Bank of Baroda India’s Largest Nationalised Bank:

Well Poised for Growth

Performance Analysis: Q4 & Full Year , 2012-13 (FY13)

Dr Rupa Rege Nitsure Chief Economist

May 13, 2013

Bank of Baroda: Key Strengths …

Bank of Baroda is a 104 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 100 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

4, 276 Branches

Modern & Contemporary

Personality

Provides Financial Services to around

50.86 mln Customers Globally

A well-accepted & recognised Brand in

Indian banking industry

Results At A Glance (FY13) …

•Global Business Size: Rs 8,02,069 crore on 31st Mar, 2013 [up 19.3%, y-o-y]

•Market Share in Aggregate Deposits up from 3.70% in Mar’07 to 4.35% in Mar’13

•Market Share in Credit up from 3.53% in Mar’07 to 3.99% in Mar’13

•Global Loan-book: Rs 3,28,186 crore on 31st Mar, 2013 versus Rs 2,87,377 crore in FY12

•Global Deposit-base: Rs 4,73,883 crore on 31st Mar, 2013 versus Rs 3,84,871 crore in FY12

•Operating Profit at Rs 9,074 crore in FY13 [Rs 8,630 crore in FY13]

•Net Profit at Rs 4,481 crore in FY13 [Rs 5,007 crore in FY12]

•ROAA at 0.90% for FY13

•ROE at 14.59% for FY13

•NIM (Domestic): 3.11% for Domestic Operations & 2.66% for Global Operations

•CRAR (Basel II): 13.30%; Tier 1 Capital Ratio: 10.13%

•Gross NPA: 2.40%

•Net NPA: 1.28%

Domestic Branch Network ….

28532926 3100

3364

39044,276

0

500

1000

1500

2000

2500

3000

3500

4000

4500

FY08 FY09 FY10 FY11 FY12 FY13

No. of Domestic Branches

Regional Break-up of

Domestic Branches as on 31st Mar, 2013

Metro Urban Semi-Urban

Rural

914 764 1,162 1,436

•During the last five yrs, the Bank has added 1,423 brs to its domestic network.

•During FY13, the Bank opened 373 new brs and merged one branch in Jun’12.

•During FY14, the Bank proposes to open 625 new brs, with 143 brs in Tier I & II centres and 249 brs in Tier III to VI centres.

•Out of the newly opened brs during FY13, 82 belonged to ‘metro & urban’ areas; 121 to semi-urban areas & 170 to rural areas including 101 brs in unbanked rural centres.

•Out of the newly opened brs during FY13, 84 were opened in UP & Uttaranchal; 53 in Gujarat, 38 in Southern States, 48 in Rajasthan & 32 in Maharashtra & Goa (including Mumbai).

•Around 33.6% of the Bank’s network at the end of FY13 was situated in rural areas.

Rich Technology Platform….

•Bank’s entire domestic, overseas and RRB framework is CBS-compliant.

• While all domestic branches are migrated on MPLS network, the new branches are directly opened in MPLS network.

•Bank has IT facilities for online/offline account opening through Business Correspondents under Financial Inclusion.

•Bank’s retail & corporate customers enjoy several facilities under its Alternate Delivery Channels. Under Internet banking Bank offers various features such as fund transfers to self & third party (within BoB); RTGS/NEFT, online payment of bills & taxes, Custom duty payments, rail-ticket booking, temple donations, other donations, online subscription to IPOs/FPOs thru’ ASBA & institutional fee payment, IMPS (Immediate Payment services thru e-banking), Credit to Loan accounts etc. Bank’s Internet Banking portal is made available on all smart phones/ipads. The SMS alerts for all transactions are also implemented in the Internet Banking Portal.

•A View-based e-banking is enabled for all the RRBs sponsored by the Bank.

•Bank has implemented Internet Banking in 13 of its overseas territories, notably Oman, Tanzania, Uganda, Kenya, Mauritius, Seychelles, Botswana, New Zealand, UAE, Fiji, UK ,Ghana. and Australia.

•To provide safe online banking services to its customers & protect them from phishing attacks, Bank has implemented a Fraud Management Solution including two factor authentication.

•Bank has also implemented RaidFunds2India solution in all the major territories.

•Internet Payment Gateway has been implemented to facilitate e-commerce transactions in multi currencies across the globe.

Rich Technology Platform….

•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.

•The IMPS (Immediate Payment services) facility for Mobile to Account fund transfer and Mobile to Mobile Fund transfer is also launched for its customers.

