For Office Use:

Grade

Communication for Managers

Group Assignment No. 1

“Company Report on Bank of Baroda”

Submitted by: -
Group No.: 37
1. Abhinav Kedia (201401)
2. Gunjan Karwa (201420)

3. Harsh Jain (201421)

4. Shruti Patil (201450)

5. Yogita Attal (201462)

Section: D

Batch: MBA-FT (2020-2022)

Institute of Management, Nirma University

Date of Submission: 23rd December 2020
 TABLE OF CONTENTS

Sr. No. Title Page No.

1. Executive Summary 2
2. Business Information 3-10
3. Organization Information 11-14
4. Financial Analysis 15-17
5. Inferences 18-19
6. Annexures 20-24
7. Exhibits 25
8. References 26
9. Undertaking 27

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 EXECUTIVE SUMMARY

The Indian Banking sector plays a very important role in the overall growth and development of the
economy. It contributes approximately 7.7% to the national GDP. The major public sector players in
the banking industry are State Bank of India, Punjab National Bank, and Bank of Baroda. Some major
private sector players are Kotak Mahindra Bank, ICICI Bank, HDFC Bank. The main services
provided by the banking sector are various kinds of loans, high-end savings, global trade services,
etc.

The profitability of the Bank of Baroda has reduced since the last five years and the bank has faced
huge losses in some of the years. The revenue of the Bank of Baroda has been increased by a larger
amount after the merger with Dena Bank and Vijaya Bank in the year 2019. However, the merger
effect is not reflected in the profits of the bank. The liquidity of the Bank of Baroda has improved but
certain per share ratios are not in good condition. Moreover, the bank is performing far below the
industry P/E.

The Bank of Baroda can take competitive advantage of merger for economies of scale and synergies
of network and can become the globally competitive bank by improving operational efficiency and
increasing market reach.

(Word Count: 207 words)

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 BUSINESS INFORMATION

Industry Overview

Indian Banking industry consists of a large number of banks, falling under six broad categories:
Public Sector Banks (PSB), Regional Rural Banks (RRB), Private Banks, Cooperative Banks Small
Finance Banks, and Payments Banks (Exhibit 1). Also, Foreign Banks operating in India. All these
banks are registered under the Companies Act, 2013, and licensed under Section 22 of the Banking
Regulation Act, 1949. All these banking institutions are regulated by the apex bank of the country,
Reserve Bank of India (RBI).

India has a widespread banking network, consisting of 12 PSBs, 21 Private Sector Banks, 56 RRBs,
a large number of Cooperative Banks, and 46 foreign banks operating in the country.

As large as the banking sector is in the country, it plays important roles and is the most vital sector
for the economy to function. It performs the role of mobilizing the deposits and credit disbursement
and thus plays an important role in the economic cycle providing finance to other sectors of the
country, which leads to production, and growth of the country’s economy.

The banking sector in India has spread and reached from metropolitans to remote areas, and has been
one of the reasons for India’s good growth process and still has numerous outstanding
accomplishments to its credit. Today, banking is one of the biggest service sectors in India. India is
the sixth-largest economy in the world and the banking sector contributes around 7.7% to the total
GDP of India.

Industry Size
Indian Banking Industry has 12 PSB, 21 Private Sector Banks, 46 foreign banks, and 56 RRBs under
Commercial Bank, 1485 Urban Cooperative Banks, 96,000 Rural Cooperative Banks, and
Cooperative Credit Institutions under Cooperative Bank. Also, there are 6 Payments Banks and 10
Small Finance Banks. With this huge number of banks and their many branches spread pan India,
banking is one of the biggest service sectors in India.
As of July 2020, India had 209,989 ATMs and by 2021 it is expected to increase to 407,000.
Across the Banking Sector, the total asset is around (including public, private sector, and foreign
banks) is US$ 2.27 trillion, out of which Public sector banks’ assets stood at US$ 1,038.76 billion in
the FY19.

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Industry Segments

The banking industry can be segmented on the bank’s major business into retail banking, wholesale
banking, and wealth management, also some banks have business in other than the above three
segments like treasury services or insurance. Banks may be into more than one of the business, like
most of the standard banks offer both wholesale banking services as well as retail banking services.

The segmentation of banks depends on their major source of revenue and the approximate breakdown
by business segment is as follows(Figure):

Advisory &
Underwriting
10%
Whole Sale 23%

Trading
13%

Non Interest
42%

Wealth Management
15%
Retail Management
62%

Net Interest
20%

Retail Banking: Retail banking, is also known as personal banking as it serves individual customers
and it may include small commercial clients as well. Retail banking is the largest earnings contributor
i.e., 62%. The main products provided by retail banks include deposits, mortgages, loans, and credit
cards.

