Presentation to AnalystsPresentation to Analysts Performance HighlightsPerformance Highlights

( Q1, 2008-09)( Q1, 2008-09)byby

Dr Rupa Rege NitsureDr Rupa Rege NitsureChief EconomistChief Economist

July 29, 2008July 29, 2008

Bank of Baroda: Key StrengthsBank of Baroda: Key Strengths BoB is a leading 100 years old PSB in India with modern and

contemporary personality, offering banking products and services to industrial and commercial, retail and agricultural customers across the country.

Steady Movement towards International best practices –

Preparing financials under US GAAP

Uninterrupted Record in Profit-making and

Dividend Payment

Overseas Business Operations extend across

25 countries through 72 Offices

First PSB to receiveCorporate Governance

Rating (CAGR-2)

Rapid & Significant Technology Progression

in FY06,FY07 & FY08

Pioneer in many Customer-Centric

Initiatives

Strong Domestic Presence through

2,851 branches

Modern & ContemporaryPersonality

Provides Financial Services to around

33 million customers globally

A well-accepted & recognised Brand in

Indian banking industry

Strong Domestic Branch NetworkStrong Domestic Branch Network

27032735

2851

2600

2650

2700

2750

2800

2850

2900

Jun'06 Jun'07 Jun'08

No. of Branches •The Bank has a network of 2,851 domestic branches, as it merged 2 branches in Q1, FY09. •About 38.44% of the domestic branches are located in rural areas.•Of the total no of 2,851 branches, 350 are Agriculture Thrust branches. •Around 661 branches are located in minority concentrated districts. • There are 127 specialised branches (including 19 service branches) as on date.

Regional Break-up of Domestic Branches

Metro Urban Semi-Urban

Rural

612 519 624 1,096

Robust Technology PlatformRobust Technology Platform•As of date, the Bank has completed CBS Rollout in 1,759 domestic branches covering more than 90.0% of the Bank’s domestic business.

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

•CBS has also been implemented in 62 overseas branches of Bank/its Subsidiaries.•The Bank’s ATM network has increased to 1,146 from a mere 170 in 2005.

•This includes two Biometric ATMs installed on a pilot basis in Balsar/Rae Bareli districts.•Bank has installed 47 ATMs at Railway Stations.

•Many novel products like RapidFunds2India, Baroda Connect, Online Tax Payment Facility, Depository Facility, Baroda Easy Pay, Online Payment of Railway Ticket Booking, etc. have been developed.

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

Rest of India, 25.36

UP & Uttaranchal, 21.4

South, 10.52

Rajasthan, 12.03

Maharashtra, 7.33

Gujarat, 23.36

Present Pattern of ShareholdingPresent Pattern of Shareholding

Govt. of India53.8%Banks

0.4% Mutual Funds11.0%

Corp. Bodies1.4%

FIIs19.6%

Indian Public6.5%

Insurance Cos6.3%

Others1.0%

• 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 3oth June 2008

• Share Capital Rs 365.53 crore•No. of Shares 364.27 million• Net worth Rs 9,907.08 crore • B. V. per share Rs 271.97•Return on Equity: 14.97%

Business Growth: June’04 to June’08Business Growth: June’04 to June’08

12.49 12.9120.12

22.73 26.49

0

5

10

15

20

25

30

Jun'04 Jun'05 Jun'06 Jun'07 Jun'08

Growth: Total Deposits (%)

12.61

19.96

37.48

27.5

42.11

05

1015202530354045

Jun'04 Jun'05 Jun'06 Jun'07 Jun'08

Growth: Total Advances (%)

12.5315.28

26.19 24.55

32.58

05

101520253035

Jun'04 Jun'05 Jun'06 Jun'07 Jun'08

Growth: Total Business (%)

37.7537.46

41.19

38.3736.86

343536373839404142

Jun'04 Jun'05 Jun'06 Jun'07 Jun'08

CASA (%) in Domestic Deposits

Profits: June’03 to June’08Profits: June’03 to June’08

860.19

540.24596.48

555.86503.52

644.46

370.86330.83

163.31163.33

292.98244.47

0

100

200

300

400

500

600

700

800

900

1000

Jun'03 Jun'04 Jun'05 Jun'06 Jun'07 Jun'08

Rs crore

Gross Profit Net Profit

Asset Quality: June’03 to June’08Asset Quality: June’03 to June’0811.02

10.41

7.21

4.062.78

1.86

4.21

2.9

1.470.92 0.67 0.52

0

2

4

6

8

10

12

Jun'03 Jun'04 Jun'05 Jun'06 Jun'07 Jun'08

Gross NPAs (%)

Net NPAs (%)

Business Performance: Q1, 2008-09Business Performance: Q1, 2008-09•Global Business up 32.6%(Y-o-Y) to Rs 2,66,122 crore at end-June 2008

