Bank of Baroda Bank of Baroda - SWOT Analysis examines the company's key business structure and operations, history

and products, and provides summary analysis of its key revenue lines and strategy. Bank of Baroda (BOB) is a financial services company that provides banking services. It offers personal banking, business banking, corporate banking, merchant banking and treasury banking services. The bank primarily operates in the US, the UK and Asia Pacific regions. It is headquartered in Baroda, India and employs about 38,960 people. The company recorded revenues of INR87,458.4 million (approximately $1,943.3 million) in the financial year ended March 2010 (FY2010), an increase of 11% over FY2009. Operating profit was INR49,352.6 million (approximately $1,096.6 million) in FY2010, an increase of 14.6% over FY2009. Its net profit was INR30,583.3 million (approximately $679.6 million) in FY2010, an increase of 37.3% over FY2009.

http://www.aarkstore.com/reports/Bank-of-Baroda-SWOT-Analysis-77286.html Bank of Baroda (BoB) was incorporated in 1908 as a privatelyowned institution headquartered in Baroda (now Vadodara), Gujarat. The bank expanded its operations through mergers and acquisitions before it was nationalised in 1969. The Government of India has a shareholding of 53.81% in BoB. BoB is among the five largest banks in India, with total assets of Rs 2.8 trillion (tn) as on March 31, 2010. The banks domestic network consists of 3,100 branches as on the same date. It has the secondlargest international presence among Indian banks with 78 overseas offices across 25 countries accounting for ~24% of its total business. Established franchise and strong market position in Indian banking sector BoB is among Indias five largest banks by asset size. It has a share of over 4.5% in the total deposits and advances of Indias scheduled commercial banks. It has a wide reach with 60% of its 3,100

branches in semiurban and rural areas. BoB has the second largest international presence among Indian banks in terms of geographical coverage, with ~25% of its advances and ~23% of its deposits as on March 31, 2010, coming from foreign operations. Adequate capitalisation with healthy resource profile As on March 31, 2010, BoB had a TierI capital base of Rs 143.6 bn and a TierI capital adequacy ratio (CAR) of 9.2%. The bank's capitlisation level is supported by adequate internal accruals. The bank has a stated policy of maintaining a minimum CAR of 12%. Its overall CAR was at 14.4% as on March 31, 2010, up from 14.1% on March 31, 2009. BoB has a stable, regionally diversified resource profile. As on March 31, 2010, the share of the lowcost current accounts and saving accounts (CASA) in the banks total deposits and domestic deposits was 29.6% and 35.6%, respectively. BoBs resource profile is supported by the banks large presence in semiurban and rural areas; about onefourth of its domestic deposits come from these regions. Launched new business initiatives in FY10 In 2009, BoB launched a business process reengineering and organisational restructuring project named Navnirmaan Baroda Next. The project envisages redesigning and streamlining existing processes and structures to improve service and sales, revenue growth and efficiency. The bank has also launched a new subsidylinked housing loan scheme styled as Interest subsidy scheme for housing the urban poor. l Slow down in economy could reduce offtake of credit l Default in payments from customers l Intense competition from public and private sector banks KEY HIGHLIGHTS KEY RISKS Stock Performances vis vis market Returns YTD 1m 3m 12m BANKBARODA 33 9 1 22 NIFTY 5 6 1 7 Note: 1) YTD returns are since Apr 1, 2010 to May 3, 2011. 2) 1m,