Wholesale Banking: Wholesale banking is also known as Capital markets, they serve large clients
like corporates, other banks or financial institutions, government agencies, real estate developers, etc.
the services they sell includes - consulting, sales and trading, and mergers and acquisitions, currency
conversion, also corporate lending, etc.

Wealth Management: They provide retail brokerage services, asset management which involves
advising and investing on behalf of the clients. It is a quickly growing segment in banking.

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Geographic Spread

According to IMF data 2015, India has the highest number of bank branches in the world, over 1.2
lakh bank. And according to RBI data June 2016, India has over 1.3 lakh bank branches.

These branches are spread across the nation and are almost evenly distributed in rural and urban areas
(Figure).

Region Wise Distribution

34% 39%

27%

Urban and Metro Semi -Urban Rural

34.2% branches are in rural areas, 38.8% in urban and metropolitan regions and 27% in semi-urban
areas. While the nationalized banks and SBI have 30% of their branches in the rural regions, and 40%
in urban, the private banks have 80% of their branches only in semi-urban and urban areas and very
less in the rural. The spread remains even.

The even spread achieved is attributed to Financial Inclusion Plan, for banks to open branches in
unbanked areas. Also, the government has asked to open 15,00 branches in FY 2021 to meet the
financial inclusion agenda.

Major Players and Their Performance

India has a large number of banks, and with globalization and liberalization, further foreign banks
entered India. And with this large number of banks, there is strong competition in the sector of
monopolistic nature.

The major players and competitors in the banking sector are as follows:

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 HDFC Bank Limited

Tagline: “We understand your world”

USP: One of the big four banks in India.

HDFC (Housing Development Finance Corporation) is the largest bank of India with the highest
market capitalization of value Rs.6,25,666.08 crores (as of April 2019).

The bank is not only into Retail and wholesale banking, it is also into the treasury and offers a wide
range of products and services. It has 5,500 domestic branches (as of 30 June 2020) and has branches
overseas as well. In the year 2020, it also won Euro Money Award for being India's Best Bank.

 State Bank of India (SBI)

Tagline: “The Banker to Every Indian”

USP: State Bank of India is a bank which every Indian can trust.

SBI is state-owned bank with the market capitalization of Rs. 93,218.11 crores (as of April 2019)
making it the second-largest bank after HDFC bank, and also the largest public sector bank. It has the
highest number of overseas branches i.e., 52 among Indian banks. It has been awarded the bank with
‘Best Transaction’ by The Asian Banker. Also, in the year 2020, it ranked 221st in the Fortune Global
500 list of the world’s biggest corporations.

 Industrial Credit and Investment Corporation of India

(ICICI) Bank

Tagline: “Khayal Aapka”, “Hum hain na”

USP: The most efficient and tech-savvy bank in the Indian banking industry.

ICICI bank is one of the leading private sector banks in India, and is one of the Big Four Banks of
India with a market capitalization of Rs.3,59,977.03 crores (as of Dec 2020), having 5,275 branches
in India and has a presence across 17 countries.

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 Kotak Mahindra Bank Limited

Tagline: “Let’s make money simple”

USP: Professionalism in Banking.

Kotak Mahindra Bank is the second-largest Indian private sector bank by market capitalization of the
value Rs. 3,80,117.77 crores (as of Dec 14, 2020.) It offers products and financial services in retail
and wholesale banking, as well as provides wealth management.

 Axis Bank Limited

Tagline: “Aapka Solution”

USP: One of the largest private sector financers in Indian agriculture.

Axis bank is an Indian private sector bank, with a market capitalization of Rs.1,90,562.56 crores, its
business is into providing financial services to individuals as well as large and mid-size corporates,
along with Small Margin Enterprises and retail businesses.

 Punjab National Bank (PNB)

Tagline: “The name you can BANK upon”

USP: One of the Big Four banks of India.

PNB is a government-owned, Indian public sector bank with a market capitalization of Rs. 37,411.52
crores. It is one of the Big four banks of India. Serves a vast customer base in rural as well as urban
areas in the nation, plus it has a decent overseas presence with various branches, joint venture, and
subsidiaries in many countries.

Products and Services offered in the Banking Industry

Banks offer a wide variety of products and services based on the bank’s business: retail banking,
wholesale banking, and wealth management, besides these the other products and services includes
treasury, risk management, depository, cards, etc.

The various products and services offered by the banking sector are as follows:

1. Deposit Accounts: There are the following types of accounts offered by banks:
a. Net Demand Accounts: Savings Account and Current Account
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 b. Time Liability Accounts: Fixed Deposit and Recurring Deposit
c. Flexi Accounts: which is a mix of savings and recurring deposit accounts, in which
after a certain limit set by the customer goes into recurrent deposit earning recurring
interest rate.
2. Demat Accounts: It is the accounts for trading in financial markets like stocks, bonds, etc.
3. Wealth Management Accounts: This includes accounts for customers to get their assets,
cash, etc. management to be advised by bank and managed on the customer’s behalf.

