Bank of Baroda

A Story of Commitment, Consistency & Credibility

Abhishek Mittal - 304 Poonam Pandey - 335 Raj kumar 338 Ritika Rani - 345 Saikat Sarkar - 348 Sakshi Arora - 349 Honey - 371 Lakshay - 374 Siddharth - 379

DOMESTIC BRANCH NETWORK

No. of Domestic Branches
4000 3500 27 08 3000 2500 2000 1500 1000 500 0 Dec'06 Dec'07 Dec'08 Dec'09 Dec'10 Dec'11 3050 2827 2899 3691

3259

Regional Break-up of Domestic Branches as on 31st Dec, 2011 Metro 809 Urban 689 SemiUrban 957 Rural 1,236

Bank has added 983 branches in its Indian operations during Dec06 to Dec11. With this, its domestic branches totaled 3,691 at end-Dec, 2011. During Apr-Dec, FY12, the Bank opened 327 new branches. Bank still has 383 licences left with it to open branches during FY12. Banks newly opened branches during Apr-Dec, FY12 are well diversified across the nation, though a large no. of branches were opened in UP & Uttaranchal; Gujarat; Southern Zones & Rajasthan. Around 59.4% of the Banks network at the end-Dec, FY12 was situated in rural & semi-urban areas.

CONCENTRATION (%): DOMESTIC BRANCH NETWORK [AS ON 31ST DEC, 2011]

Rest of India, 22.87

Gujarat, 21.02 Maharashtra, 11.84

UP & Uttaranchal, 22.21 South, 10.87 Rajasthan, 11.19

CAMEL MODEL

INTRODUCTION
Banking sector is one of the fastest growing sectors in India. Today's banking sector becoming more complex. Evaluating Indian banking sector is not an easy task. There are so many factors, which need to be taken care while differentiating good banks from bad ones. To evaluate the performance of banking sector we have chosen the CAMEL model which measures the performance of banks from each of the important parameter like Capital Adequacy, Assets Quality, Management Efficiency, Earning Quality and Liquidity.

CAPITAL ADEQUACY
It is important for a bank to maintain depositors confidence and preventing the bank from going bankrupt. It reflects the overall financial condition of banks and also the ability of management to meet the need of additional capital. The following ratios measure capital adequacy :a) Capital Adequacy Ratio b) Debt Equity Ratio c) Advance to asset ratio d) Government Securities to total Investments

Capital Adequacy Ratio:-The capital adequacy ratio is developed to ensure that banks can absorb a reasonable level of losses occurred due to operational losses and determine the capacity of the bank in meeting the losses. As per the latest RBI norms, the banks should have a CAR of 12%. CAR= Tier I Capital + Tier II Capital Risk weighted Assets TIER 1 CAPITAL - (paid up capital + statutory reserves + disclosed free reserves) - (equity investments in subsidiary + intangible assets + current & b/f losses) TIER 2 CAPITAL -A)Undisclosed Reserves, B)General Loss reserves, C) hybrid(debt/equity) capital instruments and subordinated debts

THE MINIMUM CAR AS PER RBI NORMS IS 12% AT PRESENT. IN FACT BANK OF BARODA HAS ALWAYS SHOWN A HEALTHY & IMPROVED MARGIN OF OVER 12% WHICH IS STIPULATED BY RBI. IN THE YEAR 2009 CAR IS 12.88% BUT IN 2010 IS DECLINED BY.4%.THIS IS DUE TO RISE IN RISK WEIGHTED ASSETS.
31.03.2009 Capital Adequacy Ratio 12.88% 31.03.2010 12.84% 31.03.2011 13.02% 31.03.2012 12.95%

DEBT EQUITY RATIO

Debt-Equity ratio is arrived at by dividing Total borrowings and Deposits by Net Worth. Net Worth includes equity capital, preference capital, reserves and surplus less revaluation reserves and miscellaneous expenses not written off. Debt-Equity Ratio = Debt / Equity

As on 31/3/2007 DEBT 2,113,556,145 As on 31/3/2008 2,617,481,094 As on 31/3/2009 2,864,094,335 As on 31/03/2010 3,362,600,873 As on 31/03/2011 3,891,989,283

PARTICULARS

EQUITY
RATIO

386,494,929
5.47

455,068,711
5.75

500,173,019
5.73

563,578,548
5.97

744,319,564
5.23

Interpretation of the Debt Equity Ratio: Deposits form a major portion of liabilities for banks and are included in the debt component of the debt equity ratio. A debt equity ratio of 50 times is considered healthy for banks. Ratios of Bank of Baroda are below 50 times, which is much below the acceptable limit and, therefore, has scope to increase the debt component on their capital structure.

ADVANCES TO ASSETS
Total

Advances also includes receivables. The value Total Assets is excluding revaluation of all the assets. Advances to Assets = Total Advances / Total assets
PARTICULARS ADVANCES ASSETS RATIO As on 31/3/2007 914,974,465 56,209,726 16.28 As on 31/3/2008 As on 31/3/2009 As on 31/03/2010 As on 31/03/2011

1,120,389,619 1,421,177,106 1,667,592,117 2,181,947,347 74,232,950 15.09 81,579,900 17.42 88,579,119 18.83 177,973,776 12.26

Interpretation of the Advances to Assets This ratio shows the total advances as a percentage of total assets, which can give the capital adequacy of the firm. It shows the ability of firm to meet capital need. Here, we see that Bank of Baroda has maintaining constant percentage of advances to assets for last 4 years but in this year 2006 2007 it has decrease by 1/3 almost.

