Transcript BOB Profile

Presentation to Analysts
Performance Highlights
( Q1, 2009-10)
by
Dr Rupa Rege Nitsure
Chief Economist
July 27, 2009
Bank of Baroda: Key Strengths

Bank of Baroda is a third largest PSU Bank in India 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 74 branches/ Offices
Strong Domestic
Presence through
2,927 branches
Pioneer in many
Customer-Centric
Initiatives
Provides Financial
Services to over
36.6million 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
Rapid & Significant
Technology Progression
Since FY06
Domestic Branch Network
No. of Domestic Branches
2927
2950
2851
2900
•During Q1, FY10, Bank opened
three new branches & merged two
existing branches.
2850
2800
•The Bank’s network of domestic
branches on 30th June 2009 was
2,927.
2735
2750
•On 20th July, 2009, Bank opened 61
new branches including
upgradation of its six extension
counters to branches.
2700
2650
2600
Jun'07
Jun'08
Jun'09
Regional Break-up of
Domestic Branches as on 30 June, 2009
Metro
Urban
SemiUrban
Rural
637
540
649
1,101
• New branches are mainly
concentrated in Urban & SemiUrban centres from Maharashtra,
Gujarat, Southern States, U.P. &
Uttaranchal.
•Bank still has 115 pending
applications with the RBI for
opening of new branches during
FY10
Robust Technology Platform
•By 30 June, 2009, the Bank completed CBS Rollout in 1,987 domestic
branches & 66 overseas offices, covering 94% of Bank’s business under the
CBS. (Two overseas branches were opened in T & T on 10.07.2009).
•The Bank proposes to bring its Total Business under CBS by end-Sept, 2009.
•Bank’s ATM network increased to 1,183 by end-June 2009 from a mere 170 in
2005.
•Bank has taken the following new IT initiatives in the recent past.
•NEFT /RTGS through e-banking
•Multiple accounts linkage to single debit card
•AML implementation in CBS branches in India
•Trinidad & Tobago ATMs made live through India switch Base 24
•To enhance the Bank’s fee-based income, the Bank has introduced various
products & services like corporate cash Mgmt, facility for e-tax payment for
non-customers & non-Baroda connect customers, shopping mall facility on ebanking, temple donations through ATMs and school fee module for
collection of fees, etc.
Concentration (%): Domestic Branch Network
Rest of India, 20.66
Gujarat, 23.16
Maharashtra, 11.34
UP & Uttaranchal,
22.13
South, 10.68
Rajasthan, 12.03
Pattern of Shareholding: 30th June, 2009
As on 30th June, 2009
Indian
Public
6.0%
FIIs
18.3%
Others
0.1%
Corp.
Bodies
3.6%
• Share
Capital
Rs 365.53 crore
•No. of Shares
364.27 million
• Net worth
Rs 12,066.77 crore
• B. V. per share
Rs 331.26
•Return on Equity (annualised): 22.72%
Insurance
Cos
8.1%
Banks
0.2%
Govt. of
India
53.8%
Mutual
Funds
10.1%
• 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.
Annualised Business Growth: Jun’05 to Jun’09
Growth: Total Advances (%)
Growth: Total Deposits (%)
30.0
20.1
25.0
20.0
15.0
22.7
26.5
28.2
12.9
10.0
5.0
0.0
Jun'05 Jun'06 Jun'07 Jun'08 Jun'09
Growth: Total Business (%)
42.1
37.5
26.2
30.0
28.3
27.5
20.0
Jun'05 Jun'06 Jun'07 Jun'08 Jun'09
Domestic CASA Growth (%)
32.6
35.0
28.2
24.6
25.0
20.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
25.0
25.0
20.3
18.8
20.0
15.3
15.0
15.0
12.4
11.1
10.0
10.0
5.0
5.0
0.0
Jun'05 Jun'06 Jun'07 Jun'08 Jun'09
0.0
Jun'05
Jun'06
Jun'07
Jun'08
Jun'09
Quarterly Profits: June’05 to June’09
1200.00
1000.00
Rs crore
1009.93
•Net Profit has grown at a CAGR of 44.6%
between Jun’05 & Jun’09
800.19
800.00
685.38
644.45
600.00
503.53
455.62
370.86
400.00
200.00
330.83
156.94
163.33
0.00
Jun'05
Jun'06
Gross Profit
Jun'07
Jun'08
Jun'09
Net Profit
11
4
10.41
%
%
Asset Quality: Jun’04 to Jun’09
3.5
9
3
7.21
7
2.94
2.5
4.06
5
Gross
NPA
2
2.78
1.47
3
1.5
1.86
1
0.92
1.44
1
0.67
Jun'04
-1
Jun'05
Jun'06
Jun'07
0.52
Jun'08
0.5
0.27
Jun'09
0
Net
NPA
Business Performance: Jun’09 over Jun’08
Particular
(Rs crore)
Jun’08
Jun’09
% Change
Global Business
2,66,121.82
3,41,281.71
28.2%
Domestic Business
2,09,134.78
2,60,997
24.8%
Overseas Business
56,987.04
80,284.31
40.9%
Global Deposits
1,54,908.23
1,98,609.45
28.2%
Domestic Deposits
1,23,815.73
1,54,434.59
24.7%
Overseas Deposits
31,092.50
44,174.86
42.08%
Global CASA Deposits
49,289.37
58,483.43
18.7%
Current
11,361.85
14,246.36
25.4%
Savings
37,927.52
44,237.07
16.6%
•Share of Domestic CASA is at the healthy level of 35.09% in Q1, 2009-10.
Business Performance: Jun’09 over Jun’08
Particular
(Rs crore)
Jun’08
Jun’09
% Change
1,11,213.59
1,42,672.26
28.3%
Domestic Advances (Net)
85,319.05
1,06,562.81
24.9%
Overseas Advances (Net)
25,894.54
36,109.45
39.5%
16,893
20,221
19.7%
7,282
8,741
20.0%
SME Credit
12,087
15,136
25.2%
Farm Credit
13,726
18,010
31.2%
Credit to Weaker
Sections
5,193
7,647
47.2%
Global Advances (Net)
Out of Gross Domestic Credit,
Retail Credit
Of which:
Home Loans
Key Financial Ratios : Apr-June, 2009-10

