Transcript BOB Profile

Presentation to Analysts
Performance Highlights
( H1 & Q2, 2009-10)
by
Dr Rupa Rege Nitsure
Chief Economist
October 28, 2009
Bank 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.
Uninterrupted Record
in Profit-making and
Dividend Payment
Overseas Business
Operations extend across
25 countries
through 76 Offices
Pioneer in many
Customer-Centric
Initiatives
Strong Domestic
Presence through
3,029 branches
Provides Financial
Services to over
million customers
globally
First PSB to receive
Corporate Governance
Rating (CAGR-2)
A well-accepted &
recognised Brand in
Indian banking industry
Modern & Contemporary
Personality
Relatively Strong Presence
in Industrially
Progressive States
of India
All Domestic Operations
Covered under
the CBS
Domestic Branch Network
No. of Domestic Branches
3029
3050
3000
2886
2950
•During H1, FY10, Bank opened 107
new branches & merged four
existing branches.
2900
2850
•Bank’s network of domestic
branches as on 30th Sept. 2009 was
3,029.
2775
2800
•Almost 37.0% of the total branch
network is located in rural areas.
2750
2700
2650
2600
Sept'07
Sept'08
Sept'09
Regional Break-up of
Domestic Branches as on 30 Sept, 2009
Metro
Urban
SemiUrban
Rural
656
567
691
1,115
•New branches are primarily
opened in Metro, Urban & SemiUrban areas from Southern States,
Gujarat, UP & Uttaranchal and
Northern States like Delhi &
Chandigarh.
•Bank still has 74 pending
applications with the RBI for
opening of new branches during
FY10.
Robust Technology Platform
•Bank achieved 100.0% CBS implementation in its domestic operations on 19th Sept’09.
•Additionally, 43 br. in 12 overseas territories & 25 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, etc.
• Bank has implemented Global Treasury Solution in UK, UAE, Baharain & Hong Kong.
•Bank has made operational Corporate Cash Mgmt Services in Mumbai.
•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 11 overseas territories & all B
category branches in India.
•A module for School Fee Collection has also been implemented.
Concentration (%): Domestic Branch Network
Rest of India, 18.52
Gujarat, 23.91
Maharashtra, 11.88
UP & Uttaranchal,
22.12
South, 11.34
Rajasthan, 12.23
Pattern of Shareholding: 30th Sept, 2009
As on 30th Sept, 2009
Indian
Public
5.9%
Others
0.1%
Corp.
Bodies
4.0%
• Share
FIIs
16.9%
Capital
Rs 365.53 crore
•No. of Shares
364.27 million
• Net worth
Rs 12,703.10 crore
