Transcript BOB Profile-Sept05

Bank of Baroda -- Riding High on
Sustainable Performance
( Apr-Mar & Q4, 2009-10)
Dr Rupa Rege Nitsure
Chief Economist
April 28, 2010
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 78 Offices
Pioneer in many
Customer-Centric
Initiatives
Strong Domestic
Presence through
3, 100 branches
Provides Financial
Services to over
36 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 Progressive States like
Maharashtra & Gujarat
All Domestic Operations
Covered under
the CBS
Domestic Branch Network
No. of Domestic Branches
3100
3100
2926
3000
2853
2900
2800
•Bank’s network of domestic
branches as on 31st Mar, 2010 was
3,100 & no. of ATMs were 1,315.
•During FY10, Bank opened 178
new branches & merged four
existing branches.
2732
2700
•Around 36.3% of the Bank’s branch
network is located in rural areas.
2600
2500
FY07
FY08
FY09
FY10
Regional Break-up of
Domestic Branches as on 31st Mar, 2010
Metro
Urban
SemiUrban
Rural
673
580
721
1,126
•New branches are primarily
opened in Semi-Urban, Urban &
Metro areas from U.P., Gujarat,
Maharashtra, Rajasthan, A.P.,
Tamilnadu, Uttaranchal, etc.
•Bank proposes to open around 400
more branches during FY10.
Robust Technology Platform
•Bank achieved 100.0% CBS implementation in its domestic operations in September, 2009.
•As on date, 94.0% of its overseas business is covered under the CBS.
•All CBS branches are enabled for inter bank remittances through RTGS and NEFT.
•Bank’s Retail & Corporate Customers enjoy several facilities like internet banking, phone banking,
rapid funds2india – an online money transfer service, e-tax payment, NEFT/RTGS thru’ e-banking, sms
alerts, cash mgmt services, online institutional trading, etc.
•As on 31st Mar, 2010, Bank had 1,315 ATMs – 841 Onsite ATMs & 474 Offsite ATMs.
• An Integrated Global Treasury Solution is implemented in UK, UAE, Bahamas, Baharain, Hong
Kong & India.
•AML System has been implemented in India & 14 overseas territories.
• Bank has created an Online Centralised-Database of its employees, which enables speedy decisionmaking, 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.
•Enterprise wide GL has been implemented in India & 19 overseas territories, providing integrated GL
on a press of a button.
•All Back-Office functions have now been effectively centralised in Bank of Baroda.
Concentration (%): Domestic Branch Network
Rest of India, 21.42
Gujarat, 22.52
Maharashtra, 11.29
UP & Uttaranchal, 21.96
South, 11
Rajasthan, 11.81
Pattern of Shareholding: 31st Mar, 2010
As on 31st Mar, 2010
Indian
Public
6.0%
Corp.
Bodies
4.9%
• Share
Others
0.1%
FIIs
17.1%
Capital
Rs 365.53 crore
•No. of Shares
364.27 million
• Net worth
Rs 13,785.14 crore
• B. V. per share
Rs 378.40
•Return on Equity (annualised): 22.19%
• BOB is a Part of the following Indexes
