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ANALYSIS OF BANK OF

BARODA

PROJECTON

ANALYSIS OFBANK OF BARODA

SUBMITTED TO: SUBMITTED BY:Prof. Shyam Ji Mehrotra Shruti Kulshreshtha

RMCB Faculty Tajinder Singh

Shobhit Srivastava

Shikha Kassodhan

Shikha Bhandari

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ANALYSIS OF BANK OF

BARODA

ACKNOWLEDGEMENT

This is to certify that while completing this project, we want to give our sincere

thanks and gratitude to all of them who have helped us to complete our project report.

This project report would not have completed without the guidance of our faculty

PROF. SHYAM JI MEHROTRA. We sincerely thank him for his valuable support

and guidance in completing the project.

We would also like to thank to all the people who have actually helped us directly and

indirectly for the completion of our project.

Shruti Kulshreshtha

Shobhit Srivastava

Shikha Kassodhan

Shikha Bhandari

Tajinder Singh

PGDM

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ANALYSIS OF BANK OF

BARODA

PREFACE

The report is on Analysis of Bank of Baroda on the basis of four performance

parameters of the Indian banks as well as few other parameters also. The four

parameters of our main analysis are:

Business Parameters

Efficiency Parameters

Productivity Parameters

Vulnerability Parameters

A care was taken that there is no manipulation or false information provided in the

project report.

This was extremely great to work on this project as it provided us with immense

knowledge and inestimable chance to learn.

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ANALYSIS OF BANK OF

BARODA

INTRODUCTION-AN OVERVIEW OF BANK OF BARODA

Date of Establishment 1908

Revenue 4908.26 ( USD in Millions )Market Cap 267425.971957 ( Rs. in Millions )

Corporate AddressBaroda House,Mandvi,Vadodara-390006, Gujarat

www.bankofbaroda.com

Management Details

Chairperson - M D Mallya

MD - M D Mallya

Directors - A Somasundaram, Ajay Mathur, Alok

Nigam, Amarjit Chopra, Amitabh Verma, Atul

Agarwal, Deepak B Patak, Deepak B Pathak,

Deepak B Phatak, Dharmendra Bhandari, M DMallya, M L Jain, Masarrat Shahid, Maulin A

Vaishnav, Milind N Nadkarni, N S Srinath, R

Gandhi, R K Bakshi, Rajiv Kumar Bakshi, Ranjit

Kumar Chatterjee, Satya Dev Tripathi, Srinath,

Sudarshan Sen, V B Chavan, V Santhanaraman,

Vinay A Shah, Vinil Kumar Saxena

Business Operation Bank - Public

Background

Bank of Baroda (BoB) was founded by Maharaja

Sayajirao Gaekwad in July 1908. It started with apaid up capital of Rs10 lakh. Bank of Baroda is a

pioneer in various customer centric initiatives in the

Indian banking sector. Bank is amongst first in the

industry to complete an all-inclusive rebranding

exercise wherein various novel customer centric

initiatives were undertaken along with the cha

Financials

Total Income - Rs. 246951.016 Million ( year

ending Mar 2011)

Net Profit - Rs. 42416.797 Million ( year endingMar 2011)

Company Secretary Vinay A Shah

Auditors

BC Jain & Co, Gupta Nayar & Co, A Sachdev &

Co, Ashwani & Associates, NC Banerjee & Co, SK

Kapoor & Co

BANK HISTORY

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ANALYSIS OF BANK OF

BARODA

Bank of Baroda (BoB) was founded by Maharaja Sayajirao Gaekwad in July 1908. It

started with a paid up capital of Rs.10 lakhs. Bank of Baroda is a pioneer in various

customer centric initiatives in the Indian banking sector. Bank is amongst first in the

industry to complete an all-inclusive rebranding exercise wherein various novel

customer centric initiatives were undertaken along with the change of logo. The

initiatives include setting up of specialized NRI Branches, Gen-Next Branches and

Retail Loan Factories/ SME Loan Factories with an assembly line approach of

processing loans for speedy disbursal of loans.

Ever since its rebranding in 2005, Bank has consistently promoted its major strengthsviz. large international presence; technological advancement and superior customer

service etc. Bank had introduced the sub brand BARODA NEXT-State of the Art-

Straight from the Heart to showcase how it has utilized technology to nurture long

term relationships for superior customer experience. The sub brand has been

reinforced by alternate delivery channels such as internet banking, ATMs, mobile

banking etc and robust delivery outfits like Retail Loan Factories, SME Loan

Factories, City Sales Office etc. Banks constant endeavour to strengthen its

branch/ATM network combined with well informed staff offering personalized

service at its various touch points have enhanced customer interactions and

satisfaction. Thus the Bank has firmly positioned itself as a technologically advanced

customer-centric bank.

Presently it has a network of 3454 branches across India and 86 branches

overseas, spread in Australia, Bahamas,

Bahrain, Belgium, Botswana, China, Fiji islands, Ghana, Guyana, Hong

Kong, Kenya, Mauritius, Malaysia, Seychelles, SouthAfrica, Singapore, Oman, Tanza

nia, Thailand, Trinidad, Uganda, UAE, UK, US and Zambia.

Bank of Baroda (BoB) is planning to expand its network in Africa for its incremental

business growth by opening ten new branches in the next four to five months.