• B. V. per share
Rs 348.70
•Return on Equity (annualised): 20.78%
Insurance
Cos
8.1%
Banks
0.1%
Govt. of
India
53.8%
Mutual
Funds
11.1%
• 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.
Comparative Performance of BoB Stock: Jun-Sept’09
Particular
31-Mar’09
30-Sept’09
% Return
Sensex
9,708.50
17,126.84
76.41%
Nifty
3,020.95
5,083.95
68.29%
Bankex
4,490.97
9,855.80
119.46%
234.55
482.40
105.67%
BoB
Annualised Business Growth: Sept’05 to Sept’09
Growth: Total Advances (%)
Growth: Total Deposits (%)
45.0
28.7
30.0
25.0
25.0
22.0
40.0
22.6
35.0
27.1
25.4
25.0
20.0
9.6
15.0
10.0
10.0
5.0
5.0
0.0
0.0
Sept'05
Sept'06
Sept'07
Sept'08
Sept'05
Sept'09
Sept'06
Sept'07
Sept'08
32.2
35.0
26.3
30.0
Sept'09
Domestic CASA Growth (%)
Growth: Total Business (%)
27.3
24.0
25.0
20.0
31.6
30.9
30.0
20.0
15.0
45.0
23.1
25.0
19.4
19.2
20.5
20.0
16.5
15.0
15.0
10.0
10.0
7.3
5.0
5.0
0.0
0.0
Sept'05
Sept'06
Sept'07
Sept'08
Sept'09
Sept'05 Sept'06 Sept'07 Sept'08 Sept'09
Half-yearly Profits: Sept’05 to Sept’09
2500.00
2000.00
Rs crore
•Net Profit has grown at a CAGR of 33.5%
between Sept’05 & Sept’09
2041.53
1585.81
1500.00
1319.56
1281.70
1066.67
1002.15
1000.00
766.14
658.03
500.00
416.01
451.68
0.00
Sept'05
Sept'06
Gross Profit
Sept'07
Sept'08
Sept'09
Net Profit
11
4
9.41
%
%
Asset Quality: Sept’04 to Sept’09
3.5
9
3
6.34
7
2.5
5
2.27
2
3.44
2.33
3
1.5
1.62
1.13
1
1.3
0.77
1
0.43
0.55
Sept'04
-1
Sept'05
Sept'06
Gross
NPA
Sept'07
Sept'08
0.5
0.27
Sept'09
0
Net
NPA
Business Performance: Sept’09 over Sept’08
Particular
(Rs crore)
Sept’08
Sept’09
% Change
Global Business
2,79,820
3,56,274
27.3
Domestic Business
2,21,612
2,70,249
22.0
Overseas Business
58,208
86,025
47.8
Global Deposits
1,61,069
2,07,355
28.7
Domestic Deposits
1,31,019
1,60,608
22.6
Overseas Deposits
30,050
46,746
55.6
Global CASA Deposits
50,938
62,705
23.1
Current
12,165
15,717
29.2
Savings
38,773
46,988
21.2
•Share of Domestic CASA improved to 36.17% by end-Sept’09.
Business Performance: Sept’09 over Sept’08
Particular
(Rs crore)
Sept’08
Sept’09
% Change
Global Advances (Net)
1,18,751
1,48,919
25.4
Domestic Advances (Net)
90,593
1,09,641
21.0
Overseas Advances (Net)
28,157
39,278
39.5
17,745
21,403
20.6
7,588
9,353
23.3
SME Credit
12,684
16,666
31.4
Farm Credit
14,625
18,575
27.0
Credit to Weaker
Sections
6,475
9,194
42.0
Out of Gross Domestic Credit,
Retail Credit
Of which:
Home Loans
Key Financial Ratios : Apr-Sept, 2009-10