•Bank’s Mobile Banking application is available on all Leading Brands including Blackberry, Android, iPhone, iPads, Windows, etc. A National Unified USSD Platform is also enabled through Mobile Banking.

•Bank’s ATM switch is upgraded to handle increasing volumes of ATM transactions ; the Bank’s ATM count has increased to 2,630 by 31st March, 2013.

•Bank’s ATM Switch also supports 8 international territories. Talking ATMs for visually impaired individuals, Regional Language screen selection option in Gujarati, Marathi and Tamil, receipt-printing in Hindi, etc.,are enabled in all ATMs.

•Bank has introduced Rupay Card, Rupay KCC Card, Brown Label ATMs. Bank has implemented Fraud management Solution in all its ATMs and POS. 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 through ATMs, school fee payments are facilitated and Mobile ATMs are introduced in several cities.

•Bank has set up two Contact Centres in Lucknow & Baroda to address the customer queries & grievances in a speedy fashion.

•Cash Management Solution is implemented to provide operational support to customers’ ALM.

Rich Technology Platform….

•Anti Money Laundering (AML) has been implemented in India and 22 of Bank’s overseas territories.

•Online Trading (Corporate and Retail) has been implemented in India.

•Bank has 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.

•Bank has a centralised SWIFT system for India & its 23 overseas territories.

•CTS -Cheque Truncation System implemented in Delhi and Grid based CTS was implemented in all southern States, Kolkata, Ludhiana and Chandigarh. CTS will be shortly implemented in Mumbai and Western Grid of Maharashtra, Gujrat and Madhya Pradesh.

•ACPC (Automated Cheque Processing Centre) for centralised and automated Inward/Outward clearing has been implemented in Mumbai, Surat and Ahmedabad.

•Back Office functions have been centralised at 70 City Back Offices & 10 Regional Back Offices (at Baroda, Jaipur, Lucknow, Bhopal, Coimbatore, Kolkata, Mumbai, Jamshedpur, New Delhi, Pune) to improve the delivery of services.

•Bank’s intranet portal has been revamped into a complete KNOWLEDGE MANAGEMENT solution with e-learning facilities.

•Travel Card in foreign currency is introduced.

•HRMs- A centralized database of employees is created to facilitate promotion exercise. HR policies are automated to promote transparency.

•Payroll- A centralised online system is created for salary payment, leave maintenance, etc.

Rich Technology Platform….

•Bank has created a Data Warehouse for providing flexible and interactive source of strategic information, CRM support, etc. to Top Management.

• Bank has fully automated its Loan Processing (Retail, Agri and SME) modules for better and quick customer service.

•Bank also provides a single click Online loan Application feature for Home Loan, Auto Loan and Education Loan.

•Bank has initiated Direct Benefit Transfer under Adhaar Payment Bridge System (APBS) and wages payment for Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

•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.

•Various technology projects like Virtualization, CPU and Memory up-gradation, Backup consolidation, RAC implementation, bandwidth up-gradation of branches are undertaken to support increasing business requirement.

•A robust Information Security Management System is put in place to protect technology against security threats.

•Bank’s Data Centre and Disaster Recovery Centre are ISO 27001 certified. A comprehensive Audit by external agencies is being carried out for all applications including CBS and DC/DR Infrastructure.

•BoB IIT – an exclusive IT Training Centre has been set up in Gandhi-Nagar to educate the Bank’s staff in all IT related products & services.

Concentration (%): Domestic Branch Network …

Rest of India,

24.00

UP &

Uttaranchal,

22.00South, 11.00 Rajasthan, 11.00

Maharashtra,

12.00

Gujarat, 20.00

Pattern of Shareholding: 31st Mar, 2013 …

• FIIs

17.2%

Corp.

Bodies

4.7%

Indian

Public

4.8% Others

0.3%

Mutual

Funds

5.7%

Insurance

Cos

11.9%

Govt. of

India

55.4%

• BOB is a Part of the following Indexes

BSE 100, BSE 200, BSE 500 & Bankex

Nifty, BankNifty, CNX 100, CNX 200, CNX 500

• BOB’s Share is also listed on BSE and NSE in the ‘Future and Options’ segment.