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ANALYSIS OF BANK OF

BARODA

Business

Retail bankingIt offers products and services such as deposits, loans, credit and debit

cards, demat services, remittances, ECS (electronic clearing services, government

business, etc.

Rural and agri bankingIt offers products and services such as deposits, agricultural

loans, lockers services, etc to rural customers and agricultural sector.

Corporate bankingIt provides project finance, film finance, foreign currency loans,

working capital finance, treasury products, etc to the corporate sector.

SMEBOB also offers products and services to SME sector.

Wealth ManagementIt provides wealth management services to companies in areas

of insurance and mutual funds. In insurance it offers services to HDFC and National

Insurance Company. In mutual funds it provides services to UTI, Birla Sun Life,

Reliance Mutual Fund, Sundaram BNP Paribas, Franklin Templeton Investments and

Baroda Pioneer Asset Management Company.

Its subsidiaries are:

Domestic

BOBCARDS Ltd.

BOB Capital Markets Ltd.

Nainital Bank Ltd.

Overseas

Bank of Baroda (Botswana) Ltd.

Bank of Baroda (Kenya) Ltd.

Bank of Baroda (Uganda) Ltd.

Bank of Baroda (Guyana) Ltd.

Bank of Baroda (New Zealand) Ltd

Bank of Baroda (Tanzania) Ltd

Bank of Baroda (Trinidad & Tobago) Ltd.

Bank of Baroda (Ghana) Ltd.

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ANALYSIS OF BANK OF

BARODA

BANKS VISION & MISSION

Banks Mission Statement

A saga of vision and enterprise

It has been a long and eventful journey of almost a century across 25 countries.

Starting in 1908 from a small building in Baroda to its new hi-rise and hi-tech Baroda

Corporate Centre in Mumbai, it is a saga of vision, enterprise, financial prudence and

corporate governance.

It is a story scripted in corporate wisdom and social pride. It is a story crafted in

private capital, princely patronage and state ownership. It is a story of ordinary

bankers and their extraordinary contribution in the ascent of Bank of Baroda to the

formidable heights of corporate glory. It is a story that needs to be shared with all

those millions of people - customers, stakeholders, employees & the public at large -

who in ample measure, have contributed to the making of an institution.

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ANALYSIS OF BANK OF

BARODA

BANKS LOGO

Their new logo is a unique representation of a universal symbol. It comprises dual B

letter forms that hold the rays of the rising sun. They call this the Baroda Sun.

The sun is an excellent representation of what their bank stands for. It is the single

most powerful source of light and energy its far reaching rays dispel darkness to

illuminate everything they touch. At Bank of Baroda, they seek to be the source that

will help all their stakeholders realise their goals. To their customers, they seek to be a

one-stop, reliable partner who will help them address different financial needs. To

their employees, they offer rewarding careers and to their investors and businesspartners, maximum return on their investment.

The single-colour, compelling vermillion palette has been carefully chosen, for its

distinctiveness as it stands for hope and energy.

They also recognize that their bank is characterised by diversity. Their network of

branches spans geographical and cultural boundaries and rural-urban divides. Their

customers come from a wide spectrum of industries and backgrounds. The Baroda

Sun is a fitting face for their brand because it is a universal symbol of dynamism and

optimism it is meaningful for their many audiences and easily decoded by all.

Their new corporate brand identity is much more than a cosmetic change. It is a signal

that they recognize and are prepared for new business paradigms in a globalised

world. At the same time, they will always stay in touch with their heritage and

enduring relationships on which their bank is founded. By adopting a symbol as

simple and powerful as the Baroda Sun, they hope to communicate both.

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ANALYSIS OF BANK OF

BARODA

MAJOR COMPETITORS

BANKS PRODUCTS AND SERVICES

CompanySales

(Rs.Million)

Current

Price

Change

(%)P/E Ratio

Market Cap.

(Rs Million)