Govt. of
India
53.8%
Insurance
Cos
9.1%
Mutual
Funds
9.1%
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: FY10
Value
(31st Mar’09)
Value
(31st Mar’10)
% Change
Sensex
9,708.50
17,527.77
80.5%
Nifty
3,020.95
5,249.10
73.8%
Bankex
4,490.97
10,652.35
137.2%
BankNifty
4,133.20
9,459.60
128.9%
BoB-BSE
234.55
639.25
172.5%
BoB-NSE
234.35
639.05
172.7%
Index/Stock
Indian Macro Scene Quite Mixed in FY10
WPI (%)
IIP Growth (%)
17.6
20
18
16
14
12
10
8
6
4
2
0
12
10.6
15.1
10.2
8.3
1.1
9.89
10
2.1
2
9.9
7.31
8
4
5.55
8.56
1.46
1.31
0.46
1.38
14.1
14.8 15.1
12.6
12.2
9.5
10
Ap
r'0
9
M
ay
'0
9
Ju
n'
09
Ju
l'0
9
Au
g'
09
Se
p'
09
O
ct
'09
No
v'
09
De
c'0
9
Ja
n'
10
Fe
b'
10
M
ar
'1
0
15.9 15.1
Feb'10
Dec'09
-0.17
Oct'09
Aug'09
Jun'09
-0.67
Rs/USD- Exchange Rate
16.7
15.8
-1.01
51 50.08
50
48.82 48.1
49
47.9 47.94
46.95
48
47.07
46.51 46.53 46.17 46.08
47
46
44.9
45
44
43
42
Ap
r'0
9
M
ay
'0
9
Ju
n'
09
Ju
l'0
9
Au
g'
09
Se
p'
09
O
ct
'09
No
v'
09
De
c'0
9
Ja
n'
10
Fe
b'
10
M
ar
'1
0
18
-2
Apr'09
Ja
n'
10
Fe
b'
10
Ju
n'
09
Ju
l'0
9
A
ug
'0
9
Se
p'
09
O
ct
'0
9
N
ov
'0
9
D
ec
'0
9
M
ay
'0
9
0
Bank Credit Growth (%)
20
18
16
14
12
10
8
6
4
2
0
12
6
9.3
7.2
pr
'0
9
A
16.7
Indian Macro Scene Quite Mixed in FY10
•Indian economy passed through many “pluses” and “minuses” in FY10
•A worst drought in last three decades gave rise to a decline of 8.0% in foodgrains &
5.0% in oilseeds production (y-o-y).
•A strong recovery in Mfg, Mining & Services sectors, however, is likely to give a real
GDP growth of 7.2% in FY10 (Official Estimate).
•Both Govt. and Pvt. Final Consumption Expd. slowed down but investment demand
(gross fixed capital formation) showed a gradual recovery.
•WPI-based inflation, after remaining subdued during H1, FY10, increased at a faster
pace in the second half and reached 9.90% (y-o-y) in Mar’10.
•Both exports & imports returned to positive zones by Nov-Dec, 2009 after contracting
for 12-13 months. But a fall in invisibles’ surplus has led to a higher current account
deficit in FY10.
•Equity markets surged on higher FII inflows at US$ 29 bln. Even FDI during Apr-Feb,
FY10 amounted to US$ 33.1 bln.
•In nominal terms, Rupee appreciated by 11.5% in FY10.
•Record market borrowing programme and rising inflation gave rise to hardening of
bond yields. Yield on 10-year GoI benchmark paper increased from 6.94% at the
beginning of FY10 to 7.17% by mid-FY10 to 7.85% by end of FY10. It hovered above
8.0% for several days during the month of March, 2010.
Bank’s Business Growth (Y-O-Y): FY06 to FY10
Growth: Total Advances (%)
Growth: Total Deposits (%)
33.4
40.0
35.0
26.6
30.0
25.0
20.0
25.3
21.7
34.3
35.0
27.6
22.2
25.0
20.0
15.0
15.0
10.0
10.0
5.0
5.0
0.0
0.0
FY07
FY08
FY09
FY06
FY10
FY07
FY08
FY09
FY10
Domestic CASA Growth (%)
Growth: Total Business (%)
35.8
40.0
29.7
35.0
30.0
39.6