The above basic accounts are customized to serve different types of customers and their needs,
like Retirement accounts where one sets aside money for spending in retirement at the same time
to invest in stocks, also provides, similarly Family Wealth Account, etc.

4. Loans: various types of loans are offered by banks to serve corporate and personal needs:
a. Individual Loans: Various types of loan are provided to individual customers to meet
their different credit needs: Home Loans (loans for the purchase of home or plot, home
construction, and home renovation), Personal Loans (personal loans to individuals for
purposes like higher education, medical emergency, purchase of consumer durables
like television, refrigerator, etc.) Car Loans, Education Loans, Two-Wheeler Loans,
etc.
b. Cooperate and MSME loans: It includes various short-term and long-term loans, to
meet the daily expenses (operations), funding working capital, machinery upgrades,
etc., for initial funding, start-ups, etc.
c. Agricultural Loans: It includes various short-term and long term loans for the purchase
of inputs like seeds, pesticides, or machinery, etc. to agricultural firms like plantations,
crops, dairy, etc., and farmers.

5. Cards: Various types of cards like credit and debit cards, which can be used for cash
withdrawals, purchases at online and offline shopping outlets, etc. via ATMs (Automated
teller machines), online payment gateways, etc.

6. Fund Transfer Facilities: Funds are transferred via NEFT (National Electronic Fund
Transfer), Demand Draft (DD), Cheques, etc. Also, with internet banking, mobile banking
transfers, and payments by IMPS (Immediate Payment Service), etc.

7. Foreign Exchange Services: Banks offer facilities to customers for currency exchanges,
travellers cheques, travel card, etc. for their foreign exchange needs like travelling, etc.

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 8. Banking Services: Banks offer features like balance enquiry, customer care, etc. linked with
the customer’s bank accounts.
a. Balance Enquiry
b. Net Banking: Banks give their users facilities of net banking available 24/7.
c. Mobile Banking: Banks offer various facilities like fund transfer, balance enquiry,
account statement, etc. via mobile applications.
d. Mini Statement
e. Customer Care: Customer care services for its customers to enquire, loan information,
complaint, ATM blocking, etc. via call at customer care service, missed call service,
SMS, etc.

Recent Developments in Banking Industry

1. The bank approved a loan of Rs.2 trillion to 8.1 million accounts under the ECLGS for the
MSME sector that was impacted by Coronavirus. (Dec’2020)
2. Bank of Baroda (BoB) has launched a new employee-focused program called the Employee
Assistance Program, which aims to help employees deal with personal and professional issues
through psychological counselling and consulting. (Nov’2020)
3. HDFC Bank and Apollo Hospitals have come together to launch the ‘Healthy Life
Programme’, a holistic healthcare solution to make healthy living accessible and affordable
on Apollo’s digital platform. (Oct’2020)
4. Government to inject Rs. 20,000 crores in public sector banks in the current fiscal year to
meet regulatory requirements and they are part of the first batch of supplementary
requirements for 2020-21 proposed by the Finance Minister of Lok Sabha. (Sep’2020)
5. Banks from both the public and private sectors have approved loans of more than Rs. 1 lakh
crore under the ECLGS agreement; According to the plan, more than 30 lakh MSMEs and
other business units have been assisted. (Jun’2020)
6. The merger of United Bank of India and Oriental Bank of Commerce with Punjab National
Bank (PNB) has introduced a new mega player in the market which is the second-largest bank
after State Bank of India (SBI). (Apr’2020)
7. India’s largest lender i.e., State Bank of India, raised US$ 100 million in green bonds through
private placement. (Mar’2020)
8. The Department of Post launched the mobile banking facility for all post office savings
account holders of CBS (core banking solutions) post office. (Oct’2019)

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 9. Government e-Marketplace (GeM) signed a Memorandum of Understanding (MoU) with
Union Bank of India to facilitate a cashless, paperless, and transparent payment system for an
array of services. (Oct’2019)
10. The NPAs (Non-Performing Assets) of commercial banks recorded a recovery of Rs. 400,000
crores in the last four years including record recovery of Rs. 156,746 crores in FY19.

Recent Issues Faced by Banking Industry

1. Cultural Shift: Manual systems and processes cannot be used in the digital world. The
banking industry needs to find innovative solutions to the problems of the financial industry.
2. The financial industry faces threats to the most important areas of service. These threats force
many financial institutions to seek partnerships if this occurs. In order to maintain a
competitive advantage, credit cooperatives and traditional banks need to develop fundamental
measures to deal with the threats to their services.
3. Regulatory Compliance: If banks fail to comply with regulations, they face costly
consequences. They bear additional risks and costs, so they need to keep up with the latest
regulatory changes.
4. Client Retention: Competition for financial services clients has never been this fierce.
Although brand loyalty may not disappear, it definitely can sustain life.

