MIRA
INFORM REPORT
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Report Date : |
20.06.2008 |
IDENTIFICATION
DETAILS
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Name : |
BANK OF BARODA |
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Registered Office : |
Bank of Baroda Building, Mandvi, Vadodara – 390 006, Gujarat |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Year of Establishment : |
1908 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BRDB01794C |
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PAN No.: [Permanent
Account No.] |
AAACB1534F |
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Legal Form : |
Subject is a Government of India Bank. The Bank’s Shares are traded on the Stock Exchanges. |
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Line of Business : |
Banking Activities |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed bank having fine track. The bank is progressing well. Directors are reported as experience of and respectable business. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. Fundamentals are strong and healthy. The bank can be considered normal for business dealings at usual trade terms and conditions. The bank can be regarded as a promising business partner in a medium to long-run. |
LOCATIONS
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Registered Office : |
Bank of Baroda Building, Mandvi, Vadodara – 390 006, Gujarat, India |
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Tel. No.: |
91-265-2330274 /2563932 |
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Fax No.: |
91-265-2330824 / 2562445 |
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E-Mail : |
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Website : |
http://www.bankofbaroda.com |
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Head Office : |
Suraj Plaza -1, Sayaji Ganj, Baroda - 390005 |
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Tel. No.: |
91-0265-2361852 (10 Lines) |
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Fax No.: |
91-0265-2362395 / 2361824/ 2361806 |
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Corporate Office : |
C-26, G-Block, Badra Kurla, Bandra, Mumbai-400051 India |
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Tel. No.: |
91-22-66985000 / 04 |
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Fax No.: |
91-22-26523500 |
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Central Office : |
3, Walchand Hirachand Marg, Ballard Pier, Mumbai – 400 001, Maharashtra, India |
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Branches : |
The bank has 2715 domestic branches and 39 foreign branches in all major cities in India and Overseas. |
DIRECTORS
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Name : |
Mr. Anil K Khandelwal |
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Designation : |
Chairman
& Managing Director |
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Name : |
Mr. V Santhanaraman |
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Designation : |
Executive
Director |
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Name : |
Mr. Satish C Gupta |
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Designation : |
Executive
Director |
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Name : |
Mr. G C Chaturvedi |
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Designation : |
Nominee
(Government) |
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Name : |
Mr. A Somasundaram |
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Designation : |
Nominee
(RBI) |
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Name : |
Mr. Milind N Nadkarni |
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Designation : |
Director |
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Name : |
Mr. Amarjit Chopra |
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Designation : |
Director |
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Name : |
Mr. Masarrat Shahid |
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Designation : |
Director |
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Name : |
Mr. Maulin A Vaishnav |
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Designation : |
Director |
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Name : |
Mr. Dharmendra Bhandari |
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Designation : |
Director |
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Name : |
Mr. Manesh Prabhulal Mehta |
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Designation : |
Director |
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Name : |
Mr. Deepak Bhaskar Phatak |
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Designation : |
Director |
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Name : |
Mr. A Somasundaram |
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Designation : |
Director |
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Name : |
Mr. Milind Narayanrao Nadkarni
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Designation : |
Director |
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Name : |
Mr. Satish Chander Gupta |
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Designation : |
E D
& Wholetime Director |
KEY EXECUTIVES
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Name : |
Shri T.K. Balasubramanian |
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Designation : |
Senior Manager |
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Address : |
T. Nagar Branch, Bank of Baroda, 15- Gopalkrishnan Street, T. NAgar, Chennai – 600017 |
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Date of Birth/Age : |
11.06.1947 / 59 Years |
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Qualification : |
M. Com., CAIIB-1 |
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Name : |
Mr. V. J. Sanmthanam |
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Designation : |
General Manager |
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Name : |
Mr. B. Samant |
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Designation : |
General Manager |
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Name : |
Mr. R. K. Garg |
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Designation : |
General Manager |
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Name : |
Mr. B. A. Prabhakar |
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Designation : |
General Manager |
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Name : |
Mr. A. D. Parulkar |
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Designation : |
General Manager |
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Name : |
Mr. V. B. L. Saksena |
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Designation : |
General Manager |
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Name : |
Mr. M. L. Rathi |
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Designation : |
General Manager |
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Name : |
Mr. B. D. Joshi |
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Designation : |
General Manager |
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Name : |
Mr. C. H. Palan |
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Designation : |
General Manager |
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Name : |
MR. S. Vaidyanathan |
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Designation : |
General Manager |
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Name : |
Mr. Amitav Sanyal |
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Designation : |
General Manager |
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Name : |
Mr. D. A. Parekh |
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Designation : |
General Manager |
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Name : |
Mr. A. C. Suri |
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Designation : |
General Manager |
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Name : |
Mr. Muneer Khan |
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Designation : |
General Manager |
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Name : |
Mr. D.Rajagopalan |
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Designation : |
General Manager |
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Name : |
Mr. R. K. Bansal |
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Designation : |
General Manager |
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Name : |
Mr. V. K. Sharma |
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Designation : |
General Manager |
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Name : |
Mr. D. D. Maheshwari |
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Designation : |
General Manager |
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Name : |
Mr. K. N. Suvarna |
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Designation : |
General Manager |
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Name : |
Mr. A. S. Khurana |
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Designation : |
General Manager |
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Name : |
Mr. M. S. Malhotra |
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Designation : |
General Manager |
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Name : |
Mr. K. K. Agarwal |
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Designation : |
General Manager |
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Name : |
Dr. K. C. Chakrabarty |
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Designation : |
General Manager |
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Name : |
Mr. R. Krishnamurthy |
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Designation : |
General Manager |
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Name : |
Mr. V. Chandrasekhar |
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Designation : |
General Manager |
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Name : |
Mr. B. G. Baria |
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Designation : |
General Manager |
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Name : |
Mr. J. K. Chander |
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Designation : |
General Manager |
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Name : |
Mr. T. K. Krishnan |
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Designation : |
General Manager |
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Name : |
Mr. B. P. Chakraborty |
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Designation : |
General Manager |
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Name : |
Mr. T. V. Lakshminarayanan |
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Designation : |
General Manager |
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Name : |
Dr. S. C. Mehta |
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Designation : |
General Manager |
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Name : |
Mr. R. P. Bansal |
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Designation : |
General Manager |
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Name : |
Mr. M. T. UDeshi |
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Designation : |
General Manager |
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Name : |
Mr. S. S. Kelkar |
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Designation : |
