Presentation to AnalystsPresentation to Analysts Performance HighlightsPerformance Highlights

( Apr-Dec & Q3, 2009-10)( Apr-Dec & Q3, 2009-10)byby

Dr Rupa Rege NitsureDr Rupa Rege NitsureChief EconomistChief EconomistJanuary 27, 2010January 27, 2010

Bank of Baroda: Key StrengthsBank 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 receiveCorporate Governance

Rating (CAGR-2)

All Domestic OperationsCovered under

the CBS

Pioneer in many Customer-Centric

Initiatives

Strong Domestic Presence through

3,050 branches

Modern & ContemporaryPersonality

Provides Financial Services to over

35.20 million customers globally

A well-accepted & recognised Brand in

Indian banking industry

Domestic Branch NetworkDomestic Branch Network

2827

2899

3050

2700

2750

2800

2850

2900

2950

3000

3050

Dec'07 Dec'08 Dec'09

No. of Domestic Branches

Regional Break-up of Domestic Branches as on 31st

Dec, 2009

Metro Urban Semi-Urban

Rural

658 575 699 1,118

•Bank’s network of domestic branches as on 31st Dec., 2009 was 3,050 & no. of ATMs were 1,238.

•During Apr-Dec, FY10, Bank opened 128 new branches & merged four existing branches.

•Around 36.7% of the Bank’s branch network is located in rural areas.

•New branches are primarily opened in Metro, Urban & Semi-Urban areas in Southern States, UP & Uttaranchal, Gujarat & Maharashtra.

•Bank proposes to open 50 more branches during FY10.

Robust Technology PlatformRobust Technology Platform

•Bank achieved 100.0% CBS implementation in its domestic operations on 19th Sept’09.

•Additionally, 43 br. in 12 overseas territories & 27 br. in seven overseas subsidiaries covering 79.0% of total overseas business is also on the CBS.

•All CBS branches are enabled for inter bank remittances through RTGS and NEFT.

•Bank’s customers enjoy facilities like internet banking, phone banking, rapid funds2india – an online money transfer service, e-tax payment, NEFT/RTGS thru’ e-banking, sms alerts, etc.

• Global Treasury Solution is implemented in UK, UAE, Baharain, Hong Kong & India.

•Bank has made operational Corporate Cash Mgmt Services in all major cities of India

•Back office functions have been centralised for the branches & two regional back offices at Baroda & Jaipur have commenced operations for centralised account opening & issuance of personal cheque-books.

•AML System has been implemented in India & 14 overseas territories.

• Bank has introduced HRNES System comprising a 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.

•Online trading facility was launched for institutional trading on 17th October, 2009.

Concentration (%): Domestic Branch Concentration (%): Domestic Branch NetworkNetwork

Rest of India, 17.99

UP & Uttaranchal, 22.4

South, 11.51Rajasthan, 12.27

Maharashtra, 11.85

Gujarat, 23.98

Pattern of Shareholding: 31Pattern of Shareholding: 31stst Dec, 2009 Dec, 2009

Govt. of India53.8%

Banks0.1% Mutual

Funds10.2%

Corp. Bodies6.2%

FIIs14.8%

Indian Public5.7%

Insurance Cos8.7%

Others0.6%

• 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 31st Dec, 2009

• Share Capital Rs 365.53 crore

•No. of Shares 364.27 million

• Net worth Rs 13,532.76 crore

• B. V. per share Rs 371.47

•Return on Equity (annualised): 21.20%

Comparative Performance of BoB Stock: Apr-Dec’09

Index/StockValue(31st

Mar’09)

Value(31st

Dec’09)

% Change(Value)

Sensex 9,708.50 17,464.81 79.9%

Nifty 3,020.95 5,201.05 72.2%

Bankex 4,490.97 10,030.80 123.4%

BankNifty 4,133.20 9,029.50 118.5%

BoB-BSEBoB-BSE 234.55234.55 511.30511.30 118.0%118.0%

BoB-NSEBoB-NSE 234.35234.35 513.95513.95 119.3%119.3%

Indian Macro Scene: Apr-Dec’09

IIP Growth (%)

1.12.1

8.3

7.2

10.6

9.6

10.311.7

0

2

4

6

8

10

12

14

Apr'09 May'09 Jun'09 Jul'09 Aug'09 Sep'09 Oct'09 Nov'09

WPI (%)