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 ORGANIZATION INFORMATION

History
Bank of Baroda is an Indian Government-owned International Bank headquartered in Vadodara,
Gujarat. Its corporate office is located in Mumbai.
The bank was founded by Maharaja of Baroda, Maharaja Sayajirao Gaekwad III on 20th July 1908.
The bank along with the other 13 major commercial banks of India was nationalized on 19th July
1969 by the Government of India.
In 1953, Bank of Baroda opened its first international branches in Kenya and Uganda to serve the
Indian population living there. Over the time Bank of Baroda went through various mergers and
acquisitions and had increased its presence in India and Overseas.
On 17th September 2018, the Government of India proposed a merger between Vijaya Bank and
Dena Bank. The Merger was passed by both the Union Cabinet and the boards of the bank on 2nd
January 2019 and came into effect from 1st April 2019. The merger was the first-ever three-way
consolidation of banks in India. It resulted in the formation of the third-largest bank in India.
The bank has been investing in technology to enhance its customer service. Initiatives such as the
digitization of account opening through TAB Banking, the transformation of its mobile application,
the centralization of back-office operations, the establishment of the Analytics Center of Excellence
(ACoE), and the Baroda Kisan Platform for Farmers are efforts in this direction. It further extends its
digital focus by setting up a dedicated Digital Lending Department, which will exclusively cater to
digital on-boarding and credit processing for retail and MSME customers using internal and external
information sources and state-of-the-art machine learning and algorithms.

BANK OF BARODA
Parent Company Bank of Baroda
Category Banking Services
Sector Banking and Financial Services
Tagline/ Slogan India’s International Bank
Bank of Baroda is one of the best PSU Banks with service matching
USP
that of Private Banks.

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Organizational Structure
On September 2018, the government announced the merger of Vijaya Bank and Dena Bank with
Bank of Baroda, with effect from April 1, 2019. As of December 2020, all the branches of Vijaya
Bank and Dena Bank became Bank of Baroda branches and the merger has been successful. With this
merger Bank of Baroda revamped its organizational structure, aiming to help the merger to go with
ease and improving its overall efficiency in operations and control. Bank of Baroda has domestic as
well as international operations.

NAME POSITION
Hasmukh Adhia Chairman
Sanjiv Chadha Managing Director and CEO
Amit Agrawal Government Nominee Director
Ajay Kumar RBI Nominee Director
Ajay K Khurana Executive Director
Murali Ramaswami Executive Director
Shanti Lal Jain Executive Director
Vikramaditya Singh Khichi Executive Director
Bharatkumar D Dangar Shareholder Director
Soundara Kumar Shareholder Director
Srinivasan Sridhar Shareholder Director

Key Alliances
In a first three-way amalgamation, Vijaya Bank and Dena Bank were merged with Bank of Baroda
on April 1, 2019. Bank of Baroda is currently the third-largest public sector bank by market
capitalization and assets. The BoB has completed the integration of approximately 2128 Vijaya Bank
branches in September 2020 and approximately 1770 Dena Bank branches in December 2020.

Recent Technological Developments by Bank of Baroda

1. Baroda M-Invest: Bank of Baroda collaborated with Fisdom to launch the Baroda M-Invest
app for clients in the market. The app combines the latest technology and financial advice for
investing in mutual funds.

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 2. Collaborated with Razorpay payment gateway which aimed to revolutionize online payments
by providing clean, easy-to-use APL applications and worry-free integration.
3. Sound Based Payment: Bank of Baroda collaborated with ToneTag to use sound waves for
off-line proximity communication. The SDK app is integrated with Baroda Bank's M-Connect
Plus mobile banking app, allowing payments on ToneTag-enabled POS devices.
4. Bank of Baroda partners with Truecaller to provide UPI payment services for BHIM Baroda
Pay UPI app to users on its app through a secure API portal.
5. The bank has partnered with PineLabs to provide an affordable solution for bank debit
cardholders through a point-of-sale based EMI solution, a fintech loan solution based on digital
transactions linked to the point of sale to provide affordability for the merchant sector solution.
6. Education Loan: Cooperative arrangement with Gyandhan to obtain applications for
education-backed mortgage-backed housing loans to study abroad. Gyandhan offers financial
aid for further studies in India and abroad.
7. Housing Loan: Bank of Baroda has partnered with Switchme to target existing home loan
borrowers who wish to switch lenders to take advantage of lower interest rates.

Awards and Accolades

2013-14:
 BoB won the PSB Banking Technology Excellence Award 2013 by IDRBT.
 ‘Excellence in Home Loan Banking’ Award from My FM Stars of the Industry.