Return on Average Assets at 1.19% [0.81% at end-June, 2008]

Earning per Share (annualised) at Rs 75.28 [Rs 40.72 at end-June, 2008]

Book Value per Share at Rs 331.26 [Rs 271.97 at end-June, 2008]

Return on Equity (ROE) at 22.72% [14.97% at end-June, 2008]

Capital Adequacy Ratio at 14.56% with Tier I Capital at 8.81%
• Cost-Income Ratio declined from 49.02% to 47.06%(Y-o-Y).

Gross NPA ratio declined from 1.86% to 1.44% (Y-o-Y).

Net NPA ratio declined from 0.52% to 0.27%(Y-o-Y).

NPA Coverage improved to 81.70% [72.48% last yr] on prudent provisioning
Operating Profits: Jun’09 over Jun’08
Rs Crore
1200.00
1009.93
800.19
1000.00
800.00
600.00
26.21%
400.00
200.00
0.00
Jun'08
Jun'09
•NII grew at 14.0% (Y-o-Y) during Q1, 2009-10
Net Profits: Jun’09 over Jun’08
685.38
Rs Crore
700.00
600.00
370.86
500.00
400.00
300.00
84.81%
200.00
100.00
0.00
Jun'08
Jun'09
Other Highlights: Apr-June, FY09 & FY10
Particular (In %)
Apr-Jun’08
Apr-Jun’09
Global Cost of Deposits
5.55%
5.41%
Domestic Cost of Deposits
6.05%
6.16%
Overseas Cost of Deposits
3.43%
2.65%
Global Yield on Advances
9.08%
8.72%
Domestic Yield on Advances
10.34%
10.10%
Overseas Yield on Advances
4.91%
4.69%
Other Highlights: Apr-June, FY09 & FY10
Particular (In %)
Apr-Jun’08
Apr-Jun’09
Global Yield on Investment
7.22%
6.83%
Domestic Yield on Investment
7.39%
7.07%
Overseas Yield on Investment
5.39%
3.87%
Global NIM
2.76%
2.37%
Domestic NIM
2.92%
2.57%
Overseas NIM
1.75%
1.48%
•NIM indicates Net Interest Income as % of Avg. Interest Earning Assets.
Non-Interest Income: Apr-June, FY09 & FY10
(Rs crore)
Apr-Jun,
2008
Apr-Jun,
2009
%
Change
Comm., Exchange,
Brokerage & Incidental
Charges
272.67
301.34
10.5%
Profit on Exchange
Transactions
94.23
96.32
2.2%
Recovery from PWO
54.48
49.94
-8.3%
Trading Gains
91.17
255.44
180.2%
Total Non-Interest Income
512.55
703.04
37.2%
Provisions & Contingencies: Apr-June, FY10
(Rs crore)
AprJun’08
AprJun’09
%
Change
Provision for NPA
-41.58
304.37
--
Bad-debts written off
20.09
4.15
-79.3%
Prov. For Dep. on
Investment
218.61
-359.80
-264.6%
Prov. For Std. Adv.
16.54
8.58
-48.1%
Other Provisions
(including Prov. For staff
welfare)
6.65
3.75
-43.6%
Tax Provisions
209.02
363.51
73.9%
Total Provisions
429.33
324.55
-24.4%
Treasury Highlights: Apr-June, 2009-10
• Treasury Income increased from Rs 91.17 crore in Q1, FY09 to Rs
255.44 crore in Q1, FY10.
• As of June 30, 2009, the share of SLR Securities in Total Investment
was 86.96%.
• The Bank had 77.89% of SLR Securities in HTM and 21.67% in AFS
at end-June 2009.
• On 28th Apr, 2009, the Bank shifted Securities worth Rs 1,961 crore
from HTM to AFS.
• While the modified duration of AFS investments is 2.98 years; that
of HTM securities is 4.35 years.
• Total size of Bank’s Domestic Investment Book as on 30th June 2009
stood at Rs 52,862 crore.
• Total size of Bank’s Overseas Investment Book as on 30th June 2009
stood at Rs 3,677 crore.
Overseas Business: Apr-June, 2009-10
 In Q1, FY10, the “Overseas Business” contributed 23.5% to the
Bank’s Total Business, 23.2% to its Gross Profit and 38.8% to its
Fee-based income.
 While the Cost-Income Ratio for Domestic Operations stood at
51.98% in Q1, FY10, it was just 19.80% for Overseas Operations.
 While the Gross NPA (%) in Domestic Operations stood at 1.75%