7.31

4.78

1.46

0.46

-0.17-0.67-1.01

1.38

1.31

-2-1012345678

Apr

'09

Jun'

09

Aug

'09

Oct

'09

Dec

'09

Bank Credit Growth (%)

12.16

10.029.47

12.6314.09

15.7915.0915.86

18.04

02468

101214161820

Rs/USD- Exchange Rate

46.5346.5146.95

48.148.82

47.9447.9

47.07

50.08

44

45

46

47

48

49

50

51

Indian Macro Scene: Apr-Dec’09

•Macro scenario was quite mixed during Apr-Dec’09. •While there was a sharp deceleration in kharif foodgrain production (-16.2%) due to erratic & poor rainfall, the growth in industry (7.6% in Apr-Nov’09) & services (9.3% in Jul-Sept’09) sectors was quite strong.

• Demand conditions remained weak as reflected in a decline of 5.8% (y-o-y) in Apr-Sept’09 in Corporate Sales and a fall of 18.0% (y-o-y) in Indirect Tax Collections during Apr-Dec’09.

•Capital market activity remained strong on the back of a turnaround in industrial growth and robust capital inflows. During Apr-Dec’09, FIIs’ total investment in India (both equity & debt) was US $ 21.50 bln.

•FDI too remained strong. India attracted Foreign Direct Investment (FDI) to the tune of US $19.38 bln during Apr-Nov’09.

•Growth in non-food credit of SCBs was subdued during Apr-Dec’09, partly reflecting weaker investment demand. Whereas it grew by 7.1% over Mar’09, by just 12.1% on year.

•On the back of strong local shares, buoyant private capital inflows & weakening of the USD against all major currencies, Rupee appreciated by 8.10% against the USD during Apr-Dec’09.

•Food price inflation (close to 20.0% on year in Dec’09) has emerged as a major policy concern.

•Globally, Crude Price rose by almost 52.0% during Apr-Dec’09 from $52.38 to $79.36 per barrel – creating another strain on our fiscal balances.

BoB’s Business Growth (Y-O-Y): Dec’05 to Business Growth (Y-O-Y): Dec’05 to Dec’09Dec’09

9.0

31.0

21.923.2

27.6

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

Dec'05 Dec'06 Dec'07 Dec'08 Dec'09

Growth: Total Deposits (%)

33.8

46.8

23.0

32.4

23.5

0.0

10.0

20.0

30.0

40.0

50.0

Dec'05 Dec'06 Dec'07 Dec'08 Dec'09

Growth: Total Advances (%)

17.3

37.0

22.4

27.025.8

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Dec'05 Dec'06 Dec'07 Dec'08 Dec'09

Growth: Total Business (%)

16.5

18.9

14.6

17.7

24.6

0.0

5.0

10.0

15.0

20.0

25.0

Dec'05 Dec'06 Dec'07 Dec'08 Dec'09

Domestic CASA Growth (%)

Profits for Nine Months: Apr-Dec: FY06 Profits for Nine Months: Apr-Dec: FY06 to FY10to FY10

1428.43

1671.01

2214.10

2905.51

3306.48

2152.05

1474.51

1159.08

780.80618.20

0.00

500.00

1000.00

1500.00

2000.00

2500.00

3000.00

3500.00

Dec'05 Dec'06 Dec'07 Dec'08 Dec'09

Rs crore

Gross Profit Net Profit

•Net Profit has grown at a CAGR of 36.6% between Dec’05 & Dec’09

Asset Quality: Dec’04 to Dec’09Asset Quality: Dec’04 to Dec’09

8.31

1.43

1.5

2.11

3.02

5.74

0.310.37

0.54

0.67

1.1

2.11

0

1

2

3

4

5

6

7

8

9

Dec'04 Dec'05 Dec'06 Dec'07 Dec'08 Dec'09

%

0

0.5

1

1.5

2

2.5

3

3.5

4 %

GrossNPA

NetNPA

Business Performance: Dec’09 over Business Performance: Dec’09 over Dec’08Dec’08

Particular(Rs crore)

Dec’08 Dec’09 % Change

Global Business 2,95,091 3,71,288 25.8%

Domestic Business 2,33,855 2,82,159 20.7%

Overseas Business 61,236 89,130 45.6%

Global Deposits 1,68,616 2,15,117 27.6%

Domestic Deposits 1,36,516 1,66,159 21.7%

Overseas Deposits 32,100 48,958 52.5%

Global CASA Deposits 53,454 66,584 24.6%

Domestic CASA 49,283 61,385 24.6%

Overseas CASA 4,171 5,199 24.7

•Share of Domestic CASA consistently improved from 35.09% at endJun’09 to 36.17% at end-Sept’09 to 36.94% at end-Dec’09.