2014-15:
 In SME Forum of New Delhi, the bank was named as Best PSU for MSME.
 Bank of Baroda won the Skoch Order of Merit award in the Best Financial Inclusion and
Deepening Award 2014 in India by Skoch Consultancy Services.
 Bank ranked 21st amongst Best Indian Brands 2014 in Brand Equity by The Economic Times.

2015-16:
 Bank won the HR Excellence Award from Business World for ‘Best initiative for Engaging
Superannuated Employees’.
 Bank of Baroda was awarded the BML Munjal Award in recognition of “Excellent Enterprise
through Learning and Development-2015”.
 Bank of Baroda was awarded as First Runner Up in the "Best Financial Inclusion Initiative"
in the Large Banks category by IBA.

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2016-17:

 Bank ranked 21st amongst Best Indian Brands 2016 in Brand Equity by The Economic Times.

2017-18:

 The bank was awarded the ‘Excellent Factory Award’ from APY by the Pension Fund
Regulation and Development Agency (PFRDA) of the Government of India.
 Finnoviti Award for Financial Inclusion by Banking Frontiers.
 Winner Award in ‘Agricultural Banking’ by ASSOCHAM in Large Banks category in Annual
banking cum Social Banking Excellence Award of 2017.

2018-19:

 Award for ‘Best Banking and Financial Legal Team’ at the 8th Indian Legal Era Awards
2018-19”.
 Awarded as Best Performing Bank in Aadhar Excellence Awards 2018 by UIDAI.
 Received the ‘Leadership Capital and Outstanding Performance Award’ in the Atal Pension
Yojana Awards 2018-19.
 Rewarded as ‘Best Home Loan Products 2018’ at FE Best Banks Award 2018.
 Received awards for ‘Best PSU Bank under MSME’ and ‘Best Agricultural Bank’ in Divya
Bhaskar Eminence Awards 2018.

2019-20:
 Bank won the ‘National Award for SHG bank linkage 2018-19’ by DAY-NRLM,
Government at New Delhi.
 Received the award for ‘Governance Now’ in 4th India Banking Reforms Conclave and BFSI
Awards 2019.
 Bank won Silver at SAMMIE 2019 for Best Social Media Brand Award (BFSI - banking
category).
 Bank was awarded as the ‘Global - Lowest Gross Fraud (Issuer)’ from Visa in Global Service
Quality Awards 2018.
 Bank won the IPE award for ‘Best Practices in CSR Awards-2020’.
 Bank bagged the FINNOVITI 2020 Award for its sound-based payment system -
‘TONETAG’.

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 FINANCIAL ANALYSIS

Income/Revenue
From the profit and loss statement of Bank of Baroda (Annexure 1), we can see that the major source
of income for the bank is interest earned on the loans granted. The interest earned by the bank has
been increasing since the year 2018. Not only that, in the financial year 2019-20 the bank has
performed well and there has been a growth of 52.66 % in the interest earned. The major portion of
interest has been earned through discounting bills and advances (Annexure 4).

Particulars Mar 2020 Mar 2019 Mar 2018 Mar 2017 Mar 2016 Mar 2015
(₹). Cr (₹). Cr (₹). Cr (₹). Cr (₹). Cr (₹). Cr
Interest 75983.66 49770.61 43648.54 42199.93 44061.28 42963.56
Earned

Interest Earned
80000
70000 75983.66
60000
50000
40000 49770.61
43648.54 42199.93 44061.28 42963.56
30000
20000
10000
0
(₹). Cr (₹). Cr (₹). Cr (₹). Cr (₹). Cr (₹). Cr
Mar-20 Mar-19 Mar-18 Mar-17 Mar-16 Mar-15

Profit

In the financial year 2017-18, the Bank of Baroda reported a net loss of ₹2431.81 Cr (Annexure 1). There has
been negative provision for tax which means the expense has been turned into income. Therefore, the net loss
of the bank has reduced to some extent. This net loss can be due to the increase in the other expenses,
provisions, and contingencies. The bank reported a net profit of ₹546.19 Cr. in the financial year 2019-20
showing an increase of 25.98%. Even after a 52.66% increase in interest income and a negative provision for
tax of ₹2348.29 Cr., the net profit was comparatively lower. The reason for this can be an increase in various

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expenses like depreciation, other expenses, provisions, and contingencies. The net profit for the financial year
2014-15 was highest among the years given below despite being low interest income (Annexure 1).