As on 31st Mar, 2013

•Share Capital: Rs 422.52 crore

•No. of Shares: 421.26 million

• Net worth: Rs 30,714 crore (up 17.0%, yoy)

• B. V. per share: Rs 729.11 (up 14.0%, yoy)

•Return on Equity: 14.59% for FY13

Select Awards & Accolades in FY13

•Bloomberg UTV Financial Leadership Award –Best PSU bank – 07.04.012, Mumbai

•Best CIO Award of BFSI sector from Institute of Public Enterprises, 2012 – June, Hyderabad

•The Sunday Standard FINWIZ 2012 Awards – 20.08.2012, New Delhi

•Best Indian Bank – Large (Runner Up)

•Best Public Sector Banker – Large (Runner Up)

•Dun & Bradstreet – Polaris Financial Technology Banking Awards – 24.08.2012, Mumbai

•Best Public Sector bank under the category Global Business Development

•Overall Best Public Sector Bank

•Banking Technology Award-2011 by IBA – 27.08.2012, Mumbai

•Use of Technology in Training & e-learning – Winner

•Best Customer Relationship initiatives – 1st Runner up

•Best use of Business Intelligence – 1st Runner up

•Best use of mobility tech in Banking – 2nd Runner up

•Best Risk management & Security initiatives – 2nd Runner up

•Silver Trophy for effective implementation of Automated storage Management & Oracle RAC from SKOCH Digital Inclusion Award- 2012, 04.09.2012, New Delhi

•Business India Best Bank Award 2012 – 14.09.2012, Mumbai

Select Awards & Accolades in FY13

•Forbes India Leadership Award – Best CEO Public Sector, 28.09.2012, Mumbai to the Bank’s CEO

•CNBC TV18 – ‘India Best Banks and Financial Institutions Award 2012’ – Best Public Sector Bank, 17.10.2012, Mumbai.

•Best Large Bank 2012 – Business World November 26th 2012 Issue

•Best Large Bank 2012 – Business Today – KPMG – December 2012

•Best Public Sector Bank Award by State Forum of Bankers Club, Kerala, December 2012, at Ernakulam

•Business Standard Banker of the Year (2011-12) was conferred on the Bank’s CEO on 23.03.2013.

•My FM Stars of the Industry Award for Excellence in Banking (PSU) – Silver awarded by Radio FM on 14.02.2013 in Mumbai.

•My FM Stars of the Industry Award for Excellence in Home Loan Banking – Bronze awarded by Radio FM on 14.02.2013 in Mumbai

•FE Best Banks Award 2011-12 for ‘Best PSU Bank’ awarded by Financial Express Group on 20.02.2013 in Mumbai

•“Strategic Communication and Leadership Award” by Asian Confederation of Business and World CSR Congress at Corporate Affairs Award Ceremony, Mumbai on 18/02/2013

•The Most Efficient Public Sector Bank by Dalal Street Investment Journal on 23/03/2013

India’s Macro Health: FY13 ….

•India’s economic growth reached the decade’s low of 5.0% in FY13 on the back of stalled mining and manufacturing sectors, weaker agricultural performance due to deficient rains and moderation in business related services.

•Headline (WPI) inflation declined from the average of 8.9% in FY12 to 7.3% in FY13, which allowed RBI to reduce the key policy rates by 100 bps and CRR by 75 bps during FY13.

•However, continued weaknesses in economic activity kept both the deposit & credit growth rates muted though the differential between deposit and credit growth hovered around 250 to 300 bps throughout the year with deposit growth outpacing the credit growth.

•This created persistent liquidity tightness in the system.

•Historically high level of current account deficit (estimated at 5.0% of GDP in FY13) and double-digit retail (CPI-based) inflation did not allow RBI to ease the monetary policy aggressively despite accentuated growth risks.

•Exports kept on contracting throughout the year and contracted by 1.8% in FY13 as a whole, imports increased by 0.44% and trade deficit expanded to US$ 191 billion.

•Yet Rupee/USD rate depreciated by 6.7% on y-o-y basis thanks to the strong FII inflows.

•India’s Government managed to contain fiscal deficit at 5.3% of GDP in FY13 & focusing on alleviating supply-side constraints by stepping up efforts to lift investments & remove bureaucratic impediments that have stalled a large number of projects in coal, power, steel and road sectors.

Business Expansion

Particular

(Rs crore) Mar’12 Dec’12 Mar’13

Y-O-Y

(%)

Change

Over

Dec’12 (%)

Global Business 6,72,248 7,14,051 8,02,069 19.3 12.3

Domestic Business 4,82,211 4,96,595 5,66,000 17.4 14.0

Overseas Business 1,90,038 2,17,456 2,36,069 24.2 8.6

Global Deposits 3,84,871 4,14,733 4,73,883 23.1 14.3

Domestic Deposits 2,80,135 2,95,388 3,41,706 22.0 15.7

Overseas Deposits 1,04,736 1,19,346 1,32,178 26.2 10.8

Global CASA Deposits 1,03,524 1,07,937 1,19,981 15.9 11.2

Domestic CASA 92,948 95,188 1,03,809 11.7 9.1

Overseas CASA 10,576 12,749 16,172 52.9 26.8

•Share of Domestic CASA at to 30.38% as on 31st Mar, 2013 in terms of Total Deposits & at 32.64% in terms of Core Deposits.