G SECURITIES TO TOTAL INVESTMENTS

The ratio is calculated by dividing the amount invested in government securities by total investments. G -Securities to Total Investments = G-Securities / Total Investments X 100 Calculation of G Securities to Total Investments of Bank of Baroda:
PARTICULARS G Securities. INVESTMENTS RATIO As on 31/3/2007 447,050,000 532,117,500 84.01 As on 31/3/2008 659,110,500 718,785,000 91.70 As on 31/3/2009 As on 31/03/2010 As on 31/03/2011

1,081,788,000 1,325,595,500 1,172,980,500 1,086,462,500 1,337,770,000 1,200,149,970 99.57 99.09 97.74

INTERPRETATION OF THE G SECURITIES TO TOTAL INVESTMENTS:G Securities to investments indicate the percentage of risk free investments in banks investment portfolio. Since government securities are risk free, the higher the G Securities to investments ratio the lower the risk involved in bank investments. The calculation indicates that Bank of Baroda has shown a stable rise in G Securities investments and therefore it has less risk involved in banks investments.

TOTAL ADVANCES TO TOTAL DEPOSITS

2012 Bank of Baroda 0.76 2011 0.75

The ratio measures the efficiency of management in converting the deposits available with the bank into high earning advances.

BUSINESS PER EMPLOYEE

09 Bank of Baroda 8.63 10 9.81 11 12.29 12 14.66

This tool measures the efficiency of all the employees of a bank in generating business for the bank.

PROFIT PER EMPLOYEE

Years Ratios 09 10 11 12

6.05

7.85

10.59

11.87

This ratio measures the efficiency of employees at the branch level. It also gives valuable inputs to assess the real strength of a banks branch network.

OPERATING PROFIT TO AVG. WORKING FUNDS

Years Ratios 09 10 11 12

2.22%

2.03%

2.22%

2.19%

This ratio indicates how much a bank can earn from its operations net of the operating expenses for every rupee spent on working funds.

INTEREST SPREAD
09 4.02 10 4.15 11 4.60 12 4.63

NET PROFIT TO AVG. ASSET

09 10 11 12

1.10%

1.21%

1.33%

1.24%

This ratio measures return on assets employed or the efficiency in utilization of assets. This ratio measures the return on assets employed. Higher ratio indicates better earning potential in the future.

INTEREST INCOME TO TOTAL INCOME

12 0.90 11 0.88 10 0.86

This ratio measures the income from lending operations as a percentage of the total income generated by the bank in a year.

NON INTEREST INCOME TO TOTAL INCOME

12 0.10 11 0.12 10 0.14

This measures the income from operations other than lending as a percentage of the total income.

LIQUIDITY RATIOS
Liquid Assets to Total assets Govt. Securities to total assets Liquid Assets to Total Deposits Liquid Assets to Demand Deposits Approved securities to total assets

LIQUID ASSETS TO TOTAL ASSETS

Liquid Assets include cash in hand, balance with the RBI, balance with other banks (both in India and abroad), and money at call and short notice. Liquid ratio (Cash with RBI + Cash for short notice liquid asset) Ratio = Liquid Asset/ Total Asset

2012 0.144 2011 0.139

INCREASE IN THIS RATIO SHOWS THAT COMPANY CAN PAY OF ITS SHORT TERM DEBT EASILY

GOVT. SECURITIES TO TOTAL ASSETS

Government securities are the most liquid and safe investment. This ratio measures the proportion of risk-free liquid assets invested in government securities as a percentage of the assets held by the bank and is arrived by dividing investment in government securities by the total assets. Ratio = Government Securities / Total Asset

2012 0.154 2011 0.165

INCREASE IN THIS RATIO SHOWS THAT COMPANY HAS TO FACE LESS RISK

LIQUID ASSETS TO DEMAND DEPOSITS

This ratio measures the ability of a bank to meet the demand from demand deposits in a particular year. It is arrived at by dividing the liquid assets by total demand deposits. The liquid assets include cash in hand, balance with the RBI, balance with other banks (both in India and abroad), and money at call and short notice. Ratio = Liquid Asset / Demand Deposit

2012 0.619 2011 0.570

LIQUID ASSETS TO TOTAL DEPOSITS

This ratio measures the liquidity available to the depositors of a bank. Liquid assets include cash in hand, balance with the RBI, balance with other banks (both in India and abroad), and money at call and short notice. Ratio = Liquid asset/Total deposit
2012 0.166 2011 0.214

APPROVED SECURITIES TO TOTAL

ASSETS

This is arrived at by dividing the total amount invested in approved securities by total assets. Approved securities are investments made in the state-associated bodies like electricity boards, housing boards, corporation bonds, share of regional rural banks. Ratio = Approved Securities / Total asset
2012 0.00036 2011 0.00149