Particulars Mar 2020 Mar 2019 Mar 2018 Mar 2017 Mar 2016 Mar 2015
(₹). Cr (₹). Cr (₹). Cr (₹). Cr (₹). Cr (₹). Cr
Reported 546.19 433.52 -2431.81 1383.14 -5395.54 3398.44
Net Profit

Reported Net Profit

4000
3000 3398.44
2000
1000 546.19 1383.14
433.52
0
(₹). Cr (₹). Cr (₹). Cr (₹). Cr (₹). Cr (₹). Cr
-1000
-2000 Mar-20 Mar-19 Mar-18 Mar-17 Mar-16 Mar-15

-3000 -2431.81

-4000
-5000
-6000 -5395.54

Assets and Liabilities

As per the financial year 2019-20, the Bank of Baroda has total assets and liabilities of ₹1157915.51
Cr. (Annexure 2). Out of the assets, Investments and Advances has major holdings, which is normal
for any banking company. During the year investments have increased by 50.66% and advances have
increased by 47.20%.

In case of liabilities, the major change occurred in other liabilities and provisions and this has been
increased by 94.93%.

Ratio Analysis

For Banks, an ideal current ratio is 1.33:1. The Bank of Baroda has an ideal ratio of 1.33 (Annexure
5), which shows that the bank has enough liquidity to payback its current liabilities.

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Even after an increase in the profit of the company during the financial year 2019-20 (Annexure 1),
the bank’s net profit per share has been reduced to 1.18 (Annexure 6). The various per share ratios
are not in good condition, the most important being the basic earnings per share which has also been
reduced as compared to the previous year.

Cash Flow Analysis

The cash flow statement of Bank of Baroda shows that the cash inflow from financing activities has
been increased by 230.91% in the financial year 2019-20. This indicates that the bank has raised new
money through the issue of shares and bonds. This year the bank has positive cash inflow from
investing activities as apart from buying new fixed assets, the bank has also sold some of its old assets
(Annexure 3).

Competitor Analysis

Bank of Baroda is one of the biggest banks of the public sector. It is the third-largest bank by market
capitalization (Annexure 7). Bank of Baroda is doing quite better than some of the competitor’s bank.
Punjab National Bank (PNB) is bigger than Bank of Baroda as per market capitalization. But the total
assets and the net profit of PNB is comparatively lower than Bank of Baroda. Some of the smaller
competitive banks like Indian Bank, Oriental Bank, etc. are doing quite better (Annexure 7).

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 INFERENCES

Industry Performance

Indian Banking Sector is sufficiently capitalised and regulated. In order to improve operational
efficiency and reduce the weight of bad loans and stressed assets, many public sector banks are being
merged. The non-performing assets (NPA) of various commercial banks had declined for the first
time since the last seven years in the year 2019 but they start increasing during the year 2020. Things
have changed and transformed in the 21st century as people prefer more convenience. The entire focus
of the banking industry has been shifted to customer satisfaction by offering a wider variety of
products and services. Rising income and digital payments revolution will trigger massive changes
in the way credit is disbursed in the country.

Organization Performance

The Bank of Baroda is offering a wide range of services matching that of its competitors. As the
banking industry is also moving into digitalization, the Bank of Baroda has introduced a variety of
applications for seamless and hassle-free transactions (Exhibit 2). Bank of Baroda needs to work more
on its weakness like increasing NPA’s and limited overseas presence.

Financial Performance

From the analysis, it has been found out that the revenue of the Bank of Baroda is slightly increasing
year by year. However, no such thing can be said when it comes to the profit earned by the bank. The
bank is suffering from loss in some of the years without much change in the revenue for that particular
year. The reason for the loss can be the increase in provisions and contingencies expenses in some of
the years (Annexure 1). The Bank of Baroda can get a competitive advantage from merger and can
work on improving the financial ratios by focusing on economies of scale and reducing duplication
of resources.

Environment Analysis

Bank of Baroda is one of the market leaders in terms of market capitalization in the public sector
banks. The closest competitor of Bank of Baroda is Punjab National Bank which has become stronger
after the merger with two other banks. There is no emerging competitor in the banking sector as of
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now but due to the increasing merger and acquisitions of various public sector banks, there is always
a risk of losing market share to the other payers.

SWOT Analysis of Bank of Baroda

STRENGTHS WEAKNESSES

Diversified branch network

Complete Banking products
portfolio
Government accounts
Strong Capital Position
Third Largest Bank
High growth in NPAs
Low overseas presence
Forex Scam
Low brand equity being
government banks

Transformation to
Bankassurance model
Intensifying Competition
Favourable interest rate
policies Lukewarm global
interbank lending
Increasing adoption of
technology Private banks
Bank audits

OPPORTUNITIES THREATS

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 ANNEXURES
Annexure 1: Profit and Loss Statement of Bank of Baroda from the financial year 2014-15 to
2019-20

Particulars Mar 2020 Mar 2019 Mar 2018 Mar 2017 Mar 2016 Mar 2015
(₹). Cr (₹). Cr (₹). Cr (₹). Cr (₹). Cr (₹). Cr
Income