Return on Average Assets at 1.13% [0.83% at end-Sept, 2008]

Earning per Share (annualised) at Rs 72.46 [Rs 42.06 at end-Sept, 2008]

Book Value per Share at Rs 348.70 [Rs 282.88 at end-Sept, 2008]

Return on Equity (ROE) at 20.78% [14.87% at end-Sept, 2008]

Capital Adequacy Ratio at 14.67% with Tier I Capital at 8.86%
• Cost-Income Ratio declined from 50.12% to 47.54%(Y-o-Y).

Gross NPA ratio declined from 1.62% to 1.30% (Y-o-Y).

Net NPA ratio declined from 0.43% to 0.27%(Y-o-Y).

NPA Coverage improved to 79.29% [73.94% last yr] on prudent provisioning.
Operating Profits: Sept’09 over Sept’08
Rs Crore
2500.00
2041.53
1585.81
2000.00
1500.00
28.7%
1000.00
500.00
0.00
Sept'08
Sept'09
•NII grew by 18.40% (Y-o-Y) in H1, FY10 and by 22.5% (y-o-y) in Q2, FY10.
Net Profits: Sept’09 over Sept’08
1319.56
Rs Crore
1400.00
1200.00
766.14
1000.00
800.00
72.2%
600.00
400.00
200.00
0.00
Sept'08
Sept'09
•The Operating profit grew by 31.3% to Rs 1,031.59 crore and Net Profit
by 60.4% to Rs 634.18 crore in Q2, FY10.
Other Highlights: Apr-Sept, FY09 & FY10
Particular (In %)
Apr-Sept’08
Apr-Sept’09
Global Cost of Deposits
5.59
5.29
Domestic Cost of Deposits
6.12
6.01
Overseas Cost of Deposits
3.38
2.61
Global Yield on Advances
9.37
8.72
Domestic Yield on Advances
10.73
10.16
Overseas Yield on Advances
5.00
4.61
Other Highlights: Apr-Sept, FY09 & FY10
Particular (In %)
Apr-Sept’08 Apr-Sept’09
Global Yield on Investment
6.78
6.73
Domestic Yield on Investment
6.91
6.94
Overseas Yield on Investment
5.42
4.06
Global NIM
2.77
2.49
Domestic NIM
2.92
2.74
Overseas NIM
1.90
1.51
•NIM indicates Net Interest Income as % of Avg. Interest Earning Assets.
Other Highlights: July-Sept, FY09 & FY10
Particular (In %)
July-Sept’08 July-Sept’09
Global Cost of Deposits
5.65
5.15
Domestic Cost of Deposits
6.20
5.87
Overseas Cost of Deposits
3.34
2.49
Global Yield on Advances
9.67
8.71
Domestic Yield on Advances
11.13
10.23
Overseas Yield on Advances
5.08
4.48
Other Highlights: July-Sept, FY09 & FY10
Particular (In %)
July-Sept’08 July-Sept’09
Global Yield on Investment
6.33
6.69
Domestic Yield on Investment
6.39
6.87
Overseas Yield on Investment
5.65
4.33
Global NIM
2.80
2.63
Domestic NIM
2.92
2.89
Overseas NIM
2.06
1.59
•Sequentially, the NIM has improved from 2.37% in Q1, FY10 to
2.63% in Q2, FY10 in global operations & from 2.57% to 2.89% in
domestic operations.
Non-Interest Income: Apr-Sept, FY09 & FY10
(Rs crore)
Apr-Sept,
2008
Apr-Sept
2009
%
Change
Comm., Exchange,
Brokerage & Incidental
Charges
557.55
624.15
11.9
Profit on Exchange
Transactions
149.31
180.55
20.9
Recovery from PWO
98.17
116.55
18.7
Trading Gains
183.43
377.12
105.6
Total Non-Interest Income
988.46
1298.37
31.4
Non-Interest Income: Jul-Sept, FY09 & FY10
(Rs crore)
Jul-Sept,
2008
Jul-Sept,
2009
%
Change
Comm., Exchange,
Brokerage & Incidental
Charges
284.88
323.95
13.7
Profit on Exchange
Transactions
55.08
84.23
52.9
Recovery from PWO
43.69
66.61
52.5
Trading Gains
92.27
120.54
30.6
Total Non-Interest Income
475.92
595.33
25.1
Provisions & Contingencies: Apr-Sept, FY09 & FY10
(Rs crore)
AprSept’08
AprSept’09
1.21
480.68
Prov. For Dep. on
Investment
337.55
-420.87
Prov. For Std. Adv.
55.86
10.07
Other Provisions
(including Prov. For staff
welfare)
127.60
7.50
Tax Provisions
417.45
644.59
Total Provisions
939.67
721.97
Provision for NPA / Bad
Debts Written-off
Provisions & Contingencies: Jul-Sept, FY09 & FY10
(Rs crore)
JulSept’08
JulSept09
Provision for NPA/ Bad
debts written-off
22.70
172.16
Prov. For Dep. on
Investment
118.94
-61.07
Prov. For Std. Adv.
39.32
1.49
Other Provisions
(including Prov. For staff
welfare)
0.95
3.75
Tax Provisions
208.43
281.08
Total Provisions
390.34
397.41