30.0
15.2
FY06
38.0
24.0
24.1
23.1
25.1
30.0
25.0
25.0
16.1
20.0
20.0
20.0
20.6
14.1
15.0
15.0
10.0
10.0
5.0
5.0
0.0
0.0
FY06
FY07
FY08
FY09
FY10
FY06
FY07
FY08
FY09
FY10
Bank’s Profitability: FY06 to FY10
•Bank’s Net Profit has grown at a strong
CAGR of 38.7% between FY06 & FY10
6000.00
Rs crore
4935.26
5000.00
4209.99
4000.00
3058.33
2928.55
3000.00
2415.01
2000.00
1000.00
2227.20
1917.51
1435.52
826.97
1026.47
0.00
FY06
FY07
Gross Profit
FY08
FY09
FY10
Net Profit
%
%
Bank’s Asset Quality: FY04 to FY10
9
4
8
7.3
7
6
3.5
Gross NPA
3
2.99
2.5
5
3.9
2
4
3
2
2.47
1.45
1.5
1.84
Net NPA
0.87
1.27
0.6
1
0.47
0.31
1.36
0.34
0
1
0.5
0
FY04
FY05
FY06
FY07
FY08
FY09
FY10
Bank’s Business Performance: FY10 over FY09
Particular
(Rs crore)
FY09
FY10
% Change
Global Business
3,35,648
4,16,080
24.0%
Domestic Business
2,59,958
3,16,926
21.9%
Overseas Business
75,691
99,153
31.0%
Global Deposits
1,92,397
2,41,044
25.2%
Domestic Deposits
1,51,409
1,85,283
22.4%
Overseas Deposits
40,988
55,762
36.0%
Global CASA Deposits
56,939
71,468
25.5%
Domestic CASA
52,789
66,024
25.1%
Overseas CASA
4,149
5,444
31.2%
•Share of Domestic CASA improved from 34.87% at end-Mar’09 to 35.63% at end-Mar’10.
Bank’s Business Performance: FY10 over FY09
Particular
(Rs crore)
FY09
FY10
% Change
Global Advances (Net)
1,43,251
1,75,035
22.2%
Domestic Advances (Net)
1,08,549
1,31,644
21.3%
Overseas Advances (Net)
34,703
43,392
25.0%
19,628
24,248
23.5%
8,263
10,313
24.8%
SME Credit
14,662
21,111
43.98%
Farm Credit
16,964
21,617
27.4%
Credit to Weaker Sections
8,156
10,945
34.2%
Out of Gross Domestic Credit,
Retail Credit
Of which:
Home Loans
•Excluding loans to Retail Trade (that is included under the SME sector as per the new RBI
guidelines) the growth in SME advances works out to 28.2% (y-o-y) in FY10.
Bank’s Business Performance: FY10 over FY09
Particular
(Rs crore)
Global Saving Deposits
Domestic Savings Deposits
Overseas Savings Deposits
Global Current Deposits
Domestic Current Deposits
Overseas Current Deposits
FY09
FY10
% Change
42,487
52,544
23.7%
41,327
51,258
24.0%
1,160
1,286
10.9%
14,451
18,924
31.0%
11,462
14,766
28.8%
2,989
4,158
39.1%
Bank’s Profits & NII: Yearly & Quarterly for FY09 & FY10
Particular
(Rs crore)
FY09
FY10
% Change
Gross Profit
4,209.99
4,853.81
15.3%
Net Profit
2,227.20
3,058.33
37.3%
5,123.41
5,939.48
15.9%
Particular
(Rs crore)
Jan-Mar,
FY09
Jan-Mar,
FY10
% Change
Gross Profit
1,304.48
1,547.33
18.6%
752.69
906.28
20.4%
1,470.79
1,744.95
18.6%
Net Interest Income
Net Profit
Net Interest Income
• Net Profit for FY09 includes an exceptional item of Rs 95.01 crore due to winding up/dilution
of Bank’s holdings in its subsidiaries & Net Profit of FY10 includes an exceptional item of Rs
81.45 crore due to sale of stake in UTI AMC & UTI Trustee companies.
Key Financial Ratios : FY10