Interest / Discount
54,115.77 34,388.97 29,069.82 27,523.93 29,796.23 30,802.68
on Advances / Bills
Income from
18,097.36 12,786.72 10,420.16 10,596.33 10,673.22 9,701.07
Investments
Interest on Balance
with RBI And
1,768.73 1,735.20 2,414.79 1,990.86 1,305.92 1,549.79
Other Inter-Bank
Funds
Others 2,001.79 859.72 1,743.77 2,088.81 2,285.90 910.01

Total Interest
75,983.66 49,770.61 43,648.54 42,199.93 44,061.28 42,963.56
Earned
Other Income 10,317.32 6,294.49 6,657.15 6,758.06 4,998.86
4,402.00
Total Income 86,300.98 56,065.10 50,305.69 48,957.99 49,060.14 47,365.55

Expenditure

Interest Expended 48,532.37 31,290.30 28,126.77 28,686.52 31,321.43 29,776.32

Payments To And
Provisions For 8,769.52 5,039.13 4,606.87 4,637.77 4,978.03 4,261.35
Employees
Depreciation 1,659.65 910.38 863.08 511.35 501.33
340.39
Operating Expenses
(Excludes
7,648.02 5,338.47 4,703.42 4,147.28 3,443.78 3,072.39
Employee Cost &
Depreciation)
Total Operating
18,077.19 11,287.98 10,173.37 9,296.40 8,923.14 7,674.13
Expenses
Provision Towards
-2,348.29 264.63 1,664.24 1,089.56 1,769.84 2,022.17
Income Tax
Provision Towards
0.00 0.00 -2,023.17 0.00 -3,072.38 0.00
Deferred Tax
Other Provisions
21,493.52 12,788.67 14,796.30 8,502.37 15,513.65 4,494.50
and Contingencies
Total Provisions
19,145.23 13,053.30 14,437.37 9,591.93 14,211.11 6,516.67
and Contingencies
Total Expenditure 85,754.79 55,631.58 52,737.51 47,574.85 54,455.68 43,967.12

Net Profit / Loss for

546.19 433.52 -2,431.81 1,383.14 -5,395.54 3,398.44
The Year

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 Net Profit / Loss
After EI & Prior 546.19 433.52 -2,431.81 1,383.14 -5,395.54 3,398.44
Year Items
Profit / Loss
0.00 0.00 0.00 0.00 0.00 0.00
Brought Forward
Total Profit / Loss
Available for 546.19 433.52 -2,431.81 1,383.14 -5,395.54 3,398.44
Appropriations
Source: https://www.moneycontrol.com/financials/bankofbaroda/profit-lossVI/BOB/2#BOB

Annexure 2: Balance Sheet of Bank of Baroda from Financial year 2015-16 to 2019-20

Mar 2020 Mar 2019 Mar 2018 Mar 2017 Mar 2016
Particulars (₹). Cr (₹). Cr (₹). Cr (₹). Cr (₹). Cr
Capital and Liabilities:

Total Share Capital 925.37 530.36 530.36 462.09 462.09

Equity Share Capital 925.37 530.36 530.36 462.09 462.09

Share Application
0.00 5,042.00 0.00 0.00 0.00
Money
Reserves 70,930.84 45,410.73 42,864.41 39,841.16 39,736.89

Net Worth 71,856.21 50,983.09 43,394.77 40,303.25 40,198.98

Deposits 945,984.43 638,689.72 591,314.82 601,675.17 574,037.87

Borrowings 93,069.31 67,201.30 62,571.97 30,611.44 33,471.70

Total Debt 1,039,053.74 705,891.02 653,886.79 632,286.61 607,509.57

Other Liabilities &

47,005.56 24,113.29 22,718.21 22,285.56 23,667.92
Provisions
Total Liabilities 1,157,915.51 780,987.40 719,999.77 694,875.42 671,376.47

Assets:

Cash & Balances with

32,645.85 26,661.73 22,699.64 22,780.21 21,672.42
RBI
Balance with Banks,
89,255.27 62,567.89 70,197.74 127,689.70 112,227.93
Money at Call
Advances 690,120.73 468,818.74 427,431.83 383,259.22 383,770.18

Investments 274,614.61 182,298.08 163,184.53 129,630.54 120,450.52

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 Gross Block 8,889.29 6,990.30 5,367.39 5,758.37 6,253.78

Net Block 8,889.29 6,990.30 5,367.39 5,758.37 6,253.78

Other Assets 62,389.76 33,650.68 31,118.64 25,757.37 27,001.65

Total Assets 1,157,915.51 780,987.42 719,999.77 694,875.41 671,376.48

Source: https://www.capitalmarket.com/Company-Information/Financials/Balance-Sheet/Bank-of-
Baroda/5456