Business Expansion

Particular

(Rs crore) Mar’12 Dec’12 Mar’13

Y-O-Y

(%)

Change

Over

Dec’12(%)

Global advances (Net) 2,87,377 2,99,318 328186 14.2 9.64

Domestic Advances 2,02,075 2,01,208 224294 11.0 11.5

Overseas Advances 85,302 98,110 103891 21.79 5.9

Retail Credit

Of which: 35,668 35,392 38,046 6.7 7.5

Home Loans 14,133 15,205 16,045 13.5 5.5

SME Credit 34,512 39,083 44,974 30.3 15.1

Farm Credit 28,733 28716 28,739 0.02 0.08

Credit to Weaker Sections 15,863 16,091 17,045 7.5 5.9

CASA Position

Particular

(Rs crore) Mar’12 Dec’12 Mar’13

Y-O-Y

(%)

Change

Over

Dec’12 (%)

Global Saving Deposits 74,580 79,980 84,303 13.0 5.4

Domestic Savings Deposits

72,575 77,888 82,002 13.0 5.3

Overseas Savings Deposits

2,004 2,092 2,300 14.8 9.9

Global Current Deposits 28,944 27,958 35,678 23.3 27.6

Domestic Current Deposits

20,372 17,300 21,806 7.0 26.0

Overseas Current Deposits

8,572 10,658 13,872 61.8 30.2

Bank’s Profits & Its Components: Q4, FY12 & FY13

Particular

(Rs crore) Q4, FY12 Q4, FY13

YOY

(%)

Interest Income 8,119 9,072 11.7

Interest Expenses 5,321 6,258 17.6

NII (Spread) 2,798 2,814 0.6

Other Income 898 1,191 32.7

Staff Expenses 1,020 1,139 11.7

Total Expenses 6,965 8,080 16.0

Operating Profit 2,051 2,182 6.4

Provisions 522 1,116 113.8

Net Profit 1,518 1,029 -32.2

Bank’s Profits & Its Components: FY12 & FY13

Particular

(Rs crore) FY12 FY13

YOY

(%)

Interest Income 29,674 35,197 18.6

Interest Expenses 19,357 23,881 23.4

NII (Spread) 10,317 11,316 9.7

Other Income 3,422 3,631 6.1

Staff Expenses 2,986 3,450 15.5

Total Expenses 24,466 29,754 21.6

Operating Profit 8,630 9,074 5.1

Provisions 3,574 4,518 26.4

Net Profit 5,007 4,481 -10.5

Deposit & Loan Costs: Q4,FY12 to Q4,FY13

Particular (in %) Q4, FY12

Q1, FY13

Q2, FY13

Q3, FY13

Q4, FY13

Global Cost of Deposits 5.81 5.89 5.85 5.82 5.75

Domestic Cost of Deposits 7.17 7.30 7.36 7.33 7.41

Overseas Cost of Deposits 1.74 1.86 1.73 1.61 1.42

Global Yield on Advances 9.33 9.08 9.07 8.96 8.64

Domestic Yield on Advances 11.71 11.65 11.75 11.57 11.33

Overseas Yield on Advances 3.75 3.52 3.49 3.41 3.07

•Bank’s COD stood at 7.36% in domestic, at 1.62% in overseas & at 5.80% in global operations during FY13.

•Bank’s YOA stood at 11.58% in domestic, at 3.32% in overseas & at 8.90% in global operations during FY13.

Investment Yields & NIMs: Q4, FY12 to Q4,FY13

Particular (in %) Q4, FY12

Q1, FY13

Q2, FY13

Q3, FY13

Q4, FY13

Global Yield on Investment 7.53 7.71 7.79 7.75 7.74

Domestic Yield on Investment 7.69 7.83 7.92 7.88 7.85

Overseas Yield on Investment 3.84 4.91 4.64 4.67 5.05

Global NIM 2.96 2.73 2.71 2.65 2.51

Domestic NIM 3.44 3.22 3.23 3.08 2.93

Overseas NIM 1.68 1.55 1.54 1.58 1.49

•The Bank’s NIM in Domestic Operations stood at 3.11% and in Overseas Operations at 1.57% and in Global Operations at 2.66% during FY13.