General Manager |
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Name : |
Mr. M. M. Gadgil |
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Designation : |
General Manager |
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Name : |
Mr. D. K. Govil |
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Designation : |
General Manager |
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Name : |
Mr. Manubhai Parekh |
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Designation : |
General Manager |
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Name : |
Mr. N. L. Khurana |
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Designation : |
General Manager |
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Name : |
Mr. S. P. Agarwal |
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Designation : |
General Manager |
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Name : |
Mr. R. K. Bhalla |
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Designation : |
General Manager |
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Name : |
Mr. S. K. Bansal |
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Designation : |
General Manager |
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Name : |
Mr. V. S. Hegde |
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Designation : |
General Manager |
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Name : |
Mr. G. G. Joshi |
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Designation : |
General Manager |
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Name : |
Mr. P. S. Joshi |
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Designation : |
General Manager |
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Name : |
Mr. M. P. Ranade |
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Designation : |
General Manager |
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Name : |
Mr. N. K. Kapoor |
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Designation : |
General Manager |
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Name : |
Mr. Asit Pal |
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Designation : |
General Manager |
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Name : |
Mr. A. R. Sugumaran |
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Designation : |
General Manager |
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Name : |
Mr. S. P. Garg |
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Designation : |
General Manager |
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Name : |
Mr. Cyril Patro |
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Designation : |
General Manager |
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Name : |
Mr. Prakash Jain |
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Designation : |
General Manager |
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Name : |
Mr. R. K. Velu |
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Designation : |
General Manager |
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Name : |
Mr. P. V. Desai |
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Designation : |
General Manager |
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Name : |
Mr. N. R. Badrinarayan |
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Designation : |
General Manager |
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Name : |
Mr. B. Krishna Kumar |
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Designation : |
General Manager |
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Name : |
Mr. P. L. Kagalwala |
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Designation : |
General Manager |
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Name : |
Mr. D. Sarkar |
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Designation : |
General Manager |
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Name : |
Mr. S. C. Kalia |
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Designation : |
General Manager |
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Name : |
Mr. V. K. Vig |
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Designation : |
General Manager |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 31.03.2008
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) SHAREHOLDING OF PROMOTER AND PROMOTER GROUP |
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(1) INDIAN |
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Individuals/ Hindu Undivided Family |
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Central Government/State Government(s) |
196000000 |
53.81 |
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Sub Total (A) (1) |
196000000 |
53.81 |
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(B) PUBLIC SHAREHOLDING |
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(1) INSTITUTIONS |
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Mutual Funds / UTI |
41888812 |
11.50 |
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Financial Institutions / Banks |
1205346 |
0.33 |
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Insurance Companies |
22615849 |
6.21 |
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Foreign Institutional Investors |
72028389 |
19.77 |
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Sub Total (B) (1) |
137738396 |
37.81 |
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(2) NON-INSTITUTIONS |
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Bodies Corporate |
4442632 |
1.22 |
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Individuals |
22806854 |
6.26 |
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Individuals holding nominal share capital in excess of Rs. 0.100
Million |
796025 |
0.22 |
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Non Resident Indians |
2276835 |
0.63 |
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Overseas Corporate Bodies |
26200 |
0.01 |
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Trusts |
22104 |
0.01 |
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Clearing Members |
157354 |
0.04 |
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Sub Total (B) (2) |
30528004 |
8.38 |
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Total Public Shareholding B = (B) (1) + (B) (2) |
168266400 |
46.19 |
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Total (A) + (B) |
364266400 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Banking Activities |
GENERAL INFORMATION
|
No. of Employees : |
38774 |
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Bankers : |
Ř State Bank of India, Madame Cama Road, Mumbai - 400 021 Ř Reserve Bank of India |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Ř B. C. Jain & Company Chartered Accountants Ř K. C. Khanna & Company Chartered Accountants Ř R. K. Khanna & Company Chartered Accountants Ř S. S. Kothari & Associates Chartered Accountants Ř Shah Gupta & Company Chartered Accountants Ř Kalyanwalla and Mistry Chartered Accountants |
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Associates/Subsidiaries : |
v Indo Zambia Bank Limited, Zambia v Raebareli Kshetriya Gramin Bank v Sultanpur Kshetriya Gramin Bank v Allahabad Kshetriya Gramin Bank v Kanpur Kshetriya Gramin Bank v Pratapgarh Kshetriya Gramin Bank v Fatehpur Kshetriya Gramin Bank v Faizabad Kshetriya Gramin Bank v Bareilly Kshetriya Gramin Bank v Shahjahanpur Kshetriya Gramin Bank v Nainital Almora Kshetriya Gramin Bank v Marudhar Kshetriya Gramin Bank v Aravali Kshetriya Gramin Bank v Bundi Chittorgarh Kshetriya Gramin Bank v Bhilwara Ajmer Kshetriya Gramin Bank v Dungarpur Banswara Kshetriya Gramin Bank |
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in
india
v Nainital Bank Limited v BOB Housing Finance Limited v BOB Asset Management Company Limited v BOB Capital Markets Limited v BOB Cards Limited overseas
v Bank of Baroda (Kenya) Limited v Bank of (Uganda) Limited v BOB International Finance Limited, Hong Kong v Bank of Baroda (Guyana) Inc. Bank of Baroda (Botswana) Limited BOB (UK) Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
1500,000,000 |
Equity Share |
Rs.10/- each |
Rs. 15000.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
365,530,000 |
Equity Share |
Rs.10/- each
|
Rs. 3655.300 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
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|
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Capital |
3655.300
|
3655.300 |
2945.300 |
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Reserves and Surplus |
82844.100
|
74789.100 |
53332.300 |
|
Deposits |
1249159.800
|
936619.900 |
813334.600 |
|
Borrowings |
11425.600
|
48022.000 |
16408.300 |
|
Other Liabilities |
84377.000
|
70839.000 |
60621.800 |
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Total |
1431461.800 |
1133925.300 |
946642.300 |
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Cash & Balance with RBI |
64135.200
|
33334.300 |
27123.200 |
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Balances with Banks & Money at Call & Short Notice |
118668.500
|
101212.100 |
65418.800 |
|
Investments |
349436.300
|
3511142.200 |
370744.400 |
|
Advances |
836208.700
|
599117.800 |
434003.800 |
|
Fixed Assets |
10888.100
|
9207.300 |
8608.000 |
|
Other Assets |
52125.000
|
39911.600 |
40744.100 |
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Total |
1431461.800 |
1133925.300 |
94664.300 |
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Interest Earned |
92126.400 |
71000.000 |
64314.200 |
|
Other Income |
14340.300 |
12903.300 |
13443.900 |
|
Total Income |
106466.700 |
83903.300 |
77758.100 |
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Interest Expended |
54265.600 |
38750.900 |
34521.500 |
|
Operating Expenses |
27970.400 |
24828.600 |
20108.100 |
|
Provisions & Contingencies |
13966.100 |
12054.200 |
163600.100 |
|
Total |
96202.100 |
75633.700 |
70989.700 |
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|
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|
Net profit for the Year |
10264.600 |
8269.600 |
6768.400 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Credit Deposit Ratio |
65.67 |
59.04
|
51.20 |
|
Investment Deposit Ratio |
32.05 |
41.25
|
48.67 |
|
Cash Deposit Ratio |
4.46 |
3.45
|
3.74 |
|
Interest Expended / Interest Earned |
58.90 |
54.58
|
53.68 |
|
Other Income / Total Income |
13.47 |
15.38
|
17.29 |
|
Operating Expense / Total Income |
26.27 |
29.59
|
25.86 |
|
Interest Income / Total Funds |
7.18 |
6.83
|
7.16 |
|
Interest Expended / Total Funds |
4.23 |
3.73
|
3.84 |
|
Net Interest Income / Total Funds |
2.95 |
3.10
|
3.31 |
|
Non Interest Income / Total Funds |
1.12 |
1.24
|
1.50 |
|
Operating Expense / Total Income |
2.18 |
2.39
|
2.24 |
|
Profit Before Provision / Total Funds |
1.89 |
1.95
|
2.57 |
|
Net Profit / Total Funds |
0.80 |
0.79
|
0.75 |
|
Return On Net Worth (%) |
12.45 |
12.28
|
12.58 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject was Incorporated in 1908 in the small town of Baroda by the
visionary Maharaja, Sir Sayajirao Gaekwad III. Alone with other banks BOB was
nationalised in 1969. The first branch of the Bank was opened in the city of
Ahmedabad in 1910 while that in the city of Bombay in 1919.
The bank is recognized as one of the largest providers of credit to domestic
industries with a well diversified credit portfolio. It has also been at the forefront
of providing trade related products such as export credit to Indian exporters.