Return on Average Assets at 1.21% [1.09% in FY09]

Earning per Share (annualised) at Rs 83.96 [Rs 61.14 in FY09]

Book Value per Share at Rs 378.40 [Rs 312.61 in FY09]

Return on Equity (ROE) at 22.19% [19.56% in FY09]

Capital Adequacy Ratio at 14.36% with Tier I Capital at 9.20%
• Cost-Income Ratio declined from 45.38% to 43.57%(Y-o-Y).

Gross NPA ratio increased marginally from 1.27% to 1.36% (Y-o-Y).

Net NPA ratio increased marginally from 0.31% to 0.34%(Y-o-Y).

NPA Coverage at the healthy level of 74.90% & Incremental Delinquency Ratio at
1.13% in FY10.
Other Highlights: FY09 & FY10
Particular (in %)
FY09
FY10
Global Cost of Deposits
5.71
4.90
Domestic Cost of Deposits
6.30
5.60
Overseas Cost of Deposits
3.29
2.37
Global Yield on Advances
9.50
8.55
Domestic Yield on Advances
10.86
10.05
Overseas Yield on Advances
5.19
4.21
Other Highlights: FY09 & FY10
Particular (in %)
FY09
FY10
Global Yield on Investment
7.05
6.75
Domestic Yield on Investment
7.18
6.97
Overseas Yield on Investment
5.68
3.89
Global NIM
2.91
2.74
Domestic NIM
3.21
3.12
Overseas NIM
1.73
1.42
•NIM indicates Net Interest Income as % of Interest Earning Assets.
Other Highlights: Jan-Mar, FY09 & FY10
Particular (in %)
Jan-Mar’09
Jan-Mar’10
Global Cost of Deposits
5.68
4.42
Domestic Cost of Deposits
6.47
5.08
Overseas Cost of Deposits
2.75
2.06
Global Yield on Advances
9.34
8.23
Domestic Yield on Advances
10.75
9.76
Overseas Yield on Advances
5.13
3.74
Other Highlights: Jan-Mar, FY09 & FY10
Particular (in %)
Jan-Mar’09
Jan-Mar’10
Global Yield on Investment
7.12
6.51
Domestic Yield on Investment
7.30
6.72
Overseas Yield on Investment
5.09
3.68
Global NIM
3.17
2.97
Domestic NIM
3.38
3.50
Overseas NIM
2.07
1.30
•Sequentially, the NIM has improved from 2.37% in Q1, FY10 to
2.63% in Q2, FY10 to 2.95% in Q3, FY10 & 2.97% in Q4, FY10 in global
operations & from 2.57% to 2.89% to 3.40% to 3.50%in domestic
operations.
Non-Interest Income: FY09 & FY10
(Rs crore)
FY09
FY10
%
Change
Comm., Exchange, Brokerage
745.50
897.29
20.4%
Incidental Charges
362.92
308.57
-15.0%
Profit on Exchange
Transactions
372.39
385.97
3.6%
Recovery from PWO
263.15
300.17
14.1%
Trading Gains
805.13
641.78
-20.3%
Other Misc. Income
113.56
191.13
68.3%
2,662.64
2,724.91
2.34%
Total Non-Interest Income
Non-Interest Income: Jan-Mar, FY09 & FY10
(Rs crore)
Jan-Mar,
2009
Jan-Mar,
2010
%
Change
Comm., Exchange, Brokerage
253.88
273.34
7.7%
Incidental Charges
86.38
84.16
-2.6%
Profit on Exchange
Transactions
106.73
106.70
0.0%
Recovery from PWO
82.62
118.13
43.0%
Trading Gains
300.85
125.36
-58.3%
Other Misc. Income
23.17
59.19
155.5%
Total Non-Interest Income
853.63
766.89
-10.2%
Provisions & Contingencies: FY09 & FY10
(Rs crore)
FY09
FY10
Provision for NPA / Bad
Debts Written-off
337.58
955.46
Prov. For Dep. on
Investment
536.75
-380.74
Prov. For Std. Adv.
75.47
106.63
Other Provisions (including
Prov. For staff welfare)
12.26
15.85
Tax Provisions
1,115.74
1,179.73
Total Provisions
2,077.80
1,876.93
Provisions & Contingencies: Jan-Mar, FY09 & FY10
(Rs crore)
JanMar’09
JanMar’10
Provision for NPA/ Bad
debts written-off
236.27
231.83
Prov. For Dep. on
Investment
-33.67
61.69
Prov. For Std. Adv.
15.81
79.21
Other Provisions
(including Prov. For staff
welfare)
-8.67
4.60
Tax Provisions
342.05
345.17
Total Provisions
551.79
722.50
Bank’s Treasury Highlights: FY10
• Treasury Income stood at the healthy level of Rs 1,109.20 crore in FY10
despite volatile bond and currency markets.
• As of Mar 31st 2010, the share of SLR Securities in Total Investment was
86.78%.
• The Bank had 80.13% of SLR Securities in HTM and 19.56% in AFS at
end-Mar 2010.
• The per cent of SLR to NDTL as on 31st Mar., 2010 was 26.91%.
• While the modified duration of AFS investments is 2.18 years; that of
HTM securities is 4.70 years.
• Total size of Bank’s Domestic Investment Book as on 31st Mar 2010
