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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
10
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.asp8/3/2019 Edited Project1
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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
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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
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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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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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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
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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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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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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.
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ANALYSIS OF BANK OF
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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
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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.
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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
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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
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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.