52-Week

High/Low

SBI 813943.64 1676.15 2.85 14.64 1060638.81 2960/1576

Bank Of Baroda 218859.16 691.15 3.35 5.86 267425.97 1007/630

PNB 269864.80 782.50 2.18 5.38 247620.38 1237/751

Canara Bank 230640.13 376.30 2.65 4.59 164441.60 672/349

Bank Of India 217517.24 281.35 5.20 7.03 151429.71 498/265

Union Bank Of

India164526.15 174.15 0.64 4.58 91260.06 359/156

IDBI 186008.23 81.75 3.81 4.37 79655.33 168/77

Indian Bank 93610.28 185.00 1.87 4.40 79507.45 255/167

Oriental Bank 120878.14 198.70 1.82 4.59 58060.48 412/193

Allahabad Bank 110146.92 120.55 3.39 3.62 57145.85 240/114

Corporation Bank 91352.48 350.80 1.40 3.49 51735.29 658/336

Indian Overseas

Bank121014.65 75.10 2.11 4.30 46344.33 164/73

CentralBank of

India152205.66 67.10 3.47 4.07 43193.30 170/66

Syndicate Bank 114508.59 71.10 2.45 3.37 40817.94 133/67

UCO Bank 113708.02 48.75 3.72 2.91 30528.73 122/45

StateBank

Bikane&Jai47964.83 311.50 0.94 3.88 21770.00 600/302

Vijaya Bank 58440.60 46.15 3.24 4.51 21742.67 104/45

Bank of

Maharashtra55630.88 39.90 2.31 4.98 19027.65 69/38

Dena Bank 50335.26 50.70 3.79 2.49 16752.80 119/48

United Bank 63414.57 46.75 1.63 2.84 16015.56 114/46

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ANALYSIS OF BANK OF

BARODA

Loan Products

Wholesale Banking

Mobile Banking

Internet Banking

DEMAT

NRI Remittances

Baroda Health

ATM / Debit Cards

Deposit Products

SME Banking

Retail Banking

Rural / Agri Banking

Wealth Management

CPPC - Pension

Pre-paid Gift Card

Interest Rates

FINANCIAL PERFORMANCE

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http://www.bankofbaroda.com/pfs/retailloans.asphttp://www.bankofbaroda.com/cbs/wholesale.asphttp://www.bankofbaroda.com/MobileBanking/Home.asphttp://www.bankofbaroda.com/ibobmbob.asphttp://www.bankofbaroda.com/nri_remittances.asphttp://www.bankofbaroda.com/pfs/barodahealth.asphttp://www.bankofbaroda.com/pfs/atm_debitcards.asphttp://www.bankofbaroda.com/pfs/deposits.asphttp://www.bankofbaroda.com/bbs/sme.asphttp://www.bankofbaroda.com/pfs/index.asphttp://www.bankofbaroda.com/rur/index.asphttp://www.bankofbaroda.com/wealth.asphttp://www.bankofbaroda.com/cppchome.asphttp://www.bankofbaroda.com/pfs/GiftCards2.asphttp://www.bankofbaroda.com/interest.asphttp://www.bankofbaroda.com/pfs/retailloans.asphttp://www.bankofbaroda.com/cbs/wholesale.asphttp://www.bankofbaroda.com/MobileBanking/Home.asphttp://www.bankofbaroda.com/ibobmbob.asphttp://www.bankofbaroda.com/nri_remittances.asphttp://www.bankofbaroda.com/pfs/barodahealth.asphttp://www.bankofbaroda.com/pfs/atm_debitcards.asphttp://www.bankofbaroda.com/pfs/deposits.asphttp://www.bankofbaroda.com/bbs/sme.asphttp://www.bankofbaroda.com/pfs/index.asphttp://www.bankofbaroda.com/rur/index.asphttp://www.bankofbaroda.com/wealth.asphttp://www.bankofbaroda.com/cppchome.asphttp://www.bankofbaroda.com/pfs/GiftCards2.asphttp://www.bankofbaroda.com/interest.asp


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ANALYSIS OF BANK OF

BARODA

Investment deposite 32.05 28.46 27.96 26.22 24.24

Cash deposit 4.46 5.70 5.80 5.57 6.11Credit deposit ratio 72.68 72.33 70.45 69.91 72.56

BANK OF BARODA

Mar201

1

Mar201

0

Mar200

9

Mar200

8 Mar2007

Rs. Crores 12 mths 12 mths 12 mths 12 mths 12 mths

Interest income 21,885.92 16,698.34 15,091.58 11,813.48 9,212.64

Investment / dividend income 2,809.19 2,806.36 2,757.66 2,051.04 1,381.79

Interest expended 13,083.66 10,758.86 9,968.17 7,901.67 5,426.56

Provision for contingencies / NPA

etc.1,699.88 976.28 1,809.20 1,157.05 1,369.95

PBDT 5,650.32 4,238.06 3,342.94 2,207.15 1,654.26

PBT 5,650.32 4,238.06 3,342.94 2,207.15 1,654.26

PAT 4,241.68 3,058.33 2,227.20 1,435.52 1,026.47

Cash & bank balance In Crores

Money at call 30,065.89 21,927.09 13,490.77 12,929.56 11,866.85

Balance with RBI 19,868.18 13,539.97 10,596.34 9,369.72 6,413.52

Investments 71,260.63 61,182.38 52,445.88 43,870.07 34,943.63

Advances228,676.36 175,035.29 143,985.9

0106,701.32 83,620.87

-

Equity capital 392.81 365.53 365.53 365.53 365.53

Deposits305,439.48 241,044.26

192,396.9

5152,034.13 124,915.98

Borrowings 22,307.85 13,350.09 5,636.09 3,927.05 1,142.56

Other liabilities & provisions 9,656.73 8,815.97 16,538.15 12,594.41 8,437.70

Total assets /liabilities358,397.18 278,316.71

227,406.7

3179,599.50 143,146.18

2006 2007 2008 2009 2010 2011

Net worth 8,649.94 11,043.93 12,835.54 15,106.39 20,993.11

Growth (%)

Interest income 27.77 28.23 27.74 10.64 31.06

Interest expended 40.03 45.61 26.15 7.93 21.60

Provision forcontingencies / NPA etc. 13.46 -16.0 56.0 -46.0 74.0

PAT 24.12 39.85 55.14 37.31 38.69

Deposits 33.03 21.74 26.54 25.28 26.71

Advances 39.57 27.60 34.94 21.56 30.64

Margins ratios (%)

PBDT (incl. NPA, etc.) /operating income 25.81 25.38 22.15 18.68 17.95

PAT / operating income 19.38 18.31 14.75 12.15 11.14

Returns ratios (%)