Key Financial Ratios : FY13

•ROAA at 0.90% for FY13

•ROE at 14.59% for FY13

•NIM at 3.11% in Domestic Operations & at 2.66% in Global Operations

•Provision Coverage Ratio at 68.24% as on 31st March, 2013

•CRAR (Basel II) at 13.30% & Tier 1 Capital at 10.13% as on 31st March, 2013

•Cost-Income Ratio at 39.79% for FY13

•Earnings per Share at Rs 108.84 for FY13

•Book Value Per Share at Rs 729.69 for FY13

Non-Interest income: Q4, FY12 and Q4, FY13

(Rs crore) Q4, FY12 Q4, FY13 % Change

(Y-O-Y)

Commission, Exchange, Brokerage

344.69 376.41 9.2

Incidental Charges 87.63 89.93 2.6

Other Miscellaneous Income 58.91 59.25 0.6

Total Fee-Based Income 491.23 525.59 7.0

Trading Gains 137.01 288.17 110.3

Profit on Exchange Transactions 163.16 246.86 51.3

Recovery from PWO 106.39 130.30 22.5

Total Non-Interest Income 897.79 1,190.93 32.7

Non-Interest income: FY12 and FY13

(Rs crore) FY12 FY13 % Change

(Y-O-Y)

Commission, Exchange, Brokerage

1,226.08 1,257.36 2.6

Incidental Charges 316.23 337.41 6.7

Other Miscellaneous Income 253.86 263.68 3.9

Total Fee-Based Income 1,796.17 1,858.45 3.5

Trading Gains 606.67 617.29 1.8

Profit on Exchange Transactions 691.24 802.51 16.1

Recovery from PWO 328.25 352.37 7.4

Total Non-Interest Income 3,422.33 3,630.62 6.1

Provisions & contingencies: Q4, FY12 and Q4, FY13

(Rs crore) Q4, FY12 Q4, FY13

Absolute

Change

Provision for NPA & Bad Debts Written-off

926.19 1097.24 171.05

Provision for Depreciation on Investment

-271.31 211.16 482.47

Provision for Standard Advances 188.79 220.35 31.56

Other Provisions (including Provision for staff welfare)

-3.74 69.66 73.40

Tax Provisions -321.67 -482.53 -160.86

Total Provisions 518.26 1115.88 597.62

Provisions & contingencies: FY12 and FY13

(Rs crore) FY12 FY13

Absolute

Change

Provision for NPA & Bad Debts Written-off

1865.19 3449.44 1584.25

Provision for Depreciation on Investment

236.33 225.46 -10.87

Provision for Standard Advances 448.17 393.80 -54.37

Other Provisions (including Provision for staff welfare)

5.14 99.22 94.08

Tax Provisions 1018.84 350.51 -668.33

Total Provisions 3573.67 4518.43 944.76

Bank’s domestic treasury highlights: Q4, FY13

• Trading Gains sequentially improved from Rs 82 cr in Q1 to Rs 112 cr in Q2 to Rs 136

cr in Q3 to Rs 288 cr in Q4 due to improving market dynamics. Even Forex Profits

firmed up sequentially.

• As of Mar 31, 2013, the share of SLR Securities in Total Investment was 78.99%.

• The Bank had 79.71% of SLR Securities in HTM and 20.03%in AFS at end-Mar 2013.

• During the year FY13, the Bank shifted SLR securities worth Rs 1,265.42 cr (at book

value) from AFS to HTM on 3rd April and provided Rs 20.69 cr as “depreciation” on

shifting.

• The benchmark G-sec yield at the time of shifting ruled at 8.57%.

• The per cent of SLR to NDTL as on 31st Mar, 2013 was closer to 28.51%.

• As on 31st Mar, 2013, the modified duration of AFS investments was 2.66 years &

that of HTM securities was 5.18 years.

• Total size of Bank’s Domestic Investment Book as on 31st Mar, 2013 stood at Rs

1,18,275 crore.

Highlights of Overseas Business: FY13

• During FY13, the Bank’s “Overseas Business” contributed 29.4% to its Total Business, 24.6% to Gross Profit and 34.2% to Core Fee-based income (i.e., Commission, Exchanges, brokerage, etc.)

• Out of the Total Overseas Loan-book, 54.87% was Buyers’ Credit/ Export Credit; 26.37% in was Syndicated Loans/ECBs (mostly to Indian corporates) & 18.76% was Local Credit.