It provides lending, banking, financing rehabilitation, treasury and investment
management services to consumers and to industries. It was the first to venture
overseas.
BOB entered the capital market with its maiden public offer of 100 Millions
equity shares of Rs 10 each at a premium of Rs 75 per share aggregating to Rs
8500 Millions in end 1996. The offer is being made to augement the net worth of
the bank and in the process take care of future capital adequacy
requirements.
Banks has taken various intitatives in information technology, it has launched
OmniBoB providing banking services through Phone and over PC. The OmniBoB suite
inculdes AnyBoB (Any Branch Banking), DialBoB (Centralised telebanking Service)
and ConnectBoB (PC Banking Service). Bank plans to march ahead in the
E-Millennium with renewed focus on the triad of 'Technology, People &
Customer'. Its thrust for the future will be on Insurance, E-broking and Retail
Banking.
Further with a view to improve the operational efficiency, the bank has
appointed Gartner Group as Consultants who will be looking into the bank's
business as well as its IT strategy. International Debit Card project was
luanched in 2002-03, in affiliation with VISA. The project envisages
insatllation of 500 ATMs in the next financial year. Effective from 19th
June,2002 the Benares State Bank was integrated with the Bank.
The bank has signed an MOU with National Insurance Company Limited for selling
their non- life insurance products under Corporate Agency Arrangement. The Bank
has introduced five retail lending products they are Baroda Home Improvement
loan, Baroda festival Loan, Baroda Professional Loan, Baroda Eco-friendly Gas
Kit Loan, Loan to individual for subscribing to Public Issues of PSUs/Blue
Chips companies, Advances against Future Rent Receivables and Baroda Loan for
Executive Development.
In the year 2004-05 the bank has expanded its interconnected ATM network to cross
501, spread over 180 centres in the country. The bank has also introduced 8AM
to 8PM banking at 101 branches and 24-Hour banking at 5 branches in the
country. Further the company has launched its new logo 'The Baroda Sun' in June
2005. The bank will roll out 125 branches in 2005-06 and over 600 branches in
the next year.
During 2004-05 the bank has merged its 11 branches (1- metro, 3- Urban,3-
Semi-urban and 4- rural). Further the Bank has amalgamated South Gujarat Local
Area Bank Limited with itself with effect from 24th June 2004, which is having
7 branches and the bank has opened 12 new branches during the year.
The bank has commissioned global data centre during the year 2006 and
also given inter-connectivity for over 1300 branches in the country. Another
important initiative taken by the bank in the year 2006 was commissioning of
new ATMs. The bank has commissioned 464 new ATMs across the country taking the
tally to 634.
During 2006-07, as part of Branch Conslidation Exercise 22 branches were merged
with the Bank. The Bank opened 50 new branches during the year, while 3
Extension counters were upgraded into full-fledged branches, 5 Extension
Counters were closed. As at March 2006-07, the Bank has a network of 2732
branches.
The bank opened an offshore branch in Singapore and the Bank operations in Hong
Kong through its subsidiary with Restricted Bank License were upgraded into a
full service bank. Bank's 2 branches in Hongkong commenced full service banking
operations from April 2007.
The Bank has also got approval for opening branches/offices in Trinibad &
Tobago, Ghana, Australia, Bahrain in the near future. The Bank is planning to
upgrade/expand its existing network in countries like China, UK, Malayasia,
South Africa, Tanzania, Kenya and Botswana.
During the year under review, the bank also took a major initiative of unifying
and integrating the entire Gujarat Operations by merging the erstwhile Central
Gujarat and South Gujarat Zones with North Gujarat Zone to form a single entity
with Headquarters at Ahmedabad.
Financial Results
|
Sr. |
|
Particulars |
Quarter Ended |
Quarter Ended |
Year Ended |
Year Ended |
|
1 |
|
Interest Earned (a+b+c+d) |
33310.700 |
26209.400 |
118134.700 |
90040.900 |
|
|
a) |
Interest/discount on advances/bills |
23267.300 |
17904.800 |
84129.700 |
59373.600 |
|
|
b) |
Income on Investments |
768.600 |
6693.900 |
27372.900 |
25603.100 |
|
|
c) |
Interest on balances with RBI and other inter-bank funds
|
1742.700 |
1337.900 |
5536.600 |
4664.600 |
|
|
d) |
Others |
620.100 |
272.800 |
1095.500 |
399.600 |
|
2 |
|
Other income |
5546.300 |
4488.600 |
20510.400 |
13817.900 |
|
3 |
|
TOTAL INCOME (1+2) |
38857.000 |
30698.000 |
138645.100 |
103858.800 |
|
4 |
|
Interest expended |
23025.700 |
15674.100 |
79016.700 |
54265.600 |
|
5 |
|
Operating Expenses (a+b) |
7686.800 |
7584.000 |
29342.900 |
25443.100 |
|
|
a) |
Employees cost |
4211.500 |
4417.700 |
18037.600 |
16440.600 |
|
|
b) |
Other Operating expenses |
3475.300 |
3166.300 |
11305.300 |
9002.500 |
|
6 |
|
TOTAL EXPENDITURE (4+5) (Excluding Provisions and
Contingencies) (3-6) |
30712.500 |
23258.100 |
108359.600 |
79708.700 |
|
7 |
|
OPERATING PROFIT (Profit before Provisions &
Contingencies) (3-6) |
8144.500 |
7439.900 |
30285.500 |
24150.100 |
|
8 |
|
Provisions (other than tax) & Contingencies |
4249.500 |
3117.500 |
8214.000 |
7607.500 |
|
9 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
10 |
|
Profit (+)/Loss (-) from Ordinary Activities before tax
(7-8-9) |
3895.000 |
4322.400 |
22071.500 |
18542.600 |
|
11 |
|
Tax expenses |
1130.600 |
1865.800 |
7716.300 |
6277.900 |
|
12 |
|
Net Profit (+) / Loss (-) from Ordinary Activities after
tax (10-11) |
2764.400 |
2456.600 |
14355.200 |
10264.700 |
|
13 |
|
Extraordinary items (net of tax expenses) ) |
0.000 |
0.000 |
0.000 |
0.000 |
|
14 |
|
Net Profit (+) / Loss (-) for the period (12-13) |
2764.400 |
2456.600 |
14355.200 |
10264.700 |
|
15 |
|
Paid-up equity share capital (Face Value of Rs.10 each) |
3655.300 |
3655.300 |
3655.300 |
3655.300 |
|
16 |
|
Reserve excluding Revaluation Reserve (as per balance
sheet of previous accounting year) |
91614.400 |
80705.500 |
91614.400 |
80705.500 |
|
17 |
|
Analytical Ratios |
|
|
|
|
|
|
i) |
Percentage of Shares held by Government of India |
5.381 |
5.381 |
5.381 |
5.381 |
|
|
ii) |
Capital Adequacy Ratio {%) |
|
|
|
|
|
|
a) |
As per Basel - I |
1.291 |
1.180 |
1.291 |
1.180 |
|
|
b) |
As per Basel - II |
1.294 |
-- |
1.294 |
-- |
|
|
iii |
Earning Per Share |
|
|
|
|
|
|
|
Basic and diluted EPS before and after Extraordinary
items, net of tax expenses (not annualized) [ in Rs.] |
0.759 |
0.674 |
3.941 |
2.818 |
|
|
iv |
NPA Ratios |
|
|
|
|
|
|
a. |
Gross NPA |
19813.800 |
20921.400 |
19813.800 |
20921.400 |
|
|
|
Net NPA |
4935.500 |
5016.700 |
4935.500 |
5016.700 |
|
|
b) |
% of Gross NPA |
0.184 |
0.247 |
0.184 |
0.247 |
|
|
|
% of Net NPA |
0.047 |
0.060 |
0.047 |
0.060 |
|
|
c) |
Return on Assets |
0.065 |
0.077 |
0.089 |
0.080 |
|
18 |
|
Public Shareholding |
|
|
|
|
|
|
|
Number of shares |
16826640.000 |
16826600.000 |
16826640.000 |
16826600.000 |
|
|
|
Percentage of shareholding |
461.900 |
461.900 |
461.900 |
461.900 |
Notes forming part of the financial results for the Quarter Ended 31.03.2008.