Treasury Highlights: Apr-Sept, 2009-10
• Treasury Income increased by 67.6% from Rs 332.74 crore in H1,
FY09 to Rs 557.67 crore in H1, FY10.
• As of Sept 30, 2009, the share of SLR Securities in Total Investment
was 85.83%.
• The Bank had 77.79% of SLR Securities in HTM and 19.90% in AFS
at end-Sept 2009.
• While the modified duration of AFS investments is 2.13 years; that
of HTM securities is 4.08 years.
• Total size of Bank’s Domestic Investment Book as on 30th Sept 2009
stood at Rs 54,068 crore.
• Total size of Bank’s Overseas Investment Book as on 30th Sept 2009
stood at Rs 3,880 crore.
Overseas Business: Apr-Sept, 2009-10
 In H1, FY10, the “Overseas Business” contributed 24.2% to the
Bank’s Total Business, 23.1% to its Gross Profit and 36.6% to its
Fee-based income.
 While the Cost-Income Ratio for Domestic Operations stood at
52.28% in H1, FY10, it was just 21.62% for Overseas Operations.
 While the Gross NPA (%) in Domestic Operations stood at 1.58%
at end-Sept, 2009, that for Overseas Operations was just 0.50%.
 “Gross Profit to Avg. Working Funds” ratio for Overseas
Operations was 1.63% in Q1, FY10 comparable to 1.78% for
Domestic Operations.
 On the Overseas Investment Book of Rs 3,880 crore, the Bank
held Provisions worth Rs 217.29 crore during H1, FY10.
Sectoral Break-up of Industrial Credit: H1, FY10
Outstanding
As on 30th Sep. 2009
(Rs crore)
Metals, Iron & Steel
Infrastructure
Chemical & Fertilizer Incl. Drugs & Pharma
Textile (Cotton, Jute & Others)
Trading
Engineering
Food & Beverages
Crude & Petro
Construction
Gems & Jewellery
NBFCs
Others
TOTAL
6,789.60
13,197.43
3,751.01
5,877.79
5,046.20
2,994.51
1,129.10
1,270.07
1,879.49
551.81
3,683.42
65,197.91
1,11,368.34
(%)
6.10
11.85
3.37
5.28
4.53
2.69
1.01
1.14
1.69
0.50
3.31
58.54
100.00
NPA Movement (Gross): H1, 2009-10
Particular
A. Opening Balance
Amount in Rs crore
1,842.93
B. Additions during Q1, FY10
764.17
C. Reduction during Q1, FY10
643.74
Of which,
Recovery
184.48
Upgradation
195.83
PWO & WO
263.43
Exchange Difference
NPA as on 30th Sept, 2009
Recovery in PWO in Q1, FY10
6.77
1,956.59
116.55
Gross NPAs: Sectoral Break-up at end-Sept, 2009
Sector
Gross NPA (%)
Apr-Sept’08
Gross NPA (%)
Apr-Sept’09
Agriculture
2.40
2.90
Large & Medium Ind.
1.08
1.21
Retail
3.22
2.38
Housing
4.06
2.67
SME
2.82
1.69
Sectoral Deployment of Credit in H1, FY10
Sector
% share in Gross
Domestic Credit
Agriculture
16.7
Retail
19.2
SME
15.0
Wholesale
49.1
Total
100.0%
Economic Scenario
•While Indian economy is slowly reverting to the growth track, there are strains
in the form of continuing contraction in exports & the worst drought since 1972.
•Positive factors: Marked improvement in industrial production in recent
months, upturn in primary capital market activity, revival in debt/equity capital
inflows and easy liquidity conditions.
•Concerns: Origination of inflation from supply shocks, sluggishness in bank
credit growth & private consumption demand, a decline of min. 2% expected in
agricultural production & the services sector growth still below trend.
•The RBI has kept the GDP projection for FY10 at 6.0% with an upward bias in
the Mid-Term Policy Review unveiled on Oct 27, 2009.
•It has also raised its projection for inflation at end-Mar 2010 to 6.5% with an
upward bias.
•Continuous upward pressure on rupee/USD due to strong capital inflows &
weakening of the USD overseas – a major challenge for the RBI going forward.
•The RBI has lowered the target growth in M3 to 17% from 18% earlier;
Aggregate deposit growth for the banking system is kept at 18% but adjusted
non-food credit growth is revised downwards to 18% from 20% earlier.
Bank’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.