• While the GNPA (%) in domestic operations was at 2.87%, it was 1.37% for overseas operations as on 31st March, 2013.

• The Cost-Income Ratio in Overseas operations was more favourable at 16.83% in FY13 versus 44.77% in Domestic operations.

• In FY13, the NIM (as % of interest-earning assets) in Overseas operations stood at 1.57%; Gross Profit to Avg. Working Funds ratio at 1.49% and Return on Equity at 12.65%.

• During FY13, Bank opened 12 new branches in various countries like New Zealand, Uganda, Mauritius, Ghana, Oman, Kampala, Australia, Botswana & Dubai.

• The Outstanding Balance of restructured loans in overseas operations as on 31st Mar, 2013 was at Rs 3,977.93 crore.

NPA Movement (Gross): FY13

Particular ( Rs crore)

A. Opening Balance 4,464.75

B. Additions during FY13 6,843.80

Out of which, Fresh Slippages 6,572.51

C. Reduction during FY13 3,325.97

Recovery 625.57

Upgradation 340.93

PWO & WO 2,356.38

Other Adjustments 3.09

NPA as on 31st March, 2013 7,982.58

Recovery in PWO in FY13 352.37

GNPA movement in Domestic Advances: Quarter-Wise

Particular Q1, FY13 Q2, FY13 Q3, FY13 Q4, FY13

A. Opening Balance 3,881.83 4,696.22 5,285.43 65,98.90

B. Additions 1,120.60 1,234.46 1,880.76 1,723.35

Out of which, Fresh Slippages

1,085.16 1,178.28 1,781.17 1,657.48

C. Reduction 306.21 645.25 567.29 1,771.43

Recovery 118.33 172.21 179.72 325.21

Upgradation 127.58 78.22 192.83 411.21

PWO & WO 60.30 394.82 194.74 1035.01

D. Closing Balance 4,696.22 5,285.43 6,598.90 6,550.82

Sector-wise gross NPAs: End-Mar, FY12 & FY13

Sector Gross NPA (%)

End-Mar, FY12

Gross NPA (%)

End-Mar, FY13

Agriculture 3.99 4.90

Large & Medium Industries

1.06 3.29

Retail 1.91 1.76

Housing 1.94 1.30

SSI (Mfg) 2.24 4.26

Total MSME 3.19 3.44

Overseas Operations 0.68 1.37

Restructured Accounts (Domestic)

Year Outstanding as on 31st March (Rs crore)

Standard Category NPA Category Grand total

No. of A/Cs Amount No of A/Cs Amount No of A/Cs Amount

Up to 2008 152 301.94 75 106.89 227 408.83

2008-09 4349 1091.96 4725 488.91 9074 1580.87

2009-10 3263 1910.97 1777 303.96 5040 2214.93

2010-11 683 1517.67 371 372.46 1054 1890.13

2011-12 2414 7441.06 535 488.58 2949 7929.64

2012-13 17081 6816.00 1127 850.68 18208 7666.68

Total 27942 19,079.60 8610 2,611.48 36552 21691.08

Less std restructured a/cs ceased to attract higher provision and/or additional risk weight at end-Mar, 2013

7274 3051.66 7274 3051.66

TOTAL 20,668 16,027.94 8,610 2,611.48 29,278 18,639.42

Restructured Accounts (Domestic)

•Restructured accounts include the following amounts pertaining to other facilities of the borrowers not restructured but included in the restructured portfolio as per the RBI guidelines: Rs 80.26 cr up to end-Mar, 2008; Rs 706.04 cr in FY09; Rs 1044.64 cr in FY10, Rs 955.74 cr in FY11; Rs 1173.89 cr in FY12 and Rs 773 cr in FY13.

Upgradation/Degradation in Restructured Accounts during FY13

No of Accounts Amount (Rs crore)

Std. Restructured A/cs slipped to NPA

1,580 1,286.63

Restructured NPA a/cs upgraded to Standard

173 390.46

Segment wise outstanding in Restructuring as on 31.03.2013 (Rs crore)

Standard NPA Total

Restructured Accounts

No of borrowers

Amount (O/s)

No of borrowers

Amount (O/s)

No of borrowers

Amount (O/s)

Under CDR 42 3889.65 10 656.23 52 4545.88

Under SME 866 1914.95 1337 766.89 2203 2681.84

Other than CDR 19760 10223.34 7263 1188.36 27023 11411.70

Total 27278 16027.94 8610 2611.48 29278 18639.42

Sectoral Deployment of Credit at end-Mar, 2013

Sector % share in Gross Domestic Credit

Agriculture 12.6%

Retail 16.6%

SME 19.7%

Wholesale

37.5%

Misc. including Trade

13.6%

Total 100.0%

Bank’s BPR Project – Navnirmaan…..