1. The above results have been taken on record by the Board at its
meeting held on 20-05-2008. The same has been subjected to audit by Statutory
Central Auditors, as per the Listing Agreements.
2. There has been no change in the Accounting Policies adopted during the
year ended 31.03.2008 as compared to those followed in the immediately
preceding financial year 2006-07, excepting accounting for dividend on shares of
subsidiaries, joint ventures and associate companies, which is now recognised
on realisation. There is no impact in the results for the current year due to
change in policy.
3. Reconciliation / balancing of debit and credit outstanding entries in
various heads of accounts, included in Inter Office Adjsutments, NOSTRO, Drafts
/ TTs payablle, Clearing Adjustments (including interse the Bank's Overseas
Branches and those Position Maintaining Offices in India), Dividend / Interest
/ Refund Orders Paid / Payable etc. is in progress.
4. The financial results for the Quarter/Year ended 31.03.08 have been
arrived at after considering provision for NPAs, Standard Assets and
depreciation/provision for Investments on the basis of prudential norms issued
by RBI. Provision for taxes (including Deferred tax, Wealth Tax and Fringe
Benefit tax) and contingencies including for have been considered on actuarial
basis. 5. A sum of Rs. 1802.000 millions has been charged to Profit and
Loss A/c on proportionate basis of the Transitional liability of Rs. 9010.000
millions upto 31.03.2007 as per the Revised Accounting Standard (AS) 15 on
Employee. Benefits issued by the Institute of Chartered Accountants of India
based on actuarial valuation. 6. During the year ended Mar-2008, Tier II
bonds amounting to Rs. 27036.200 millions were raised including Rs. 12036.200
millions (USD 300 mn) have been issued by way of Medium Term Notes.
7. In terms of RBI Guidelines, the bank has during the quarter ended June
2007 transferred a portion of Govt. Securities (SLR) kept in "Available
for Sale" category to "Held to Maturity" category and a
depreciation of Rs. 370.800 millions has been charged to the Profit and Loss
A/c.
8. The Bank has commenced operations at Hongkong w.e.f. 1st April 2007 by
taking over the business of subsidiary, Bank of Baroda (Hongkong) Limited. The
results shown above for the quarter / year ended 31.03.08 are inclusive of the
operations at Hongkong.
9. During the year 2 new overseas subsidiaries viz. Bank of Baroda
(Trinidad & Tobago) Ltd and Bank of Baroda, (Ghana) Limited were
operationalised.
10. Auditors qualifications for the year ended 31st March 2007 and for the
three quarter ended 30th June,30th Sep 2007 & 31st Dec.07 have been dealt
with in Note No.3 & 5 above.
11. As per RBI clarification dated 11th July 2007, Banks should reflect
the amortisation of premium on investments held under HTM category as a
deduction from Interest Income on investments instead of deduction from Other
Income. Accordingly, the bank has carried out the reclassification. This change
does not have any impact on the net profit for the periods under audit.
12. During the year the bank has revalued its fixed assets and an amount
of Rs. 13777.400 millions has been credited to Capital Reserves as revaluation
reserves.
13. The Board has recommended a dividend @ 80% on Equity Share Capital for
the year 2007-08 subject to approval by members.
14. Status of Investor's complaints :
i. Pending at the beginning of the quarter Nil
ii. Received during the quarter 59
iii. Disposed off during the quarter 59
iv. Pending at the close of the quarter Nil
15. The figures of previous period have been regrouped / rearranged, wherever necessary, to correspond to current period classification.
Accounting Standard 17 - Disclosure
under Segment Reporting
Part: Primary
A Segments
|
Sr. |
Business Segments |
Treasury |
Corporate / Wholesale Banking |
Retail Banking |
Other Banking Operations |
Total |
|
|
|
2007-08 |
2007-08 |
2007-08 |
2007-08 |
2007-08 |
|
1 |
Revenue |
35769.800 |
41565.900 |
39604.000 |
21705.400 |
138645.100 |
|
|
Result |
7887.900 |
1751.400 |
9373.700 |
14002.200 |
33015.200 |
|
|
Unallocated Expense |
|
|
|
|
10943.700 |
|
|
Operating Profit |
|
|
|
|
22071.500 |
|
|
Income taxes |
|
|
|
|
7716.300 |
|
|
Extra-ordinary Profit/loss |
|
|
|
|
-- |
|
|
Net Profit |
|
|
|
|
14355.200 |
|
|
Other Information |
|
|
|
|
|
|
2 |
Segment Assets |
569457.800 |
520618.200 |
324414.900 |
355726.000 |
1770216.900 |
|
|
Unallocated Assets |
|
|
|
|
25778.300 |
|
|
Total Assets |
|
|
|
|
1795995.200 |
|
3 |
Segment Liabilities |
534440.700 |
488604.400 |
304466.000 |
333851.800 |
1661362.900 |
|
|
Unallocated Liabilities |
|
|
|
|
134632.300 |
|
|
Total Liabilities |
|
|
|
|
1795995.200 |
Part Secondary
B: Segments
|
Sr. |
Particulars |
Domestic Operations |
International Operations |
Total |
Total |
||
|
|
|
2007-08 |
2006-07 |
2007-08 |
2006-07 |
2007-08 |
2006-07 |
|
|
Revenue |
118951.400 |
88689.200 |
19693.700 |
15169.600 |
138645.100 |
103858.800 |
|
|
Assets |
1425200.300 |
1150785.600 |
370794.900 |
280676.200 |
1795995.200 |
1431461.800 |
Notes on Segment Reporting:
1. As per guidelines of RBI on compliance with Accounting Standards, Bank has adopted "Treasury Operations" and "Other Banking Opertions" as Primary business segments and "Domestic" and "International" as secondary / geographic segments for the purpose of compliance with AS-17 on Segment Reporting issued by ICAI.
2. In determining the segment results, the funds transfer price mechanism followed by the the bank has been used.
3. Segment revenue represents revenue from external customers.
4. Capital employed for each segment has been allocated proportionate to the assets of the segment.
5. In view of adoption of revised segments, previous years figures have not been disclosed for primary segments as per RBI Guidelines.
CMD Shri M D Mallya seen along with the Executive Directors
Shri V Santhanaraman and Shri Satish C Gupta on the occassion of the
declaration of the Financial Results 2007-08.
• Net Profit up by
12.5% for Q4, 2007-08
• Net Profit up by
39.9% for year 2007-08
• Total Business up
by 24.1% for year 2007-08
• Total Advances up
by 27.6% for year 2007-08
• Total Deposits up
by 21.7% for year 2007-08
• Interest Earned on
Advances up by 29.95% for Q4, 2007-08
• Interest Earned on
Advances up by 41.7% for year 2007-08
• Net NPAs down to
0.47% at end-March, 2008
• Capital Adequacy
Ratio at 12.94% (Basel II) at end-March, 2008
• NIM at 2.90% for
year 2007-08
• Contribution of
International Operations to Total Business at 20.0% in 2007-08
Bank of Baroda has announced its audited results for the
fourth quarter of 2007-08 (Q4, 2007-08) and for the entire year 2007-08
(April-March), following the approval of its Board of Directors on May 20,
2008.