•Domestic Business up 29.4%(Y-o-Y) to Rs 2,09,135 crore•Overseas Business up 24.6%(Y-o-Y) to Rs 56,987 crore

•Global Deposits up 26.5%(Y-o-Y) to Rs 1,54,908 crore

•Domestic Deposits up 25.2%(Y-o-Y) to Rs 1,23,816 crore•Overseas Deposits up 31.7%(Y-o-Y) to Rs 31,093 crore

•Domestic CASA share improved from 35.93% at end-Mar’08 to 36.86% at end-June’08•Global Advances up 42.1% (Y-o-Y) to Rs 1,11,214 crore

•Domestic Advances up 35.8% to Rs 85,319 crore•Overseas Advances up 67.7% to Rs 25,895 crore

Business Performance: Q1, 2008-09Business Performance: Q1, 2008-09•Retail Credit up 18.8%(Y-o-Y) to Rs 16,908 crore at end-June 2008

•Retail Credit now forms 19.6% of Gross Domestic Credit•Home Loan Book up 15.1%(Y-o-Y) to Rs 7,267 crore

•SME Credit up 19.5% (Y-o-Y) to Rs 12,087 crore•Farm Credit up 31.0% (Y-o-Y) to Rs 13,729 crore•Priority Sector Credit up 28.02%(Y-o-Y) to Rs 32,836 crore.•Bank’s credit to weaker sections was up 63.6% (Y-o-Y) to Rs 6,247 crore.•Debt waiver & relief scheme was successfully implemented by the Bank in given timeframe involving debt waiver amount of Rs 502 crore & debt relief of Rs 164 crore, thereby upgrading/liquidating the NPA of Rs 242 crore.

Key Financial Ratios : Q1, 2008-09Key Financial Ratios : Q1, 2008-09 Return on Average Assets (ROAA) at 0.81%[1.01% at Q1, FY08]

Earning per Share (annualised) at Rs 40.72 [Rs 36.32 at Q1, FY08]

Book Value per Share at Rs 271.97 [Rs 240.56 at Q1, FY08]

Return on Equity (ROE) at 14.97% [15.10% at Q1, FY08]

Capital Adequacy Ratio at 13.19% (Tier 1 : 7.89%, Tier 2 : 5.30%)

• Cost-Income Ratio declined from 53.69% to 45.20%(Y-o-Y).

Gross NPA ratio declined to 1.86% from 2.78% (Y-o-Y).

Net NPA ratio declined to 0.52% from 0.67%(Y-o-Y).

NPA Coverage at the level of 72.48%

Operating Profits: Q1, 2008-09Operating Profits: Q1, 2008-09

•Increase in “Net Interest Income” of 16.9% (Y-o-Y), “Non-Interest income” of 20.8% and a moderate growth in “Total Expenses” of 23.8% enabled the Bank to increase its Operating Profits by a decent 33.5% in Q1, FY09 (Y-o-Y).

644.46860.19

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400

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600

700

800

900

Rs Crore

Jun'07 Jun'08

33.5%

Net Profits: Q1, 2008-09Net Profits: Q1, 2008-09

330.84

370.86

310

320

330

340

350

360

370

380

Jun'07 Jun'08

•The level of quarterly Net Profit at Rs 370.86 crore at end-June, 2008 reflects a growth of 12.10% (Y-o-Y) despite severe pressures on cost of funds and a downturn in economic cycle.

12.10%

Other Highlights: Q1, 2008-09Other Highlights: Q1, 2008-09 Net Interest Margin (as % of interest-bearing assets) in Global

Operations stood at 2.76% at end-June, 2008 as against 3.02% at end-June 2007 (after making adjustment for the “amortization” factor as per the RBI guidelines).

Cost of Deposits in Global Operations increased from 5.42% to 5.55%

Cost of Deposits in Domestic Operations increased from 5.52% to 6.05%

Cost of Deposits in Overseas Operations decreased from 4.99% to 3.43%

Yield on Advances in Global Operations declined from 9.51% to 9.08%

Yield on Advances in Domestic Operations marginally improved from 10.24% to 10.34%

Yield on Advances in Overseas Operations declined sharply from 6.49% to 4.91%.

Yield on Investments in Global Operations, however, improved from 6.31% to 7.22%.

Other Highlights: Q1, 2008-09Other Highlights: Q1, 2008-09

Treasury Income (Profit on Sale of Investments) declined by 31.7% (Y-o-Y) to Rs 88.99 crore.

Fee-based Income (Commission, Exchange & Brokerage) sharply improved by 44.5% (Y-o-Y) to Rs 155.52 crore.

Cash Recovery (NPA & PWO) during Q1, 2008-09 stood at healthy Rs 177 crore as against Rs 128 crore during 2006-07 reflecting a growth of 38.0%.

Profit from Exchange Transactions grew by a robust 49.8% (Y-o-Y) to Rs 94.23 crore.