PAT / net worth 20.2 20.24 17.35 12.99 11.86

PAT / total assets 1.18 1.09 0.97 0.79 1.86

PBDT / total assets 1.57 1.52 1.47 1.22 1.15

PBDT / capital employed 26.91 28.05 26.04 19.98 16.49

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ANALYSIS OF BANK OF

BARODA

Operating income / total assets (times) 0.061 0.059 0.066 0.065 0.064

Capital adequacy 11.80 12.91 14.05 14.36 14.52

2011 2010 2009 2008 2007

NIM(%) 2.456007048 2.134072367 2.252972021 2.178073992 2.64490467

Capital Adequacy (%)

BASEL- 12.94% 14.05% 14.36% 14.52%

BASEL 1 - 7.64% 8.49% 9.20% 9.99%

BASEL 2 - 5.30% 5.56% 5.16% 4.53%

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ANALYSIS OF BANK OF

BARODA

RISK MANAGEMENT OF BANK OF BARODA

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ANALYSIS OF BANK OF

BARODA

Credit Risk

The credit risk mechanism consists of policies and practices that ensure credit risk is

measured, and monitored at account level and portfolio level. The Credit Risk

Management policy along with Real Estate Lending Policy and Collateral

Management Policy address the Credit Risk related to lending. Credit Approving

Authority, Prudential Exposure Limits, Risk Rating System, Risk Based Pricing,

Portfolio Management are the various instruments for management of Credit Risk.

Bank has set up Credit Approval Grids at Regional Offices/ Field General Managers

Offices and Central Office. Bank has also developed credit rating models for exposure

above ` 2 lakh and scoring model for Retail lending schemes. Entire credit portfolio of

the bank is subject to internal credit rating. Bank has credit rating migration anddefault probability data for the last 9years.

Market Risk

Asset Liability Management Policy and Treasury Policy aid the management of

Market Risk in theBanking and trading books. Overall responsibility ofmanaging the

market risk lies with the Asset LiabilityCommittee (ALCO). Bank has also developed

a framework for quantifying the Pillar-2 risks and has put in place comprehensiveInternal Capital Adequacy Assessment Process (ICAAP) framework in line with RBI

guidelines. Bank is also in the process of introducing a Risk Based Performance

measurement system to assess the profitability of its business units, products and

customers.

Operating Income

Bank has implemented the New Capital Adequacy Framework as per the timelines

prescribed by RBI. While the Bank, to start with, has adopted Standardized Approach

for Credit Risk, Standardize duration method for market risk and Basic Indicator

approach for Operational risk, the initiatives so far undertaken/ envisaged are geared

towards enabling the Bank to comply with the standards set out for more advanced

capital measurement approaches in the Basel-II Accord.

LIQUIDITY MANAGEMENT BY BANK OF BARODA

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ANALYSIS OF BANK OF

BARODA

Overview / Introduction

Bank of Baroda is technology led and service driven Bank and operates out of large

expanding network of 3100 plus outlets across the country. 100% outlets are

electronically linked i.e. working under Core Banking Solution (CBS). Baroda Cash

Management Services (BCMS) is a software application that facilitates management

of customers fund, particularly, of corporate customers. BCMS is our thrust area and

technology advantage helps us in delivering superior products. This provides them

competitive advantage and we may route our voluminous collection/payment through

them for faster credit to Corporate/ their suppliers.

BCMS is based on robust technology capable to cater to collection/receivables or

payment/payable requirement of - Large Corporate

Small and Medium Enterprises

NBFCs

Mutual Funds

Financial intermediaries

Liquidity Management

Corporate main challenge revolves around ensuring that the companys cash

resources are utilized to maximum advantage.

Liquidity Management helps in managing funds in various accounts called

Contributing Account by sweeping in one account called Concentration Account at

specified time (may be end of day) and funding of different contributing accounts

through Concentration Account at specified time (may be beginning of day).

Liquidity Ratios

key variables for Liquidity

31.3.2011 31.3.2010

Liquid Assets 499,340,678 354,670,576

Total Assets 3583,97,17,54 2783,16,70,28

Total deposits 305439,48,19 241261,92,52

Loans 228676,36,09 175035,28,59

Investments 71260,63,09 61182,37,54

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ANALYSIS OF BANK OF

BARODA

Liquidity Ratios (%)

31.3.2011 31.3.2010

Liquid Assets to Total Assets 13.93 12.74

Liquid Assets to Total deposits 16.34 14.70

Loans to Total deposits 74.86 72.24

Loans to Total Assets 63.80 62.89

Loans to Investments (times) 3.20 2.86

Liquid Assets to Total Assets

This ratio indicate the net liquidity out of the total assets held by the bank, where

liquidity means cash and cash equivalent assets which can be converted in cash within

one day.

Higher the proportion of this ratio higher the liquidity of the bank, but up to sum

extent this also decrease the asset utilization given no productivity generated by cash,

The ratio for Bank of Baroda has increased marginally which shows adequate

liquidity held by the bank i.e. 12.47%, 13.93%.

Liquid Assets to Total deposits-

This ratio indicate extent of liquidity maintained by the bank for meeting out the

demand made by the depositors, in Bank of Baroda the ratio maintained by the bank

seems quite better 16.34% and 14.70% for 2011 and 2010 respectively.