Bank of Baroda Financial Results
FY2007-08 and Q4: FY2007-08
May 20, 2008
Results at a Glance
|
Results for Q4, 2007-08 (January-March) |
Results for 2007-08 (April-March) |
|||||
|
|
Q4 2007-08 |
Q4 2006-07 |
% Change |
Apr-Mar 2007-08 |
Apr-Mar 2006-07 |
% Change |
|
Total Income |
388.570 |
306.980 |
26.58% |
1386.451 |
1038.588 |
33.49% |
|
Interest Income |
333.107 |
262.094 |
27.09% |
1181.347 |
900.409 |
31.20% |
|
Other Income |
55.463 |
44.886 |
23.56% |
205.104 |
138.179 |
48.43% |
|
Total Expenses |
307.125 |
232.581 |
32.05% |
1083.596 |
797.087 |
35.94% |
|
Interest Expenses |
230.257 |
156.741 |
46.90% |
790.167 |
542.656 |
45.61% |
|
Operating Expenses |
76.868 |
75.840 |
1.36% |
293.429 |
254.431 |
15.33% |
|
Operating Profit |
81.445 |
74.399 |
9.47% |
302.855 |
241.501 |
25.41% |
|
Total Provisions (including Tax prov.) |
53.801 |
49.833 |
7.96% |
159.303 |
138.854 |
14.73% |
|
Net Profit |
27.644 |
24.566 |
12.53% |
143.552 |
102.647 |
39.85% |
PROFIT
Operating Profit of the Bank at Rs.
30285.500 millions in 2007-08 was up 25.41% over the Operating Profit at Rs.
24150.100 millions in 2006-07. Operating
Profit for Q4, 2007-08 at Rs 8144.500 millions was up 9.47% over
the Operating Profit at Rs. 7439.900 millions for Q4, 2006-07. Net Profit of the Bank in
2007-08 was Rs. 14355.200 millions up 39.85% over the Net Profit of Rs.
10264.700 millions in 2006-07. Net
Profit for Q4, 2007-08 was up 12.53% at Rs. 2764.400 millions
over the Net Profit of Rs. 2456.600 millions for Q4, 2006-07.
INCOME
During 2007-08, Interest Income
was higher by Rs. 28093.800 millions (31.20%) at Rs. 118134.700
millions as against Rs. 90040.900 millions during 2006-07. Also, Interest Earned on Advances was
higher by 41.7% during 2007-08 reflecting the growing strength of the Bank’s
core operations. Despite a 50 bps reduction in its BPLR in Q4, FY08 the Bank
witnessed a growth of 29.95% in its Interest
Income from Advances during this quarter. The Bank’s Total Income was also up by
33.49% to Rs. 138645.100 millions in 2007-08 from Rs. 103858.800 millions in
2006-07. While the Bank’s treasury
earnings stood at Rs. 5322.000 millions, the recoveries from PWO accounts stood
at a healthy Rs. 3633.300 millions in 2007-08.
NET INTEREST INCOME
Net Interest Income for the Bank has
grown to Rs. 39118.000 millions in 2007-08 from Rs. 35775.300 millions in
2006-07 registering a rise of 9.34%.
MANAGEMENT
DISCUSSION AND ANALYSIS:
Economic Environment:
Indian economy has been on a high growth trajectory. It is
now the fastest growing economy in the world, next only to China. The India
Growth Story continues to hog the headlines around the world.
The Economic Survey forecasts the GDP growth in FY-07 at
around 9.2%. Industrial sector is expected to grow by a robust 10% mark. The
good thing is that the manufacturing sector is poised to grow in double digit
by 11.3%. Services sector is also estimated to grow in double digit by 11.2%.
Within this, financial, real estate and business services are gearing up for an
estimated growth of 11.1%. However, the growth in agriculture and allied
activities - expected to be at just 2.7% - is a matter of concern. This slow
growth has endangered stability in consumer prices and resultantly, northward
movement in inflation.
During 2006-07, the Indian Capital market scaled newer
heights. Three 1,000-point milestones were scaled by the SENSEX- 12,000 on
April 20, 13,000 on October 30 and 14,000 on December 5 - during the year. The
30-share benchmark BSE index ended 2006-07 with a growth of 15.9%. Indian
corporates raised Rs.1938230 Millions in 2006-07 through debt – 88% over the
amount raised last year. Over 65% of the debt - Rs.1249230 Millions - was
raised from overseas markets through bonds, foreign currency convertible bonds
and syndicated loans.
The Foreign Direct Investment (FDI) target of USD 12 billion
for 2006-07 was breached in the first week of February itself and by March
2007, it touched USD 15 billion. And if the reinvested earnings were taken into
account, the total FDI in 2006-07 would touch USD 18 billion as against USD 7.5
billion in the previous year. In terms of direct investment, the current
financial year has been a landmark, as FDI inflows for the first time overtook
FII inflows, indicating robust confidence in India.
The domestic Foreign Exchange Reserves (FER) almost touched USD 200 billion (or
precisely USD 199.179 billion) on March 30. In a record accumulation, the
country’s FER has gone up by almost USD 50 billion in 2006-07 as compared to
mere USD 10.41 billion in 2005-06. The Indian Rupee, which has been
consistently gaining against the US$, closed at an 8-year high of 42.92 on 5th
of April. It has gained about 9.5% since reaching a three-year low in July last
year.
At this juncture, macro fundamentals of the country’s economy
are strong and India continues to be a favoured investment destination. Besides
IT sector, in which the country has gained global reputation, India is fast
becoming a favourite destination for biotechnology, nano technology and as a
manufacturing hub.
India’s Services sector continues to grow, with knowledge
economy contributing a lion’s share to this sector. The country’ status as an
emerging economic and knowledge superpower is hitting the headlines around the
world. India’s vision to be part of the league of developed economies by 2020
is increasingly becoming realizable.
Banking Sector: Key
Developments, Opportunities & Challenges:
The Indian financial system is proving to be more than
resilient in coping with the vagaries of liberalization and globalization. The
Indian banking system has been showing a steady growth of around 15%.
Expansionary phase of the Indian economy has brought in its wake unprecedented
spurt in bank credit - around 30% last year. In tandem with such large credit
growth, banks have been experiencing pressure on their resources. The northward
direction in the movement of interest rates has begun to strain the banking
sector’s bottom-line. Banks have also been struggling to cope with the
asset-liability mismatches. One relief granted by RBI is to allow banks to
raise infrastructure bonds to balance their long term infrastructure financing.
Given the current upturn in the industrial cycle, the asset
quality is improving. This is getting reflected in the declining gross and net
NPA levels of many banks. Apart from corporate credit, retail credit has gained
good momentum in the last 3-4 years. According to one estimate, India’s retail
banking business is set to grow at over 15% in the next five years. Prospects
for FY-08 are good despite continuous hardening of interest rates on retail
loans.
However, some leading indicators point out early signs of overheating. Although
RBI feels that these signs of overheating are transient, its concern largely
centres around high credit growth in the realty sector. Rising credit card and
personal loan default rates are also emerging as major areas of concern for the
regulator. The pace at which growth in credit has been outstripping the deposit
growth has led to growing fears of a credit crunch, sharply rising lending
rates and a hard landing for the Indian economy. These conditions have forced
the regulator in taking some tightening measures in the recent times. During
the whole fiscal year, it hiked the Cash Reserve Ratio (CRR) thrice and Report
Rate four times. These have helped in moderating the extent of overheating to
an extent. The growth rate of unproductive retail loans, especially loans for
commercial real estate, capital markets, etc. has come down significantly.