Other Income: Q1, 2008-09Other Income: Q1, 2008-09

(Rs crore) Jun-08 Jun-07Comm., Exchange & Brokerage

155.52 107.66

Profit on Exchange Transactions

94.23 62.90

Incidental Charges 93.65 76.38Recovery in Bad Debt Write-off

54.48 39.48

Profit on Sale of Investments

88.99 130.23

Other Misc. Income 25.67 7.70Total Non-Interest Income

512.55 424.36

Provisions & Contingencies: Q1, 2008-Provisions & Contingencies: Q1, 2008-0909(Rs crore) Jun-08 Jun-07Provision for NPA -41.58 104.68

Bad-debts written off 20.09 7.19

Prov. For Dep. on Investment

218.61 29.05

Prov. For Std. Adv. 16.54 -4.98

Other Provisions 66.65 5.50

Tax Provisions 209.02 172.18

Total Provisions 489.33 313.62

Treasury Highlights: Q1, 2008-09Treasury Highlights: Q1, 2008-09

Category Q1:FY08Rs crore

Q1:FY09Rs crore

SLR 30,507 36,757Non-SLR 4,894 6,549Overseas Investments 3,824 3,333Total Investments 39,225 46,639Excess SLR 871 3,107SLR (HTM) % Total Investments

67.74% 68.33%

SLR (HTM) % DTL 19.38% 18.63%AFS Duration 1.49 yrs 1.90 yrs

Overseas Business: Q1, 2008-09Overseas Business: Q1, 2008-09 At end-June, 2008, the “Overseas Business”

contributed 21.4% to Total Business and 31.8% to Net Profit.

In Q1, FY09, the “Overseas Business” contributed 29.5% to the Bank’s pure Fee-based Income.

While the Cost-Income Ratio for Domestic Operations stood at 49.29% in Q1, FY09, it was just 20.35% for Overseas Operations.

While the Gross NPA (%) in Domestic Operations stood at 2.24% at end-June 2008, that for Overseas Operations was just 0.63%.

As a result, the “Net Profit to Avg. Working Funds” ratio for Overseas Operations was 1.26% in Q1, FY09 as against 0.70% for Domestic Operations.

NPA Movement (Gross): Q1, 2008-09NPA Movement (Gross): Q1, 2008-09

Particular Amount in Rs croreA. Opening Balance 1,981.38B. Additions during the year

359.50

C. Reduction during the year

249.82

Of whichRecovery 122.06Upgradation 122.79Writeoff 4.97Closing Balance 2,091.06

Gross NPAs: Sectoral Break-up at end-Gross NPAs: Sectoral Break-up at end-June, 2008June, 2008

Sector Gross NPA (%)

End-June, 2008

Gross NPA (%)

End-June-2007

Agriculture 3.16 3.81Large & Medium Ind.

1.24 3.28

SSIs 3.49 5.43Retail 3.52 2.46SME 3.31 N.A.Domestic Ops. 2.24 3.28Overseas Ops. 0.63 0.72

Sectoral Deployment of Credit at end-Sectoral Deployment of Credit at end-June, 2008June, 2008Sector % share in

Gross Dom. Credit

Q1, FY09

% share in Gross Dom.

CreditQ1, FY08

Agriculture 15.93% 16.40%

Large Industries 23.40% 22.30%

SSIs 8.02% 9.24%

Retail 19.62% 22.27%

SME 14.03% 15.83%

Road AheadRoad Ahead•Challenging Economic Environment in FY09

• with industrial growth slipping to 5.0% in Apr-May’08 as against 10.9% in Apr-May’09, inflation close to 12.0%, slowing corporate profitability & lack-lustre performance of monsoon in July’08

•A Restrictive Monetary Policy Environment to continue

•RBI raised the CRR by a cumulative 125 bps in Apr-July’08 & Repo Rate by 75 bps in June’08•Further tightening is expected as M3 growth is still at 20.5% (Y-o-Y)

•Weaker Rupee (depreciated by 8.0% in Calendar 2008 till July 28) as crude oil prices still ruling at $125 per barrel•Banks’ NIM as well as other income streams under pressure due to sustained tightening and volatile markets.

Proposed Business Strategies for Proposed Business Strategies for FY09FY09

•Primary thrust on protecting the NIM by •Improving the CASA share•Improving the effective rates of lending•Improving the share of Retail/SME business in total business without compromising the asset quality.

•Leveraging technology/re-branding exercise to extract maximum benefits, recruitment of specialised marketing staff •Special focus on improving “relations” with the existing corporate customers as well as efforts to add new quality customers to the Bank’s Book•Thrust on business process reengineering to reduce the “transaction costs”• A dedicated effort to add 2.5 to 3.0 million quality customers to Bank’s book in FY09 and in subsequent years.

Thank you.