•Project Navnirmaan has altogether -18- initiatives covering both Business Process Re-engineering and Organization Re-structuring, aimed at transforming the Bank’s branches into a sales and service centres through sustained Centralization to make possible Sales growth, superior customer experience and alternate channel migration.

•The most important initiatives are:-

•Conversion of all metro and urban branches into Baroda Next within a timeline [-1377- branches rolled out so far across -13- Zones and -56egions].

•Creation of automated and lean Back Offices like:

•City Back Office [Automated cheque processing introduced at Mumbai].

•Regional Back Office [-10- RBOs functioning (One in each Zone) –5- RBOs opened during current year] & issuance of Personalized Cheque Books [[No. of branches linked – 3908], more than 5,400 CASA are being opened per day.

•Establishment of -2- Contact Centres [at Lucknow and Baroda].

•Introduction of frontline automation [viz. Queue Management System and Cheque deposit Machines] at select branches for customer convenience.

•Creation of an Academy of Excellence

•Organization Restructuring

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 evaluated on (a) sales and (b) customer satisfaction during first stage of evaluation.

•Another evaluation carried out recently on (a) Customer satisfaction [at -177-] and (b) Employee satisfaction [at -171] Baroda Next branches, shows significant improvement.

•A certification procedure for Baroda Next branches has been introduced in terms of which process compliance/ adherence are being evaluated by Bank’s Internal inspectors and CSAT/ ESAT externally evaluated by engaging Market Research Agencies.

•To sustain Sales Growth, a new Sales Operating Model has been rolled out in -739- branches in -32- Regions over 27 cities.

•Out of -15- Mid-corporate branches planned, all are functional.

•Further centralization initiatives are being piloted to enable the branches to become a “Sales-cum-Service Outlet”.

•Bank’s Hi-tech City branch, Hyderabad has been transformed into an e-branch.

Bank’s HR Initiatives

• Recruitment in FY13

• Focused hiring efforts on a sustained basis year on year, to cater to

superannuation, sustained business growth and rapid branch expansion

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•New Hiring in FY12: 3,400 [2,973 joined up to 31st March, 2013)

Probationary Officers – 600 [ 429 joined up to Mar’13]

Clerks – 2,000 [1726 joined up to Mar’13]

Campus Recruitment – 250 [237 joined up to Mar’13]

Specialist officers – 150 [ 56 joined up to Mar’13]

Baroda Manipal Trainees -- 400 [525 joined up to Mar’13]

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• Massive skill upgradation and one structured three-month on-boarding programme

was carried out for the new joinees during FY13 to develop various Banking skills, esp.

in the specialised areas of Credit, Forex, Treasury, Soft Skills, etc.

Bank’s HR Initiatives……..

Project Udaan:

• A Large scale, comprehensive Leadership Development training covering almost 1,500

people (all branch heads of Urban / Metro Branches & AGMs/DGMs in the Bank)

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Project Sparsh:

• A focused HR transformation project – ‘SPARSH” has been initiated by the Bank - to

revamp its existing HR processes, structures and policies. Various initiatives like Talent

management, Succession planning, Creating a Scientific Staffing Model & Manpower

Planning,, Development and Capability Building, Performance Management, etc. have

been undertaken during FY12 and FY13.

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Baroda Manipal School of Banking:

• A school is opened as an innovative and new channel of resourcing of trained

manpower in the Bank. Around 180 students are being inducted into this school every

quarter for a focused grooming and a one-year full-time PG course in Banking is

tailored to the Bank’s specific requirements.

Economic Outlook & Guidance……..

•A growing list of global agencies including the World Bank are predicting a turnaround in India’s economy in FY14 on account of slowing inflation & narrowing trade deficit

•World Bank expects India’s growth to recover to 6.1% in FY14 & 6.7% in FY15 from 5.0% in FY13 – the lowest in a decade.

•Asian Development Bank says India will lead the upturn in South Asia growing 6.0% in FY14 & 6.5% in FY15 aided by the progress on reforms, expected normal monsoon & recovery in services sector growth.

•Institute of International Finance, Washington estimates GDP to rise to 5.8% in FY14 & 6.5% in FY15 on the back of moderating inflation, monetary policy easing & renewed thrust on reforms

•Goldman Sachs (a global investment firm) expects India’s growth to recover to 6.4% in FY14 on account of likely fiscal stimulus linked with elections, reform push to fast-track projects & improving global economic prospects.