Responding to these changes in regulatory policies, banks are moving towards
productive sectors like Small & Medium Enterprises (SME), Farm Sector and
the productive segments of Retail Sector.
Barring these temporary glitches, the Indian banking sector
has grown stronger and competitive in the recent times. In the matter of
technology, Indian banks have taken steps forward for expanding the coverage of
branches under Centralized Core Banking Solution (CBS), besides widening the
network of alternate e-delivery channels like ATMs, Internet Banking, Phone
Banking, Mobile Banking, Call Centre, etc. A large variety of e-products and
services is being added by the day for facilitating convenience banking to the
customers. Banks have begun to place the customer at the very centre of their
strategies and transformation programmes, in their quest to become
customer-centric organizations.
Indian banking sector has moved steadily, though slowly,
towards consolidation in the form of mergers and alliances. Merger of United
Western Bank Limited with IDBI Bank Limited, Sangli Bank Limited with ICICI
Bank Limited and take over of some banks overseas by State Bank of India and
Bank of India are some recent examples. Strategic alliance among 3 public
sector banks for limited purposes such as sharing of ATM network, marketing of
each other’s products, collaboration in financing of projects, etc. is another
major event during the year, in the realm of cooperation and collaboration
among the banks to acquire size and improve their competitive strength. These
developments are a pointer towards the Indian banking sector gearing itself to
face the challenges of the post-2009 scenario, when competition from foreign
banks will intensify.
Regarding implementation of Basel-II standards, the banks,
especially smaller banks, are facing challenges. Higher capital provisioning
has started putting pressure on the profitability of the banks. Consolidation
of banks can be a remedy in diversifying the asset and liability portfolio of
the individual banks, as well as in creating banks with bigger asset base.
And for India to continue on its current growth trajectory,
continuation of further consolidation and competitiveness of the banking system
will be a critical issue. This will give vibrancy and strength to the industry,
which is essential to fund the needs of the growing economy. Today India’s
banking sector generates nearly 2.5% of GDP and employs 900,000 people. With
full reform, according to an estimate by McKinsey & Co., it could generate
up to 7.5% of GDP and employ 1,500,000 people, as well as boost investment and
growth throughout the economy. And looking at the present initiatives, the
banking system appears fully geared to achieve this potential.
Market Risk:
The overall responsibility for managing and monitoring the
market risk rests with the “Assets Liability Management Committee” (ALCO) of
the Bank. ALCO decides the size, composition, tenor of assets and liabilities.
It also decides domestic term deposit rates; bulk deposit rates and changes in
the Benchmark Prime Lending Rate (BPLR). ALCO also decides the Transfer Price
Mechanism. ALCO also reviews inflow and outflow of funds on a static and
dynamic basis at monthly intervals.
The primary responsibility of Asset Liability Management Cell
is to manage liquidity and interest rate risks. Liquidity risk is measured on a
continuous basis through “Structural Liquidity Gap” reports. Liquidity is also
estimated on a dynamic basis through the “Short-term Dynamic Liquidity”
reports. The ultimate objective is to maintain Optimum Liquidity and deploy all
surplus funds profitably. The “Gap Reports” have also helped the Bank in
matching short-term assets and short-term liabilities, medium term assets and
medium term liabilities within the tolerance limit set in the ALM Policy.
Further, it has also helped in identifying the size and tenor of assets and
liabilities to support liquidity position on a continual basis.
Operational Risk:
The Bank’s “Operational Risk Management Committee” provides
guidelines to identify and manage the Operational Risk. Operational Risk is
measured through tracking of the loss data. Subsequently, suitable remedial
measures are suggested to mitigate this risk.
Four critical Business Segments:
In order to be
able to transform into a “Multi-specialist Bank”, the Bank has redefined four
critical Business Segments – which are redefined by products and service needs
of distinct customer groups:
- Retail
- SME
- Wholesale
(Mid-corporate & Large corporate)
- Rural/Agri.
Businesses
Regrouping of
Customers:
Under the New Business Model, business – both on the liability and asset
sides – of each segment will be driven by a General Manager at Corporate
Centre. For this purpose, the existing customers will be regrouped along the 4
segments. The Annual Performance Budgeting Exercise will also be realigned
along the New Business Segments.
Regrouping of
Branches:
Branches would also be regrouped under the 4 business segments, broadly
on the following lines:
- Wholesale
Banking Segment will be migrated from different branches in the country
and housed and serviced in Corporate Financial Services Branches (CFS) at
different centres (existing + new).
- Other branches in metro/urban centres
will focus on Retail and/or SME Banking.
- Semi-urban
branches will also focus on Retail and/or SME Banking, depending on the
potential.
- Rural
branches will largely focus on Rural and Agri. Banking.
New Performance
Management System under implementation:
The New
Performance Management System is intended to help the Bank – across the organization
– move to business orientation from the present largely functional orientation.
It will also have to move from the present measurement based on geography and
outstanding balances in deposits and advances to a mix of business segments and
geography. In the next stage, the Bank will have to move towards measuring
performance by revenue and eventually by profit. Towards implementing the new
system, the Bank would also be taking steps to revamp and refine the MIS.
New Performance
Appraisal System under implementation:
The New Employee
Performance Appraisal System, under implementation on pilot basis, for about
3,000 top business leaders, is intended to remove the weaknesses of the present
system and progress towards evaluating performance of the employees by business
performance parameters, which are measurable and output-driven. Number of
performance metrics under the new system will be limited and focused. Monthly
average balances will be used for performance evaluation.
The overall
objective is to bring about better connect and synergy between the New
Performance Management and Performance Appraisal Systems, in order that the
Bank is enabled to raise the bar of its performance continually.
BUSINESS PERFORMANCE: Resource Mobilization:
The share of Bank’s
deposits to total resources was at 87.26% as of 31st March 2007. Total deposits
grew from Rs.936619.900 Millions to Rs.1249159.800 Millions, reflecting a
growth of 33.37% over the previous year. Of this, Savings Bank Deposits - an
important constituent of low cost deposits - grew by 16.26% - from
Rs.271604.400 Millions to Rs.315772.800 Millions. Share of low cost deposits
(Current & Savings) to Total Global Deposits was at 33.18% and to Domestic
Deposits was at 38.67%. The banking industry as a whole witnessed a movement
from low cost deposits to term deposits during the year, in view of sharp
increase in the term deposit rates.
Baroda Swarojgar Vikas Sansthan (BSVS):
The Bank added four more BSVS centers – Dungarpur, Banswara, Chittorgarh
and Amethi – which are an exclusive institution of the Bank for training the
youth and imparting them knowledge and skills required for taking up
self-employment ventures. Total number of such centres has gone up to 11 as at
end-March 2007 from 7 in March 2006. One of the centres - Ajmer in Rajasthan -
was set up to provide focused training to the women entrepreneurs and is manned
by the women employees of the Bank.
Treasury Operations:
The year 2006-07 was eventful [H] for financial markets. The year
witnessed a series of monetary measures taken by RBI. These included measures
relating to rising inflation, rising interest rates, volatile stock market,
appreciating rupee and tight liquidity. Together, these contributed to high
uncertainty in the financial markets.