Loans to Total deposits-

This ratio indicate the degree to which the bank has already used up the available

resources to accommodate the credit needs of customers ,For Bank of Baroda 74.86%

and 72.24% for 2011 and 2010 respectively, shows increase in last year by new loan

creation comparatively to deposits. The figure above for bank is quite reasonable

managing earning and liquidity both.

Loans to Total Assets-

This ratio indicates liquid assets out of total assets, where loan are the liquid assets for

the bank,

For Bank of Baroda 63.80% and 62.89% for 2011 and 2010 respectively, the ratio

increased during 2010 to 2011 which leading to pressure on liquidity of the bank.

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ANALYSIS OF BANK OF

BARODA

Loans to Investments-

Bank has two main channels for deployment of resource viz, loan and investment

where loans are expected to provide the higher yield but also have higher credit risk

ans are more liquid then investments thus proper mix of loans and investments.

For Bank of Baroda 3.20 and 2.86 times for 2011 and 2010 respectively. This is on

increasing trend during last fiscal year indicating higher return with higher credit risk

and liquidity

Where-

Liquid Assets = cash + balance with RBI + Balances with Banks and Money at Call

and Short Notice.

BANK PROFITABILITY ANALYSIS

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ANALYSIS OF BANK OF

BARODA

SPREAD

It is the difference between the interest income and interest expenses. It contributes to

banks profit, after providing for loan losses. It 2007 it was 3786.08 which rose to

8802.26 in the year 2011. Thus, the increasing spread would help in earning more

profit. It also shows the good quality of loan and investments of the bank

BURDEN

It is the difference between non-interest income and non-interest expenses. The

burden is usually negative as non-interest expense exceeds the non-interest income.

Even after high burden the bank can increase, it profits by increasing its fee income

and saving on operating cost.

NIM

It is measure of difference between the interest income generated by banks and the

amount of interest paid out to the lenders.

Year 2011 2010 2009 2008 2007

NIM(%) 2.456007048

2.13407236

7

2.25297202

1

2.17807399

2 2.64490467

It can be seen through the table that the NIM is positive in the past five years but

doesnt follow any particular trend. It was maximum in the year 2007.

2011 2010 2009 2008 2007

Spread 8,802.26 5,939.48 5,123.41 3,911.81 3,786.08

Provision 1,699.88 976.28 1,809.20 1,157.05 1,369.95

Burden -2,860.69 -1,904.87 -1,087.00 -1,319.23 -1,389.66

operating income 4,241.68 3,058.33 2,227.20 1,435.52 1,026.46

Profit/Loss from

Investments

PBDT 5,650.32 4,238.06 3,342.94 2,207.15 1,654.26

Depreciation 0 0 0 0 0

PBT 5,650.32 4,238.06 3,342.94 2,207.15 1,654.26

TAX 1,408.64 1,179.73 1,115.74 771.63 627.79

PAT4,241.68 3,058.33 2,227.20 1,435.52 1,026.47

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ANALYSIS OF BANK OF

BARODA

ANALYSIS OF BANK OF BARODA BASED UPON THE

PERFORMANCE PARAMETERS

Bank of Barodais one of the oldest banks in India and the third largest commercial

public sector bank afterState Bank of India and Punjab National Bankin terms ofnet

profit and total business.

The parameters under which bank are evaluated in real life are:-

1) EFFICIENCY PARAMETERS

Income to Asset Ratio

2007 2008 2009 2010 2011

PAT / total

assets

0.82 0.89 1.09 1.21 1.33

interest

income / total

assets

7.44 8.14 8.16 7.56 7.50

other

income / total

assets

0.38 0.43 0.35 0.30 0.25

Income to Asset Ratio provides a standard for evaluating how efficiently financial

management employs the amount invested in the firms assets. That means it measures

how optimally profits are being generated from the assets employed. As the trend is

increasing it shows that the bank is efficient in generating profits by the use of its

assets. Though it has declined in 2011, it shows the increase in the non performing

assets which is a matter of concern.

Expenditure to Asset Ratio

2007 2008 2009 2010 2011

Interest

expenses to

Total assets

ratio

4.23 4.90 4.90 4.25 4.11

Operating

expenses to

Total asset

ratio

2.01 1.94 1.78 1.77 1.70

19
http://www.wikinvest.com/wiki/State_Bank_of_Indiahttp://www.wikinvest.com/wiki/Punjab_National_Bankhttp://www.wikinvest.com/wiki/Net_incomehttp://www.wikinvest.com/wiki/Net_incomehttp://www.wikinvest.com/wiki/State_Bank_of_Indiahttp://www.wikinvest.com/wiki/Punjab_National_Bankhttp://www.wikinvest.com/wiki/Net_incomehttp://www.wikinvest.com/wiki/Net_income


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ANALYSIS OF BANK OF

BARODA

Interest expense is the money the bank pays out in interest on loans. There is a

decrease in the interest expense which indicates the increase in the deposit portfolio of

the bank. Operating expense consists of salaries paid to employees, research and

development costs, legal fees, accountant fees, bank charges, office supplies,

electricity bills, business licenses, and more. Here the operating expense to total asset

ratio is decrease over a period of time. More the operating expense more is the

burden. As it is decreasing in 2011 it shows the decrease in the burden.