Business Performance: Dec’09 over Business Performance: Dec’09 over Dec’08Dec’08

Particular(Rs crore)

Dec’08 Dec’09 % Change

Global Advances (Net) 1,26,475 1,56,171 23.5%

Domestic Advances (Net) 97,339 1,16,000 19.2%

Overseas Advances (Net) 29,136 40,171 37.9%

Out of Gross Domestic Credit,

Retail Credit Of which:

18,805 22,301 18.6%

Home Loans 7,937 9,810 23.6%

SME Credit 13,710 20,233 47.6%

Farm Credit 15,655 18,803 20.1%

Credit to Weaker Sections

7,356 10,041 36.5%

Business Performance: Dec’09 over Business Performance: Dec’09 over Dec’08Dec’08

Particular(Rs crore) Dec’08 Dec’09 % Change

Global Saving Deposits40,181.32 49,542 23.3%

Domestic Savings Deposits39,043 48,175 23.4%

Overseas Savings Deposits 1,139 1,367 20.1%

Global Current Deposits13,273 17,042 28.4%

Domestic Current Deposits10,240 13,210 29.0%

Overseas Current Deposits3,033 3,832 26.4%

Profits & NII: For Nine Months & Q3, FY09 & Profits & NII: For Nine Months & Q3, FY09 & FY10FY10

Particular(Rs crore)

Apr-Dec,FY09

Apr-Dec,FY10

% Change

Gross Profit 2,905.51 3,306.48 13.8%

Net Profit 1,474.51 2,152.05 46.0%

Net Interest Income 3,652.62 4,194.53 14.8%

Particular(Rs crore)

Oct-Dec,FY09

Oct-Dec,FY10

% Change

Gross Profit 1,345.64 1,264.95 -6.0%

Net Profit 708.37 832.49 17.5%

Net Interest Income 1,461.84 1,601.23 9.5%

•Net Profit for Q3, FY09 includes the exceptional income of Rs 69.07 cr & Net Profit for Apr-Dec, FY09 includes Rs 95.01 cr due to winding up/dilution of Bank’s holdings in its subsidiaries.

Key Financial Ratios : Apr-Dec, 2009-10Key Financial Ratios : Apr-Dec, 2009-10

Return on Average Assets at 1.20% [1.04% at end-Dec, 2008]

Earning per Share (annualised) at Rs 78.77 [Rs 53.97 at end-Dec, 2008]

Book Value per Share at Rs 371.47 [Rs 302.28 at end-Dec, 2008]

Return on Equity (ROE) at 21.20% [17.85% at end-Dec, 2008]

Capital Adequacy Ratio at 14.65% with Tier I Capital at 9.31%

• Cost-Income Ratio increased from 40.49% to 44.05%(Y-o-Y).

Gross NPA ratio declined from 1.50% to 1.43% (Y-o-Y).

Net NPA ratio declined from 0.37% to 0.31%(Y-o-Y).

NPA Coverage improved to 78.42% [75.41% last yr] on prudent provisioning.

Other Highlights: Apr-Dec, FY09 & Other Highlights: Apr-Dec, FY09 & FY10FY10

Particular (In %) Apr-Dec’08

Apr-Dec’09

Global Cost of Deposits 5.73 5.11

Domestic Cost of Deposits 6.25 5.80

Overseas Cost of Deposits 3.52 2.54

Global Yield on Advances 9.58 8.71

Domestic Yield on Advances

10.94 10.17

Overseas Yield on Advances

5.21 4.47

Other Highlights: Apr-Dec, FY09 & Other Highlights: Apr-Dec, FY09 & FY10FY10

Particular (In %) Apr-Dec’08

Apr-Dec’09

Global Yield on Investment 7.18 6.71

Domestic Yield on Investment

7.30 6.92

Overseas Yield on Investment

5.88 3.96

Global NIM 2.94 2.65

Domestic NIM 3.17 2.96

Overseas NIM 1.97 1.48•NIM indicates Net Interest Income as % of Avg. Interest Earning Assets.