The second half of 2006-07 witnessed a series of liquidity
tightening measures adopted by the RBI to bring price stability and to contain
inflation to the targeted level of 5 to 5.5%. RBI intervened thrice to raise
Cash Reserve Ratio from 5.00% to 6.50% in five steps, the last rise of 50 basis
points being announced on 30th March 2007. Repo rate was raised from 6.5% to
7.75% during the year, widening the corridor between Repo and Reverse Repo rate
from 100 basis points to 175 basis points. RBI also fixed a cap of Rs.30000
Millions on Reverse Repo transactions apart from other measures such as
increase in provision for standard assets and increasing the risk weightage on
credit to certain sensitive sectors. These measures resulted in tighter liquidity
position and Call Money rate reached a peak of 80%, though briefly, in March
2007.
The Bank was, however, active in the Money Market, earning
healthy income in the short-term operations, apart from exploiting arbitrage
opportunities that existed between different markets, for augmenting its
earnings.
The measures taken by RBI impacted the bond market quite adversely with yields
in the short end rising by 100 basis points. While the annualized yield on 1
year G-sec moved from 6.69% to 7.70%, the yield on 10 year G-sec moved from
7.54% to 8.13%. The corporate bond yields also moved up in tandem with the
G-sec yields, with the spread for “AAA” rated bonds over the one year G-sec
going up to 256 basis points. With a view to insulate itself from the adverse
effect of increasing interest rates in the Fixed Income portfolio, the Bank
shifted additional SLR Securities from “Available for Sale (AFS)” to “Held to
Maturity (HTM)” category in April 2006. This de-risking measure helped the Bank
avoid further depreciation on the securities so transferred.
The Equity Market too witnessed high volatility during the
year. The benchmark sensex, which was 11,280 on 31st March 2006, rose to 12,671
in May 2006 on the back of robust economic growth as reflected by GDP growth
and good corporate results. However, it nosedived to 8,799 points in June 2006
as a result of global meLimitedown. During the latter part of the year, the
market moved up quite sharply and reached a historic high of 14,723 points in
February 2007, but subsequently retracted to close at 13,072 points on 31st
March 2007. However, the Equity Desk of the Bank remained active and earned
reasonable income through prudent market operations.
In the foreign exchange market, Indian rupee appreciated by 3.04% against US
Dollar during the year. It moved from Rs. 44.45 per USD to Rs. 43.10 per USD
mainly on account of accelerated inflows of foreign capital. It oscillated
between a high of Rs. 47.00 and a low of Rs. 43.00 against US Dollar.
The Bank’s integrated Treasury continued to be a prominent market maker
in USD/Euro. The Bank’s Foreign Exchange Dealing Room took advantage of the
increasing foreign exchange volume triggered by steady foreign exchange inflows
and enhanced the volume of merchant transactions to earn good profit for the
Bank.
State-of-the-Art Dealing Room of the Bank at Mumbai handles
the entire gamut of foreign exchange transactions and derivative products. The
advanced technology environment is being leveraged by the Bank to offer a
variety of products to its clients by way of hedging instruments such as
Interest Rate Swaps, Currency Swaps and Options.
Through the Automated Dealing System, the Bank quotes auto generated real time
foreign exchange rates to its customers at all authorized branches in India,
thereby providing them the feel of the real time market. A new system to
provide live rates to the customers is also on the anvil.
As part of its business reengineering, the Bank is in the
process of implementing Global Treasury Solution across all locations in India
and abroad. When implemented, the Global Treasury will link the branches of the
Bank spread over major financial centers of the world and help the Bank in
better Global Risk Management and effective deployment of resources.
The Derivative market in India is picking up quite fast and
volumes are growing continuously, as corporates look for more and more
customized products to hedge their exposure in volatile currency and money
market environment. To cater to this requirement, the Bank has set up an active
derivatives desk at its Treasury Branch, which offers custom-made derivative
products to the clients.
The Market Risk Management plays a significant role in the
Bank’s Treasury Operations. A full-fledged Mid-office in Treasury Division
monitors and manages various exposures and limits fixed by the Board of
Directors on real time basis, using advanced technology. The Risk Management
Tool such as Value at Risk (VaR) is used to measure the Market risk on all
portfolios. Furthermore, the back testing of VaR number is conducted on daily
basis to confirm the veracity of the forecasted values. The Stress Testing of
all portfolios is also done to complement the VaR analysis.
Repositioning
of Gujarat Operations:
During the year, the Bank took a major initiative of unifying
and integrating the entire Gujarat Operations, by merging the 2 erstwhile
Central Gujarat and South Gujarat Zones with North Gujarat Zone, to form a
single entity, with headquarters at Ahmedabad. The objective was for the Bank
to emerge as a Primary Banker to the State of Gujarat. A 10-Point Agenda for
Gujarat Operations is now under implementation. This initiative has received
good response from the Govt. of Gujarat and has helped enhance the Bank’s image
and improve its business performance in the State.
ISO
Certification:
In its journey towards improving quality management, 616
branches and offices including 47 specialized branches were brought under ISO
certification.
These include Bank’s Staff College at Ahmedabad, all Training
Centres at different locations, Central Audit & Inspection Division, all
Zonal Inspection Centres, Inter-Branch Operations/HO Demand Drafts Departments,
Specialized Integrated Treasury Branch, Mumbai, International Division and
Credit Operations Division, BCC, Mumbai.
Gen-Next Branch:
To respond to the needs of the changing demographic profile
of the country, the Bank has been endeavoring to customize delivery channels
designed especially for Youth Segment. As part of these efforts, the Bank has
setup an innovative branch – “Gen-Next Branch” dedicated to youth and young IT
Professionals at Pune. Besides youth-specific products, the Branch will
function as a model for fusion of “Hi-tech and Hi-touch Banking”.
INTERNATIONAL
OPERATIONS:
True to the Bank’s strong presence in different geographies
and markets around the world and in line with the tagline, “India’s
International Bank”, to its logo, Bank’s international operations scaled a new
high in business and profit performance during the year.
The expansion of branch network - opening of an offshore
branch in Singapore, identification of new expansion opportunities around the
globe, stress on increasing local business, active participation in overseas
loan syndication, arranging of funds, assisting Indian corporates in accessing
External Commercial Borrowings (ECB) and funding their requirements for
Acquisition Finance, aggressive marketing campaigns and technology upgradation,
were some of the landmark developments during the year.
Future Plans:
- In all, 1,919 domestic branches and 55
overseas branches will be brought on the CBS platform by March 2008.
- Many value added services are would be
made available both on the Internet banking channel and the ATM channel.
This will include utility bills payments, rail/air bookings, etc.
- To automate and centralize Bank’s
internal functions, various other solutions like HRMS, Pay Roll, Mail
& Messaging, e-Learning, etc. would be implemented.
- All the Forex Dealing Rooms of the Bank
will be integrated through a Global Treasury System during the year.
- A robust Credit Risk Management System
enabled to meet Basel-II norms, now on pilot, will made fully operational
during the year.
- To help branches to focus totally on sales
and service, a concept of Back Office Processing Centers has been evolved.
15 Service branches of the Bank in India are now functioning as City Back
Offices (CBOs), handling entire clearing functions. 5 Regional Back
Offices (RBOs) will be set up during the year to handle other back office
activities.
Web Details Attached
:
It has been a long and eventful journey of
almost a century across 21 countries. Starting in 1908 from a small building in
Baroda to its new hi-rise and hi-tech Baroda Corporate Centre in Mumbai, 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.
Mission statement
To be a top ranking National Bank of International Standards committed to
augmenting stake holders' value through concern, care and competence.