3m and 12m returns are up to May 3, 2011 Key Financial Indicators MAR08 MAR09 MAR10 Net Interest Income (Rs Mn) 41,014 53,802 62,115 Non Interest Income (Rs Mn) 21,823 29,090 30,079 PAT (Rs Mn) 14,580 23,949 31,924 Net Interest Margin (NIM) (%) 2.5 2.6 2.4 Capital adequacy ratio (%) 12.9 14.1 14.4 Net NPA ratio (%) 1.0 0.7 0.3 EPS (Rs) 39.89 65.52 87.34 Book value 306.70 360.77 431.54 Div. Yield (%) 3.3 4.5 2.8 P/E (x) 7.1 3.6 7.3 P/BV (x) 0.9 0.7 1.5 ROE (%) 14.6 19.6 22.0 ROA (%) 0.9 1.2 1.2 n.m. : Not meaningful Shareholding (As on March 31, 2011) Indexed price chart CRISIL COMPANY REPORT |1 Bank of Baroda provides banking and financial services to individual, business and corporate customers in India and abroad. Its operations include wholesale banking, which contributed ~36% to FY10 revenues, retail banking (~26%) treasury operations (~23%) and other banking operations (~15%). The company offers fixed, current, and savings deposit accounts to customers, while lending activity covers home loans, home improvement loans, loan against future rent receivables, mortgage loans, advance against securities, education loans, auto loans, two wheeler loans, personal loans, reverse mortgage loans, term finance, small scale industries and SME loans, traders loans, working capital, line of credit, export and import finance, bill finance, bridge loans, advance against shares, short term corporate loans, project finance and infrastructure finance. The bank also offers forex services. Its rural banking services include deposits, priority sector advances, remittance, collection services, pension and lockers. As of FY10, the bank had a network of 3,100 branches across India, with a strong presence in western India (Gujarat and Maharshtra). BoBs international network covers 48 branches, three representatives offices and 27 branches of overseas subsidiaries spread across 25 countries, giving it the second largest international presence among Indian banks. BACKGROUND COMPETITIVE POSITION Peer Comparison Bank of Baroda Mar10

Bank of Maharashtra Mar10 Corporation Bank Mar10 Jammu & Kashmir Bank Ltd. Mar10 Vijaya Bank Mar10 Net Interest Income (Rs Mn) 62,115 12,966 22,114 11,196 14,491 PAT (Rs Mn) 31,924 3,103 6,911 5,126 5,073 Net Interest Margin (NIM) (%) 2.4 2.0 2.2 2.8 2.2 Capital adequacy ratio (%) 14.4 12.8 15.4 15.9 12.5 Net NPA ratio (%) 0.3 1.6 0.3 0.3 1.4 EPS (Rs) 87.30 7.20 48.20 105.70 11.70 Book value 431.50 55.10 406.50 620.80 61.40 P/e (x) 7.3 6.9 10.0 6.4 4.0 P/BV (x) 1.5 0.9 1.2 1.1 0.8 ROE (%) 22.0 14.1 12.8 18.2 20.4 ROA (%) 1.2 0.5 0.7 1.3 0.8 Increase in credit offtake in retail business propels NII and PAT BoBs net interest income grew by ~15.5% to Rs 62.1 bn in FY10 from Rs 53.8 bn in FY09, on the back of a ~21.3% increase in advances. Its priority sector credit grew 24% yearonyear (yoy) and surpassed the mandatory requirement. The bank recorded a growth of 44% in SME credit, 27% in farm credit and 24% in retail credit. Its overseas business advances grew 25% during FY10. Net interest margin (NIM) declined ~20 basis points as a result of reduction in CASA deposits as a percentage of total deposits and decrease in average total assets. The growth in profits was led by healthy growth in top line, management of deposit costs and better operating efficiency. The banks net profit stood at Rs 31.9 bn in FY10, against Rs 23.9 bn in FY09, growth of ~33.3% yoy. As of FY10, the bank had a CAR of ~14.4% under Basel II norms. During the year, the bank strengthened its capitalbase by raising Rs 10 bn through unsecured subordinated bonds and Rs 9 bn through perpetual bonds. Key Financial Indicators Mar08 Mar09 Mar10 Net Interest Income (NII) (Rs Mn) 41,014 53,802 62,115 Pre provisioning profit (PPP)(Rs Mn) 33,718 48,163 54,806 PAT (Rs mn) 14,579 23,949 31,924 NII growth (%) 9.2 31.2 15.5