Other Highlights: Oct-Dec, FY09 & Other Highlights: Oct-Dec, FY09 & FY10FY10

Particular (In %) Oct-Dec’08

Oct-Dec’09

Global Cost of Deposits 5.95 4.69

Domestic Cost of Deposits 6.45 5.36

Overseas Cost of Deposits 3.78 2.24

Global Yield on Advances 9.91 8.60

Domestic Yield on Advances

11.25 10.21

Overseas Yield on Advances

5.58 3.96

Other Highlights: Oct-Dec, FY09 & Other Highlights: Oct-Dec, FY09 & FY10FY10

Particular (In %) Oct-Dec’08

Oct-Dec’09

Global Yield on Investment

7.87 6.65

Domestic Yield on Investment

7.97 6.87

Overseas Yield on Investment

6.78 3.76

Global NIM 3.30 2.95

Domestic NIM 3.61 3.40

Overseas NIM 2.08 1.37

•Sequentially, the NIM has improved from 2.37% in Q1, FY10 to 2.63% in Q2, FY10 to 2.95% in Q3, FY10 in global operations & from 2.57% to 2.89% to 3.40% in domestic operations.

Non-Interest Income: Apr-Dec, FY09 & FY10Non-Interest Income: Apr-Dec, FY09 & FY10

(Rs crore)Apr-Dec,

2008Apr-Dec

2009

%Chang

e

Comm., Exchange, Brokerage

491.62 623.95 26.9%

Incidental Charges 256.19 224.41 -12.4%

Profit on Exchange Transactions

286.01 279.26 -2.4%

Recovery from PWO 180.54 182.05 0.8%

Trading Gains 504.28 516.43 2.4%

Other Misc. Income 90.37 131.92 46.0%

Total Non-Interest Income

1,809.01 1,958.02 8.2%

Non-Interest Income: Oct-Dec, FY09 & Non-Interest Income: Oct-Dec, FY09 & FY10FY10

(Rs crore) Oct-Dec, 2008

Oct-Dec, 2009

%Change

Comm., Exchange, Brokerage

172.87 230.92 33.6%

Incidental Charges 84.27 82.25 -2.4%

Profit on Exchange Transactions

136.70 98.71 -27.8%

Recovery from PWO 82.36 65.50 -20.5%

Trading Gains 346.79 139.30 -59.8%

Other Misc. Income 23.50 42.97 82.9%

Total Non-Interest Income

846.49 659.65 -22.1%

Provisions & Contingencies: Apr-Dec, FY09 & Provisions & Contingencies: Apr-Dec, FY09 & FY10FY10

(Rs crore) Apr-Dec’08

Apr-Dec’09

Provision for NPA / Bad Debts Written-off

101.32 723.63

Prov. For Dep. on Investment

570.42 -442.43

Prov. For Std. Adv. 59.66 27.42

Other Provisions (including Prov. For staff welfare)

20.92 11.25

Tax Provisions 773.69 834.56

Total Provisions 1,526.01 1,154.43

Provisions & Contingencies: Oct-Dec, FY09 & Provisions & Contingencies: Oct-Dec, FY09 & FY10FY10

(Rs crore) Oct-Dec’08

Oct-Dec’09

Provision for NPA/ Bad debts written-off

100.10 242.95

Prov. For Dep. on Investment

232.87 -21.56

Prov. For Std. Adv. 3.80 17.35

Other Provisions (including Prov. For staff welfare)

13.32 3.75

Tax Provisions 356.25 189.97

Total Provisions 706.34 432.46

Treasury Highlights: As on 31Treasury Highlights: As on 31stst Dec., Dec., 20092009• Treasury Income was marginally up 0.7% from Rs

790.29 crore in Apr-Dec, FY09 to Rs 795.69 crore in Apr-Dec, FY10.

• As of Dec 31st 2009, the share of SLR Securities in Total Investment was 86.91%.

• The Bank had 79.45% of SLR Securities in HTM and 19.94% in AFS at end-Dec 2009.

• The per cent of SLR to NDTL as on 31st Dec., 2009 was 27.57%.

• While the modified duration of AFS investments is 2.18 years; that of HTM securities is 4.52 years.

• Total size of Bank’s Domestic Investment Book as on 31st Dec 2009 stood at Rs 53,854 crore.

• Total size of Bank’s Overseas Investment Book as on 31st Dec 2009 stood at Rs 3,803 crore.