at end-June, 2009, that for Overseas Operations was just 0.52%.
 “Gross Profit to Avg. Working Funds” ratio for Overseas
Operations was 1.73% in Q1, FY10 comparable to 1.79% for
Domestic Operations.
 On the Overseas Investment Book of Rs 3,677 crore, the Bank
held Provisions worth Rs 281.43 crore during Q1, FY10.
Sectoral Break-up of Credit: Q1, FY10
Outstanding
As on 30th June 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
5,747.86
12,096.43
5,115.41
5,677.83
5,640.75
2,977.48
1,061.31
793.20
1,742.29
496.53
3,839.53
62,366.89
1,07,555.50
(%)
5.34
11.25
4.76
5.28
5.24
2.77
0.99
0.74
1.62
0.46
3.57
57.99
100.00
NPA Movement (Gross): Q1, 2009-10
Particular
A. Opening Balance
Amount in Rs crore
1,842.93
B. Additions during Q1, FY10
450.95
C. Reduction during Q1, FY10
225.72
Of which,
Recovery
72.10
Upgradation
134.44
PWO & WO
11.82
Exchange Difference
7.36
NPA as on 30th Jun, 2009
Recovery in PWO in Q1, FY10
2,068.16
49.94
Gross NPAs: Sectoral Break-up at end-June, 2009
Sector
Gross NPA (%)
Apr-Jun’08
Gross NPA (%)
Apr-Jun’09
Agriculture
3.16%
2.15%
Large & Medium Ind.
1.24%
1.05%
Retail
3.52%
2.65%
Housing
4.63%
2.99%
SME
3.31%
2.47%
Sectoral Deployment of Credit in Q1, FY10
Sector
% share in Gross
Domestic Credit
Agriculture
16.74%
Retail
18.80%
SME
14.07%
Wholesale
50.39%
Total
100.0%
Economic Scenario
•Uncertain agricultural outlook – Total rainfall since the beginning
of Jun’09 is 19.0% below average so far. Rainfall in the remaining
monsoon season remains important for sufficiency of sugarcane,
rice, corn, oilseeds & cotton output.
•Industrial production growth has started improving, albeit at a
gradual pace. Export-oriented and capital goods sectors are still
reeling under the pressures of global crisis.
•Within Services sector, a weak global economic situation is still
exerting negative influence on services like IT, ITES, Aviation,
Hotels & Tourism.
•The Real GDP growth for FY10 is expected to be in the range of
6.0% to 6.5%.
•Inflation is likely to emerge as macro risk in Q4, FY10 on the back
of continuously rising prices of primary articles, firming up of crude
oil prices & statistical base effect. We expect inflation (WPI) to cross
5.0% by end-March, 2010.
Economic Scenario
•Management of record govt. borrowings of Rs 4.51 trln for FY10
without upsetting the bond market remains a major challenge for the
RBI.
•The spread between 1-year & 10-year bond widened to 318 bps last
week reflecting uncertain outlook for the bond market.
•High CPI-based inflation and surging capital market activity offer
limited scope for banks to reduce deposits rates, which, in turn, would
put upward pressure on interest rates.
•Large-sized market borrowings can be put through either by raising
interest rates or a large increase in created money resulting in unbridled
monetary expansion.
•In short, interest rates have developed an upward bias & would start
hardening once the credit demand picks up.
•Non-food credit growth for banks is expected to improve in the
remaining part of FY10 on the back of budget stimuli & growing
consumption sentiment.
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 optimum use of technology and right skilling of the
manpower to yield maximum customer satisfaction.
Thank you.