• According to Citi group’s Report (Apr 30), investor sentiments towards India is improving due to falling commodity prices , expansionary global liquidity conditions & prospects of a good monsoon. The Report says “The consensus view of about 40 institutional investors in Europe across Indian asset classes - equities, rates and forex – was positive."

Major reasons for a likely pick-up in FY14

•Prospect of likely normal monsoon – This should help boost growth, rural incomes and help in moderating stubborn food inflation.

•Improvement in global food outlook - Record crops are expected in all the major agricultural nations of the world, which is reflected in the recent falling prices of major food grains. This too augurs well for food prices.

•Recent big crash in gold & crude oil prices- In average terms, crude oil prices have fallen by 11.4% & gold prices by 10.0% in y-o-y terms. As India is a large importer of both these commodities, a sharp fall in their prices means lower inflation, lower current account deficit and faster interest rate cuts.

•General elections in 2014 – Elections are typically accompanied by fiscal expansion in the preceding year. The Budget for FY14 too suggests an expansionary policy (29.4% increase in Plan expenditure).

•CCI is moving the needle: The Cabinet Committee on Investments is fast-tracking the projects.

•On Apr 22, it cleared investments in 25 oil & gas blocks (16 with conditional clearances but 9 without any conditions). This wil put to use US$ 13.4 bln in oil & gas exploration, which has already been incurred & will also bring in additional investment of US$ 2.5 bln.

•It has approved 13 projects of the power sector amounting US$ 6 bln. This includes 10 transmission, 2 thermal and 1 hydro project.

•Collectively, the CCI has approved projects worth more than 1% of GDP in its 4 meetings thus far.

Major reasons for a likely pick-up in FY14

•Progress on power debt restructuring – As per the plan, the state governments will take on half of the debt given to SEBs and convert them into long-term bonds. In return, banks will restructure the remaining 50% and provide a 3-year moratorium.

•The SEBs will have to raise power tariffs to prevent further operational losses.

•The key states are UP, Tamil Nadu, Rajasthan and Haryana. Of these, restructuring has already happened in Tamil Nadu. In UP, they are finalizing the total funding requirement from the banks.

•A majority of the states raised power tariffs in FY13. In FY14, another eight states have raised tariffs ranging from 3% to 24%. This is critical to ensure the long term viability of new power capacity.

• The Ministry of Power expects the discussions between bankers, SEBs, and state government officials to conclude over the next 15 days, and subsequently, lending to the SEBs to resume.

•Financial conditions are easing - This means interest rates are gradually coming down. Based on the VAR analysis, a 2.0% reduction in short-term rates seen over the past year can increase fixed investment by 5.4%. With further easing of interest rates, short-term rates may continue to decline and investment demand could increase further.

•Exports likely to recover – on improving global outlook (esp. for the US) and government efforts. The new trade policy on Apr 18th has announced steps like greater market and product diversification, extension of Zero Duty Export Promotion Capital Goods (EPCG) Scheme to all sectors, to revive exports.

•Slowdown in China’s growth – This is good for India as it will have depressing effect on major commodity prices like oil, coal, iron ore, steel, copper, etc.

Bank’s Guidance for FY14

•RBI’s Guidance - Aggregate Deposits to grow by 14.0% & Non-food credit by 15.0% in FY14 for the Indian banking industry

•Bank’s Guidance: The Bank would like to avoid aggression as the economy is still in the recovery mode, but will try to grow 1.5% to 2.0% over and above the industry average to protect its market share.

•With its strong liability franchise, the Bank is well poised to grow in FY14, if the investment climate improves along the expected lines.

• The focal points of business will be CASA expansion, marginal realignment in sectoral composition of credit in favour of retail and SME units (esp. agro-based & export-oriented units); fee-based income, domestic foreign business and aggressive credit monitoring and recovery efforts.

•On the qualitative side, the Bank’s endeavours at Business Process Re-Engineering, Creation of Future Pipeline of Leaders, Further development of Sales & Service Culture will continue with full vigour.

•This year, the Bank also been focusing on “Organisational Restructuring” to achieve its desired goals.

•In the past, it had created special outfits like RLFs, SMELFs, RBOs, Call Centres, MICR Centres and specialised branches for Recovery, NRI Business, Mid-Corporates, etc. which have paid off well

•It is now focusing on Wealth Management & Marketing and Government Business by creating special business verticals. As in the past, Information Technology will play an important role as a Business Enabler.

Thank you.