It’s new logo is a unique representation of a universal symbol. It
comprises dual ‘B’ letterforms that hold the rays of the rising sun. The
Bank call this the Baroda Sun.
The sun is an excellent representation of what the 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, The Bank seek
to be the source that will help all the stakeholders realise their goals. To
their customers, The Bank seek to be a one-stop, reliable partner who
will help them address different financial needs. To their employees, The bank offer rewarding careers and to the investors
and business partners, 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.
The bank also recognize that their bank is characterized by diversity. It’s
network of branches spans geographical and cultural boundaries and rural-urban divides.
It’s 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.
It’s new corporate brand identity is
much more than a cosmetic change. It is a signal that The bank recognize and
are prepared for new business paradigms in a globalised world. At the same
time, The bank 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, The
bank hope to communicate both.
Press Release
(a) Agriculture
• The June-Sept monsoon, which
hit Kerala on May 31st one day before schedule has progressed to
most states ahead of the normal date. The weighted average rainfall in the
country during June 1 to 11 was 53.9 mm, 30.0% above the normal rainfall of
41.4 for the period. It was normal to excess in 30 of the 36 meteorological
subdivisions
• The monsoon has so far covered Kerala, Tamil Nadu, Karnataka, Andhra
Pradesh, Orissa, W. Bengal, Maharashtra, Jharkhand, Bihar, Chhattisgarh &
Northeastern States, and parts of Gujarat, Madhya Pradesh, & Uttar Pradesh.
(b) Industrial growth (Y-o-Y) at 7.0% in April versus
3.9% in March
• India’s industrial growth improved to 7.0% in Apr’08 (as against that
in Mar’08) on account of relatively better growth in manufacturing (7.5%) and
mining (8.6%) output.
• In terms of the use-based categories, the capital and consumption
goods’ output grew (y-o-y) by 14.2% and 8.9% respectively.
• However, the overall signs of slowdown are quite visible as last year
around this time the industrial production growth was 11.3%.
• The key risks to industrial growth in FY09 are -- the upward pressures
on interest rates, rising input costs and a slowdown in external demand.
(c) RBI upped Repo Rate from 7.75% to 8.0% on June 11
• The RBI hiked its Repo Rate by 25 bps (from 7.75% to 8.0%) on June 11
in response to rising inflationary concerns. This was a kind of pre-emptive
move as the recent hikes in petrol/diesel prices would get reflected in
inflation figures for week ending June 7 and onwards.
• They also feel that a hike in Repo Rate would make rupee-denominated
assets more attractive and help India attract more of foreign debt inflows and
to some extent arrest a sharp depreciation in the value of rupee.
• The Repo Rate hike will be effective in controlling inflation only if
banks transmit the interest rate signal to lending rates and support the
tightening process.
(d) Inflation inching towards a double-digit level
• India’s annual inflation (WPI) rate rose to a seven-year high of 8.75%
in the week ended May 31 from 8.24% in the previous week on account of much
higher prices of food articles, vegetables, fibres, oil seeds, edibles oils,
cotton yarn, textiles, etc.
• They expect inflation to top 9.5% next week (when the data will
reflect higher prices of petrol/diesel) and cross 10.0% shortly after that.
• A widening gap between the RBI’s desired target and the actual
inflation indicates a more aggressive monetary tightening ahead. Going forward,
they expect the RBI to use a combination of CRR & Repo Rate hikes to
control inflationary pressures. The M3 expansion (y-o-y) as on May 31 is as
high as 22.5% (against 19.8% last year).
(e) Gilts- severe bearish mood to continue
• The yield on 10-year benchmark GOI paper ended
at 8.38% on June 13 as against 8.23% a week ago – reflecting a rise of 15 bps
in a week’s time.
• Bond prices tumbled by around 40 paise on both June 12 & 13 on
account of rising concerns over inflation. The latest inflation numbers do not
even factor in the domestic fuel price hikes. The market participants are
expecting a further tightening action from the RBI soon.
• Other pressure point is the likely outflow on account of advance tax
payment to the tune of Rs. 200000.000 millions to Rs. 250000.000 millions
shortly.
• In the short term, traders expect the 10-year yield to touch 8.45%,
while in the medium term it could even harden to 8.90%.
(f) Rupee – the second worst performing Asian currency
this year
• Rupee, the second-worst performer this year among Asia's 11
most-active currencies, declined for a second week by 0.66% to 42.94/$, as
losses in stock markets triggered fund outflows.
• The benchmark stock indices declined continuously for four weeks (the longest
losing streak since February) on concerns over rising inflation and growth
moderation.
• They feel that the recent Repo Rate hike and intermittent intervention
by the RBI in the forex market would stabilize the value of rupee around
42.50/$ in the next one month.
(g) Outlook of cautious optimism for stocks
• Surging oil prices, poor U.S. employment data & worries about
consumer spending, rising domestic inflation and the RBI’s monetary action
weighed heavily on stock sentiment last week and resulted in the Sensex losing
2.5% and the Nifty shedding 2.4%.
• On the institutional front, the mutual funds emerged as net seller to
the tune of Rs 5000.000 millions, while the FIIs emerged as net sellers to the
tune of Rs. 35000.000 millions.
• Barring the BSE health care index, all sectoral indices witnessed a
sizeable decline last week. The BSE IT, FMCG and Bankex led the pack of losers.
• According to technical analysts, the outlook for markets next week is
that of cautious optimism as overseas cues will determine the immediate
outlook. The advice is to avoid aggressive trades in either direction for now.
(h) Market fundamentals do not justify the current oil
price level
• Top world oil exporter Saudi Arabia said on Friday (June 13) that
market fundamentals do not justify current level of oil prices near $135 per
barrel.
• Saudi Arabia is considering an increase in its output that could bring
it near to record levels of around 10 million barrels per day. This level would
be higher than the largest annual average of the country’s production in more
than two decades.
• Saudi Arabia wants the producer and consuming countries and concerned
parties to work together to counter a global issue that may have negative
effects on the world economy, particularly developing countries.
Subject has geared up its machinery to implement the Agricultural Debt Waiver and Debt Relief Scheme, 2008. Shri M.D.Mallya, Chairman and Managing Director of the Bank reviewed the progress in Rajasthan yesterday .
He visited few rural/semi urban branches of the bank to oversee the implementation of the scheme at the branches. He also gave loan waiver letters and disbursed fresh loans to some of the eligible borrowers on the spot in the branches.
While addressing the Media at Jaipur, Mr. Mallya told that the scheme will provide benefit by way of debt waiver and debt relief to approx. Rs. 0.563 million farmers through Banks 1917 rural, semi-urban and urban branches in the country. Around Rs. 0.447 million marginal and small farmers will get the relief of around Rs.10000.000 millions and Rs. 0.116 million other farmers are eligible for rebate of about Rs. 2000.000 millions by way of OTS.
He said that the waiver scheme will be implemented by 30th June, 2008. The lists of beneficiary farmers shall be displayed on the Notice Board of the Branches before June 30, 2008.
General Manager (Rural & Agri. Banking) of the Bank has been appointed as Nodal Officer to oversee the smooth implementation of the scheme. More than 300 executives of the Bank are actively working in the field to ensure the successful implementation of the scheme and to ensure correctness of the data. All Regional Heads have been appointed as grievances redressal officers for their Region.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l Anti-Money
Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
The market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
The Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs. 42.97 |
|
UK Pound |
1 |
Rs. 84.75 |
|
Euro |
1 |
Rs. 66.72 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
--- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, they have no basis upon which to
recommend credit dealings |
No Rating |
|