturing in 2025): Rs 500 crore in May, 2010
Subordinated Upper Tier II Bonds (maturing in 2025): Rs 500 crore in June, 2010
Subordinated Upper Tier II Bonds (maturing in 2025): Rs 500 crore in August, 2010
Perpetual [IPID] (maturing in 2020): Rs crore in August, 2010

28. NPA Movement (Gross): Apr-Dec, FY11
Particular
( Rs crore)
A. Opening Balance
2,400.69
B. Additions during Apr-Dec, FY11
1,230.53
Out of which, Fresh Slippages
1,194.62
C. Reduction during Apr-Dec, FY11
860.96
Recovery
349.37
Upgradation
141.87
PWO & WO
369.00
Exchange Difference
0.72
NPA as on 31st December, 2010
2,770.25
Recovery in PWO in Apr-Dec, FY11
186.75

29. Sector-wise Gross NPAs: Apr-Dec, FY10 & FY11
Agriculture
3.45
3.24
Large & Medium Industries
1.23
1.41
Retail
2.34
1.94
Housing
2.50
2.00
SME
2.91

30. Cumulative Position of Restructured Assets (Domestic)
During 30 months (1 Apr’08 to 31 Dec’10), the Bank has restructured accounts amounting Rs 6, crore.
Within this, the loans worth Rs crore were restructured in Apr-Dec, FY11.
For the period of 30 months, out of the total amount restructured, Rs 3, crore (54.6%) belonged to wholesale banking, Rs 1, crore (24.3%) to SMEs, Rs crore (9.4%) to retail and Rs crore (11.7%) to agriculture sector.
About 46 accounts (of Rs 1 crore & above) restructured on/after 1st 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.

31. Sectoral Deployment of Credit at end-Dec, 2010
% share in Gross Domestic Credit
Agriculture
15.0
Retail
19.2
SME
16.4
Wholesale
34.5
Miscellaneous
14.9
Total
100.0%

32. Bank’s Guidance & Vision
The Bank would continue with its thrust on sustainable & qualitative growth --
Would maintain its growth above the industry average to further expand the market share. From Mar’07 to Dec’10, the Bank’s market share in Deposits has gone up from 3.70% to 4.14% and in Credit from 3.53% to 4.11%.
The Bank would grow its deposits in the band of 20% to 22.0%; credit in the range of 23.0% to 24.0%, fee-based income in line with the loan-book and overall profitability by 25.0%, factoring in various downside risks stemming from the economic environment.
The Bank is building Strong Foundation for Future Growth by
working aggressively on enhancing the HR capabilities
working in a dedicated fashion on its BPR project in consultation with Mckinsey & Co.
focusing on development of marketing and sales & service culture
expanding the market share in both Indian and overseas territories
raising capital at every appropriate opportunity

33. Bank’s BPR Project - Navnirmaan
Roadmap of the Project Navnirmaan
Design : 4 Months
Pilot & Execution: 5 to 12 months
Roll-Out: 2 to 3 years
Project Navnirmaan has already entered the Implementation stage
There are in all 18 activities underway focusing on superior customer experience, customer convenience, capacity building of employees & leveraging technology.
As a part of rollout, all branches at metro & urban centres shall be brought under the new model of Baroda Next branch. So far, 144 brs across 4 zones & 13 regions have been rolled out.
Training system is being revamped and an Academy of Excellence is being created to meet the soft skill requirement of the employees besides developing a pipeline of business leaders. So far 2,300 employees at the rolled our Baroda Next brs have been trained by the team BPR.
Organisational restructuring is being undertaken to align the Bank with redesigned processes and prepare it for the challenges of ambitious growth.
Bank has entered automated cheque processing era in Mumbai on 17/01/2011.

34. Bank’s HR Initiatives Recruitment during FY11
Probationary Officers – 1,200
Specialist Officers (in various specialised disciplines) – 345
Clerks – 2,000
Campus Recruitment – 601
(Bank visited nearly 75 institutes including some of the premier Business schools of the country)
Total New Hires that have joined the Bank so far in FY11: 1,665
Tentative Recruitment Plans for FY12
Campus Recruitment – around 600
Specialist officers (in various disciplines) – 200
New Hires Planned for Recruitment in FY12: 4,000
Bank has launched two massive Leadership Development Programmes for 1,200 of its branch heads, 300 AGMs/DGMs – unparalleled in industry & first of its kind for an Indian state-owned Bank.

35. Thank you.