2) BUSINESS PARAMETERS

Under business parameters business growth and market share are specific parameters:

a) Business growth: Business growth is the cardinal objective of a bank .i ismeasured in terms of:

Year Growth in

deposits (%)

Growth in

advances (%)

Growth in

Investments (%)

2007 33.36 39.57 -.048

2008 21.70 26.73 25.54

2009 26.54 34.94 19.54

2010 25.28 21.56 16.65

2011 26.17 30.64 16.47

i) Growth in deposits: Growth is calculated on a year-on-year basis. BOB deposits

are grown by 26.17% in 2010-2011.year by year the deposits always keep on

increasing, it seems that there is more growth perspective in banking sectors .the

economy of the India is blooming.

ii) Growth in advances: Similarly Bank of Baroda had aggregate advances of

Rs.228676, 36, 09 as on 2011.Growth in advances has been 30.64%

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ANALYSIS OF BANK OF

BARODA

iii) Growth in investments: Bank has investments of Rs.71260, 63, 09 in

2011.Growth in investments has been 16.47% 2010-2011.each year the investments

have been increasing by certain percentage which indicate that the bank have been

performing well in banking sector and found growth in its performance.

b) Market shares: Even in a rising fixed (or term) deposit interest scenario, the

Banks Domestic Low-cost or CASA deposits richly grew by 26.72% (y-o-y) forming

34.4% share of the total Domestic Deposits. The Banks Priority Sector Credit too

recorded a decent growth of 18.2% during 2010-11. The Bank has managed to gain

market share consistently during the past three years amidst maintaining high

profitability and asset quality standards.

Some initiatives taken by Bank of Baroda

The Bank comfortably surpassed this target and extended banking services to

1,228 villages in the year 2010-11.

Education Loan Interest Subsidy Scheme for students belonging to

Economically Weaker Sections was launched as per the directives of Ministry

of Human Resource Development, Government of India.

A Tie-up Arrangement was made with IndiaFirst Life Insurance Company for

providing Life Insurance Cover to the Banks Home Loan borrowers.

The Bank has opened 157 new branches in rural and semi-urban areas during 2010-

11.

If we analyze the credit deposit ratio, it defines the extent to which the bank has been

able to deploy funds in earning assets.

Year 2007 2008 2009 2010 2011

Credit Deposit Ratio(times) 65.67 68.72 72.78 73.60 73.87

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ANALYSIS OF BANK OF

BARODA

3) PRODUCTIVITY PARAMETERS

a. Average business per employee

Year 2007 2008 2009 2010 2011Business per

employee

(Rs. in

crore)

5.15 6.65 8.63 9.81 12.29

Average

Business per

employee

(Rs in crore)

4.64 5.94 7.57 8.94 11.26

0

2

4

6

8

10

12

14

Average Business per employee is a measure of how efficiently a particular bank is

utilizing its employees. Ideally, a bank wants the highest business per employee

possible, as it denotes higher productivity. Rising revenue per employee is a positive

sign that suggests the bank is finding ways to squeeze more sales/revenues out of each

of its employee.

Business per Employee =Total Income/ No. of Employees

22

60

62

64

66

68

70

72

74

76

2007 2008 2009 2010 2011

Credit Deposit

Ratio(times)


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ANALYSIS OF BANK OF

BARODA

From 2010 to 2011, the business per employee increased by 20.17% that is a good

sign.

b. Average yield on Advances

Year 2007 2008 2009 2010 2011

Yield on Advances8.37% 9.53% 9.50% 8.55% 8.49%

8.37%

9.53% 9.50%

8.55% 8.49

7.50%

8.00%

8.50%

9.00%

9.50%

10.00%

c. Average cost of Deposits

Year 2007 2008 2009 2010 2011

Cost of Deposits 4.77% 5.69% 5.71% 4.90% 4.56%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

Trend follow by both the parameters is same and significant difference between the

two parameters shows ample earning opportunities for the bank

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ANALYSIS OF BANK OF

BARODA

4. NPA Ratio

Following graph shows the NPA ratio of Bank of Baroda as compare to its

competitors, which is maintaining and reducing its NPAs year on year basis.

Currently in 2011, value is .35%.

4) VULNERABILITY PARAMETERS

a) Capital Adequacy Ratio (in Cr)2011

Total Tier I Capital 22084.29

Out of which: Paid up share capital392.81

Innovative Perpetual Debt Instrument 1911.70

Deductions679.52

Eligible Tier I Capital 21404.76

Year 2007 2008 2009 2010 2011

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ANALYSIS OF BANK OF

BARODA

Capital adequacy

ratio(Basal1)

11.80 12.91 12.88 12.84 13.02

Tier I 8.74 7.63 7.79 8.22 8.96

Tier II 3.06 5.28 2.09 4.62 4.06

Capital adequacyratio(BASEL II)

112.94 14.05 14.36 14.52

Tier I 7.64 8.49 9.20 9.99

Tier II 5.30 5.56 5.16 4.53

b) Contingent LiabilitiesYear 2011 2010 2009 2008 2007

Contingent

Liability112272.64 77997.01 64745.82 75364.33 54999.86

Contingent liabilities arise due to off-balance sheet activities like forward contracts,

guarantees, acceptance and deposits. The contingent liability in 2007 was 54999.86 it

grew to 112272.64 in 2011. The growth percentage is 51%, which is not large as

compare to business growth.

c) Advances to Sensitive Sectors

Priority Sector

Priority Sector Advances of the Bank surged from Rs 48,552.36 crores as at the end-

March 2010 to Rs 57,363.60 crores as at the end-March 2011 and formed 43.57% of

the Adjusted Net Bank Credit (ANBC) against the mandated target of 40.00%.