Overseas Business: Apr-Dec, 2009-10Overseas Business: Apr-Dec, 2009-10

• In Apr-Dec, FY10, the “Overseas Business” contributed 24.0% to the Bank’s Total Business, 21.6% to its Gross Profit and 41.7% to its Fee-based income.

• While the Cost-Income Ratio for Domestic Operations stood at 50.47% in Apr-Dec, FY10, it was just 22.23% for Overseas Operations.

• While the Gross NPA (%) in Domestic Operations stood at 1.73% at end-Dec, 2009, that for Overseas Operations was just 0.53%.

• “Gross Profit to Avg. Working Funds” ratio for Overseas Operations was 1.57% in Q3, FY10 comparable to 2.22% for Domestic Operations.

• On the Overseas Investment Book of Rs 3,803 crore, the Bank held Provisions worth Rs 213.73 crore during Apr-Dec, FY10.

Capital Adequacy & Capital Raising: Apr-Dec, Capital Adequacy & Capital Raising: Apr-Dec, FY10FY10

• Bank’s CRAR as on 31st Dec, 2009 stood at 14.65%; of which Tier1 was at 9.31% and Tier 2 at 5.34%.

• The size of Bank’s risk-weighted assets as on 31st Dec, 2009 was Rs 1,50,800 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 Apr-Dec, 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 2009.

• 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): Apr-Dec, NPA Movement (Gross): Apr-Dec, 2009-102009-10

Particular Amount in Rs crore

A. Opening Balance 1,842.92

B. Additions during Apr-Dec, FY10

1,216.00

Out of which, Fresh Slippages

1,180.66

C. Reduction during Apr-Dec, FY10

798.64

Of which,

Recovery 275.93

Upgradation 187.68

PWO & WO 323.01

Exchange Difference 12.02

NPA as on 31st Dec, 2009 2,260.28

Recovery in PWO in Apr-Dec, FY10

182.05

Gross NPAs: Sectoral Break-up at end-Gross NPAs: Sectoral Break-up at end-Dec, 2009Dec, 2009

Sector Gross NPA (%)

Apr-Dec’08

Gross NPA (%)

Apr-Dec’09Agriculture 2.25 3.45

Large & Medium Ind.

0.86 1.23

Retail 2.85 2.34

Housing 3.43 2.50

SME 2.79 2.91

Restructured Loans : April, 2008 to Restructured Loans : April, 2008 to December, 2009December, 2009

• During 21 months (1 Apr’08 to 31 Dec’09), Bank has restructured 65,487 accounts amounting Rs 4,801.35 crore.

• Within this, the loans worth Rs 248.36 were restructured in Q3, FY10.

• For the period of 21 months, out of the total amount restructured Rs 2,473.47 cr belonged to wholesale banking, Rs 1,208.04 cr to SMEs, Rs 541.38 cr to retail and Rs 578.46 cr to agriculture sector.

• About 54 accounts above Rs 25 lakh restructured in 2008-09 & in first nine months of 2009-10 slipped during Apr-Dec, FY10 and they were worth just Rs 187.39 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 Apr-Sectoral Deployment of Credit in Apr-Dec, FY10Dec, FY10

Sector % share in Gross Domestic

Credit

Agriculture 15.94%

Retail 18.91%

SME 17.16%

Trading plus Others 16.45%

Wholesale 31.54%

Total 100.0%

Emerging Economic ScenarioEmerging Economic Scenario

• Global economic recovery, currently underway, is expected to slow later in 2010, as the impact of fiscal stimulus wanes.

• According to the World Bank’s latest assessment, financial markets in developed countries remain troubled and private sector demand lags amid high unemployment.

• However, Asia is much better placed as domestic demand in Asian countries is replacing exports as the main growth driver, led by China.

• While India is likely to post the growth bet.’ 6.5% to 6.7% 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.• With both growth & inflation heading towards 8.0%, the RBI

would start normalising monetary policy from Jan 29th policy review.

• Hence, upward pressure to continue on long-term yields.• Government’s gross borrowings are to stay substantial in FY11

and non-food credit growth will gradually pick up. We expect credit growth around 18.0% (y-o-y) in FY11.

• Key risks: high food & oil prices, a double-dip, etc.• Positives: strong net capital inflows & early signs of investment

rebound.

Bank’s Guidance & VisionBank’s Guidance & Vision •The Bank would continue with its thrust on growth with quality & 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.

Thank you.