stood at Rs 57,912 crore.
• Total size of Bank’s Overseas Investment Book as on 31st Mar 2010
stood at Rs 3,487 crore.
Overseas Business: FY10
• In FY10, the “Overseas Business” contributed 23.8% to the Bank’s Total
Business, 19.6% to its Gross Profit and 36.0% to its Fee-based income.
• While the Cost-Income Ratio for Domestic Operations stood at 47.11% in
FY10, it was just 22.15% for Overseas Operations.
• While the Gross NPA (%) in Domestic Operations stood at 1.64% at endMar, 2010, that for Overseas Operations was just 0.47%.
• “Gross Profit to Avg. Working Funds” ratio for Overseas Operations was
1.57% in FY10 comparable to 2.11% for Domestic Operations.
• The ROAA of overseas operations was at 1.42% and the ROE at 24.0% in
FY10.
• During FY10, the Bank raised FE resources in the form of syndicated loan
of USD 175 mln for 3 yrs; bilateral loan of USD 100 mln for 3 yrs and MTN
funds of USD 350 mln for 5.5 yrs for deployment in its overseas business.
Capital Adequacy & Capital Raising: FY10
• Bank’s CRAR as on 31st Mar, 2009 stood at 14.36%; of which
Tier1 was at 9.20% and Tier 2 at 5.16%.
• The size of Bank’s risk-weighted assets as on 31st Mar, 2010 was
Rs 1,56,091 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 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): FY10
Particular
Amount in Rs crore
A. Opening Balance
1,842.92
B. Additions during FY10
1,671.22
Out of which, Fresh Slippages
1,615.64
C. Reduction during FY10
1,113.45
Recovery
383.27
Upgradation
194.63
PWO & WO
514.81
Exchange Difference
20.74
NPA as on 31st Mar, 2010
2,400.69
Recovery in PWO in FY10
300.17
Gross NPAs: Sectoral Break-up at end-Mar, 2010
Sector
Gross NPA (%)
FY09
Gross NPA (%)
FY10
Agriculture
1.68%
3.33%
Large & Medium Ind.
0.74%
1.43%
Retail
2.48%
2.11%
Housing
3.01%
2.31%
SME
2.58%
2.60%
Restructured Loans : FY10
• During 24 months (1 Apr’08 to 31 Mar’10), Bank has restructured
61,174 accounts amounting Rs 5,113.62 crore.
• Within this, the loans worth Rs 463.26 were restructured in Q4,
FY10.
• For the period of 24 months, out of the total amount restructured
Rs 2,682.11 cr belonged to wholesale banking, Rs 1,272.69 cr to
SMEs, Rs 557.58 cr to retail and Rs 601.24 cr to agriculture sector.
• About 79 accounts above Rs 25 lakh restructured during the last
24 months slipped during FY10 and they were Rs 417.88 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 FY10
Sector
% share in Gross
Domestic Credit
Agriculture
16.18%
Retail
18.15%
SME
15.80%
Trading plus Others
15.14%
Wholesale
34.73%
Total
100.0%
Emerging Economic Scenario
• Global economic recovery, currently underway, faces risks because of large
public debt in advanced countries.
• Advanced countries still suffer from loss of capacity output, high
unemployment rates, impaired financial systems, etc.
• However, Asia is much better placed as domestic demand in Asian
countries is replacing exports as the main growth driver, led by China &
India.
• While India is likely to post the growth around 7.2% 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 until the next normal
monsoon season.
• With both growth & inflation heading towards 8.0%, the pace of monetary
tightening is going to increase putting upward pressure on interest rates.
• Indian currency is headed for appreciation despite faster widening of
current account deficit.
• Key risks: high food & oil prices, a double-dip, etc.
• Positives: strong net capital inflows (both FIIs & FDI) & good signs of
investment rebound.
Bank’s Guidance & Vision
•The Bank would continue with its thrust on sustainable & qualitative growth --
•Will 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.
•Aggressively launching a series of marketing campaigns to promote its Brand
value, such as the recently launched Baroda Next Reinforcement Campaign –
II.
Thank you.