Agriculture Advances (both direct and indirect) of the Bank recorded a growth of

13.47% over the previous year and rose to Rs 24,529.22 crores as at end-March 2011.

However, the Banks lending to Direct Agriculture depicted a stronger growth of

28.72% (y-o-y) to Rs 17,157.83 crores during 2010-11.

Under its flagship agriculture loan product Baroda Kisan Credit Card, the Bank

issued as many as 2, 44,558 Credit Cards during 2010-11 to provide credit to farmers.

The Bank financed as many as 2, 72,415 new farmers during the year under review.

As a part of its microfinance initiatives, the Bank credit-linked 19,257 Self Help

Groups (SHGs) with an amount of Rs 163.77 crores during 2010-11, thereby taking

the total number of SHGs credit-linked to 1, 34,942 amounting to Rs 956.96 crore.

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ANALYSIS OF BANK OF

BARODA

The growth in lending to MSME Sector during the last three years is given in the

table below.

Year Growth (%, YoY)

2008-09 24.18%

2009-10 43.98%

2010-11 29.63%

d) Rural and Agricultural Lending

Bank sponsored Regional Rural Banks (RRBs) in various states with a network of

1,223 branches and total business of Rs 18,800 crore as of end-March, 2011.

ROE Analysis

2007 2008 2009 2010 2011

Return on

Assets0.72% 0.80% 0.98% 1.10% 1.18%

F.L. (%) 16.9 18.8375 19.8775 20.172 18.203

Return on

Net Worth12.17% 15.07% 19.48% 22.19% 21.48%

ROE = Return on Assets * Financial leverage

ROA is PAT/Total assets denoting the profitability of bank assets

Financial Leverage (Equity Multiplier) is Assets/Equity: Banks owners earn

profits on the spread between interest on lending and the interest on deposits. When

the advantage (EM) is high, banks are accepting many deposits and can earn high-income levels. A high multiplier multiplies profits when profits are positive.

However, in periods with negative profits, negative profits may also be multiplied. A

high EM is a risk factor since it reduces the amount of assets that can go bad without

the bank itself going bankrupt.

FINANCIAL INCLUSION BY THE BANK

Bank has been allocated -2864- villages having population more than 2000 by SLBCs

for providing banking facilities under financial inclusion by March 2012.

26


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ANALYSIS OF BANK OF

BARODA

Bank has utilized Information & Communication Technology based BC Model to

render banking services in most of the villages under financial inclusion. As per

convenience, bank has also adopted Mobile Van model and Brick and Mortar

Branches to cover villages.

Their Bank has, by now, established 52 Baroda Grameen Paramarsh Kendras

(BGPKs) to provide credit counseling and financial literacy to rural community. Also,

during the year under review, their Bank opened 11 more Baroda Swarojgar Vikas

Sansthans (BSVSs) / Baroda R-SETI Centres taking the total number of BSVS to 36.

Their Bank opened 14 new financial literacy and credit counselling centres, christened

as SARATHEE, to promote financial inclusion and economic upliftment. Besides,

Their Bank has already implemented the Business Facilitators model across the

country to accelerate Financial Inclusion of the excluded segment as well as to

augment agriculture portfolio. This year, their Bank also set up a Micro Loan Factory

at Raebareli and Sultanpur in U.P. to facilitate SHG financing through a mobile van.

TABLE SHOW KEY FINANCIAL INDICATORS

S.No. Particulars (In Percentage) 31.03.2007 31.03.2008 31.03.2009 31.03.2010 31.03.2011

27


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ANALYSIS OF BANK OF

BARODA

1Interest Income / Average

Working Funds (AWF)7.22% 7.63% 7.78% 6.86% 6.97%

2 Interest expenses / AWF 4.35% 5.10% 5.14% 4.42% 4.16%

3 Net Interest Margin (NIM) 3.05% 2.90% 2.91% 2.74% 3.12%

4 Interest spread / AWF 2.87% 2.53% 2.64% 2.44% 2.80%5 Non-Interest Income / AWF 1.11% 1.32% 1.42% 1.15% 0.89%

6 Operating expenses / AWF 2.04% 1.96% 1.84% 1.56% 1.47%

7 Cost Income Ratio 51.30% 50.89% 45.38% 43.57% 39.87%

8 Gross (Operating) profit / AWF 1.94% 1.89% 2.22% 2.03% 2.22%

9 Net profit / AWF 0.82% 0.93% 1.15% 1.26% 1.35%

10 Return on Net Worth 12.17% 15.07% 19.48% 22.19% 21.48%

11 Return on Assets 0.72% 0.80% 0.98% 1.10% 1.18%

12 Return on Average Assets 0.80% 0.89% 1.10% 1.21% 1.33%

13 Yield on Advances 8.37% 9.53% 9.50% 8.55% 8.49%14 Cost of Deposits 4.77% 5.69% 5.71% 4.90% 4.56%

15

Dividend payout Ratio

(including Corporate Dividend

Tax)