PAT growth (%) 28.3 64.3 33.3 Net Interest Margin (NIM) (%) 2.5 2.6 2.4 Capital adequacy ratio (%) 12.9 14.1 14.4 Net NPA ratio (%) 1.0 0.7 0.3 ROE (%) 14.6 19.6 22.0 FINANCIAL PROFILE Banking The Indian banking system emerged relatively unscathed from the global economic downturn of 200809. While credit growth slowed down, banks were able to control the level of nonperforming assets (NPAs), thanks partly to the Reserve Bank of Indian allowing onetime restructuring of accounts. NPAs as a proportion of gross advances increased slightly from 2.3 per cent as on March 31, 2009 and 2.5 per cent as the end of March 31, 2010. The government has been supporting the growth of public sector banks by infusing capital as per requirement. The government is expected to continue to maintain its strong support for the banking system, while simultaneously imposing stringent prudential norms to ensure its orderly growth. Aggregate yoy bank credit growth was 22 per cent as of the first week of November 2010, primarily supported by large borrowings for 3G spectrum and broadband wireless access auctions. Despite hike in deposit rates by 50 bps (on an average) in the first half of 201011, the deposit growth rate has been 1415 per cent till 5th November, 2010. This is primarily because of investors preferring to channelise their savings to other avenues on account of negative real interest rates on bank deposits. For inflows to revive, the deposit rates will need to be more attractive. Realising this, several banks increased their deposit rates by a further 25 75 bps in the first week of October 2010. INDUSTRY PROFILE Bank of Baroda CRISIL COMPANY REPORT |2 ANNUAL RESULTS Income statement (Rs million) Mar08 Mar09 Mar10 Net Interest Income (NII) 41,014 53,802 62,115 Non Interest Income 21,823 29,090 30,079 Total Income 62,837 82,892 92,194 Pre provisioning profit (PPP) 33,718 48,163 54,806 Provisions 8,708 10,177 8,093 PBT 22,603 35,592 44,285 TAX 8,023 11,642 12,361 PAT 14,580 23,949 31,924 Balance Sheet (Rs million) Mar08 Mar09 Mar10 Equity Capital 3,655 3,655 3,655 Reserves 108,452 128,215 154,085

Shareholders Funds 112,107 131,870 157,740 Deposits 1,552,951 1,966,084 2,459,511 Borrowings 93,829 127,767 134,043 Other Liabilities & Provisions 74,062 88,205 90,497 Deferred tax liability : |asset| 534 446 934 Sources of funds 1,832,414 2,313,480 2,842,726 Cash & Balances with RBI 96,173 109,012 140,761 Balances with Banks & money at Call 135,528 143,014 224,934 Investments 446,578 536,266 631,633 Advances 1,085,790 1,455,595 1,777,119 Net Fixed Assets 24,905 23,755 23,694 Other Assets 43,441 45,838 44,585 Application of funds 1,832,414 2,313,480 2,842,726 Ratios Mar08 Mar09 Mar10 Loan book growth (%) 26.9 34.1 22.1 Deposit growth (%) 21.2 26.6 25.1 NII growth (%) 9.2 31.2 15.5 PAT growth (%) 28.3 64.3 33.3 Tax rate (%) 35.5 32.7 27.9 Dividend Payout (%) 23.4 16.0 20.3 ROE (%) 14.6 19.6 22.0 ROA (%) 0.9 1.2 1.2 Credit Deposit ratio (%) 69.9 74.0 72.3 NIM (%) 2.5 2.6 2.4 CASA (%) 31.6 30.0 29.8 CAR (%) 12.9 14.1 14.4 Tier I Capital (%) 7.6 8.5 9.2 Provision Coverage Ratio (%) 45.1 43.9 74.5 Net NPA (%) 1.0 0.7 0.3 n.m.: Not meaningful Profit and loss account QUARTERLY RESULTS (Rs million) Dec10 % of Rev Dec09 % of Rev Sep10 % of Rev Dec10 % of Rev Dec09 % of Rev No of Months 3 3 3 9 9 Interest Earned 56,661.5 100.0 41,769.7 100.0 51,586.6 100.0 155,517.7 100.0 123,445.0 100.0 Interest Expended 33,738.9 59.5 25,757.4 61.7 31,205.2 60.5 93,633.8 60.2 81,499.7 66 Net Interest Income 22,922.6 40.5 16,012.3 38.3 20,381.4 39.5 61,883.9 39.8 41,945.3 34 Operating Profit 18,512.0 59.5 12,649.5 61.7 16,567.4 60.5 50,358.1 60.2 33,064.8 66 PBT 15,471.4 27.3 10,224.6 24.5 14,712.5 28.5 42,949.3 27.6 29,866.1 24.2 PAT 10,688.8 18.9 8,324.9 19.9 10,193.0 19.8 29,473.4 19 21,520.5 17.4

Bank of Baroda CRISIL COMPANY REPORT |3 FOCUS CHARTS AND TABLES Shareholding pattern (Per cent) Jun 2010 Sep 2010 Dec 2010 Mar 2011 Promoters 53.8 53.8 53.8 57.0 Fll 17.2 17.9 18.2 16.6 Dll 17.4 16.9 16.6 16.0 Others 11.5 11.4 11.4 10.4