24.59% 23.75% 17.22% 20.90% 17.76%

16 Credit -- Deposit Ratio 74.35% 77.32% 81.94% 84.47% 86.77%

17

Credit + Non SLR Investment

(excluding Investments in

Subsidiaries) -- Deposit Ratio

80.21% 82.78% 87.44% 88.74% 90.29%

18Capital Adequacy Ratio

(BASEL I)11.80% 12.91% 12.88% 12.84% 13.02%

Tier I 8.74% 7.63% 7.79% 8.22% 8.96%

Tier II 3.06% 5.28% 5.09% 4.62% 4.06%

19Capital Adequacy Ratio

(BASEL II)- 12.94% 14.05% 14.36% 14.52%

Tier I - 7.64% 8.49% 9.20% 9.99%

Tier II - 5.30% 5.56% 5.16% 4.53%

MEASURE TO IMPROVE PROFITABILITY BY THE

BANK

The action plan for this involves improvisation of resources embodying measures to

improve income and contain costs and risks.

28


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ANALYSIS OF BANK OF

BARODA

Stock Info

Sector BankingMarket Cap (` cr) 33,226

Balance Sheet of Bank Of Baroda ------------------- in Rs. Cr. -------------------

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Capital and Liabilities:

Total Share Capital 392.81 365.53 365.53 365.53 365.53

Equity Share Capital 392.81 365.53 365.53 365.53 365.53

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 20,600.30 14,740.86 12,470.01 10,678.40 8,284.41

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Net Worth 20,993.11 15,106.39 12,835.54 11,043.93 8,649.94

Deposits 305,439.48 241,044.26 192,396.95 152,034.13 124,915.98

Borrowings 22,307.85 13,350.09 5,636.09 3,927.05 1,142.56

Total Debt 327,747.33 254,394.35 198,033.04 155,961.18 126,058.54

Other Liabilities & Provisions 9,656.73 8,815.97 16,538.15 12,594.41 8,437.70

Total Liabilities 358,397.17 278,316.71 227,406.73 179,599.52 143,146.18

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Assets

Cash & Balances with RBI 19,868.18 13,539.97 10,596.34 9,369.72 6,413.52

Balance with Banks, Money at Call 30,065.89 21,927.09 13,490.77 12,929.56 11,866.85

Advances 228,676.36 175,035.29 143,985.90 106,701.32 83,620.87

Investments 71,260.63 61,182.38 52,445.88 43,870.07 34,943.63

Gross Block 4,548.16 4,266.60 3,954.13 3,787.14 2,244.62

Accumulated Depreciation 2,248.44 1,981.84 1,644.41 1,360.14 1,155.81

Net Block 2,299.72 2,284.76 2,309.72 2,427.00 1,088.81

Capital Work In Progress 0.00 0.00 0.00 0.00 0.00

Other Assets 6,226.40 4,347.22 4,578.12 4,301.83 5,212.50

Total Assets 358,397.18 278,316.71 227,406.73 179,599.50 143,146.18

Contingent Liabilities 112,272.64 77,997.01 64,745.82 75,364.33 54,999.86

Bills for collection 33,735.67 27,949.60 22,584.64 15,105.51 12,976.53

Book Value (Rs) 536.16 414.71 352.37 303.18 237.46

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ANALYSIS OF BANK OF

BARODA

Beta 0.7

52 Week High / Low 1,050/655

Avg. Daily Volume 82,886

Face Value (`) 10

BSE Sensex 19,136

Nifty 5,750ROE 19.88%

Shareholding Pattern (%)

Promoters 57.0

MF / Banks / Indian Fls 16.0

FII / NRIs / OCBs 17.1

Indian Public / Others 9.9

CONCLUSION

By analyzing the factors, we can conclude that the banks performance has been

improving over the past 5 years.

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ANALYSIS OF BANK OF

BARODA

Bank of Baroda India's third largest public sector lender total business to grow

by about 24% on-year to over Rs 6.5 trillion in the current fiscal year 2011-12.

Bank of Baroda has a network of 3454 branches across India and 86 branchesoverseas.

Bank of Baroda (B0B) is planning to expand its network in Africa for its

incremental business growth by opening ten new branches in the next four to

five months.

Total Business (Deposit & Advances) increased to Rs 5,34,116 crore

reflecting a growth of 28.30%..

Gross Profit and Net Profit were Rs 6,981.61 crore and Rs 4,241.68 crorerespectively. Net Profit registered a growth of 38.7% over previous year.

Bank has been allocated -2864- villages having population more than 2000 by

SLBCs(state level banker committee) for providing banking facilities under

financial inclusion by March 2012.

Bank opened 14 new financial literacy and credit counseling centers,

christened as SARATHEE, to promote financial inclusion and economic

upliftment.

A Bank Tie-up Arrangement was made with India First Life Insurance Company for

providing Life Insurance Cover to the Banks Home Loan borrowers.

Thus the growth prospects of the bank are good, even the bank is working on

the improving the services provided to the customers, which would in turn

result in the over all prosperity of the bank.

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