Annexure 3: Cash Flow Statement Summary

Mar 2020 Mar 2019 Mar 2018 Mar 2017 Mar 2016
Particulars (₹). Cr (₹). Cr (₹). Cr (₹). Cr (₹). Cr
Profit Before Tax -1802.11 698.15 .00 2472.70 .00
Net Cash Flow from Operating Activity 929.51 -4119.63 -61087.84 17193.86 -9841.66
Net Cash Used in Investing Activity 141.03 -3957.05 -563.35 -426.04 -3995.41
Net Cash Used in Financing Activity 14589.74 4408.92 4078.65 -198.26 -615.73
Net Increase/Decrease in Cash and Cash
32671.50 -3667.76 -57572.53 16569.56 -14452.80
Equivalent
Cash and Cash Equivalent - Beginning of 133900.3 148353.1
89229.62 92897.38 150469.91
the Year 5 5
Cash and Cash Equivalent - End of the 150469.9 133900.3
121901.12 89229.62 92897.38
Year 1 5
Source: https://economictimes.indiatimes.com/bank-of-baroda/cashflow/companyid-12040.cms

Annexure 4: Interest Earned

Particulars For the Year Ended For the Year Ended

31st March 2020 31st March 2019
Interest /Discount on Advances / Bills 54115,77,25 34388,96,60

Income on Investments 18097,35,72 12786,71,55

Interest on Balances with Reserve Bank 1768,73,25 1735,20,36

of India and other Inter-Bank Funds
Others 2001,79,28 859,72,09

Source: Annual Report of Bank of Baroda 2019-2020

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Annexure 5: Liquidity Ratios

Ratios Mar 2020 Mar 2019 Mar 2018 Mar 2017 Mar 2016
Current Ratio 1.33 1.40 1.37 1.16 1.14

Current Ratio (Inc. ST Loans) 0.06 0.05 0.05 0.04 0.05

Quick Ratio 16.70 21.94 21.18 19.38 18.27

Fixed Assets Turnover Ratio 0.08 0.07 0.06 0.06 0.07

Source: https://www.goodreturns.in/company/bank-of-baroda/ratios.html

Annexure 6: Per Share Ratios of Bank of Baroda

Particulars Mar Mar Mar Mar Mar

2020 2019 2018 2017 2016
Basic EPS (Rs.) 1.36 1.64 -10.53 6.00 -23.89

Diluted EPS (Rs.) 1.36 1.41 -10.53 6.00 -23.89

Cash EPS (Rs.) 4.77 5.07 -5.92 8.20 -21.18

Book Value [Excl. Reval Reserve]/Share (Rs.) 155.30 173.24 163.64 174.44 173.99

Book Value [Incl. Reval Reserve]/Share (Rs.) 155.30 173.24 163.64 174.44 173.99

Dividend/Share (Rs.) 0.00 0.00 0.00 1.20 0.00

Operating Revenue / Share (Rs.) 164.22 187.68 164.60 182.65 190.70

Net Profit/Share (Rs.) 1.18 1.63 -9.17 5.99 -23.35

Source: https://www.moneycontrol.com/financials/bankofbaroda/ratiosVI/BOB

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Annexure 7: Competitor’s Analysis

Name of the Net Interest

Market Cap. Net Profit Total Assets
Bank Last Price Income
(Rs. Cr.)
SBI 271.45 242,258.58 257,323.59 14,488.11 3,951,393.92
PNB 36.55 34,395.85 53,800.03 336.20 830,665.91

Bank of
63.10 29,155.78 75,983.65 546.18 1,157,915.51
Baroda
Canara Bank 121.60 20,024.34 48,934.99 -2,235.72 723,874.74
Union Bank 31.10 19,925.29 37,231.12 -2,897.78 550,683.27
IOB 10.95 17,998.50 17,406.11 -8,527.40 260,726.83
Bank of India 49.60 16,253.54 42,353.26 -2,956.89 656,995.47
UCO Bank 12.75 12,645.88 15,134.34 -2,436.83 235,908.14
Indian Bank 87.40 9,870.66 21,404.97 753.36 309,468.17
Bank of
13.40 8,790.61 11,495.44 388.58 168,867.17
Maharashtra
Central Bank 13.70 8,049.52 23,562.47 -1,121.35 356,435.85
Vijaya Bank 46.05 6,005.60 12,589.84 727.02 177,632.05
Oriental Bank 43.45 5,953.56 17,867.69 54.99 271,909.55
Corporation
9.80 5,874.30 15,622.63 -6,332.98 213,577.86
Bank
United Bank 4.50 4,081.18 8,559.88 -2,315.92 151,529.93
Syndicate
15.15 4,065.84 21,725.40 -2,588.30 311,278.86
Bank
Allahabad
7.60 3,440.89 16,864.29 -8,333.96 248,575.76
Bank
Dena Bank 12.65 2,857.69 8,932.23 -1,923.15 120,859.80
Andhra Bank 9.10 2,816.94 18,932.22 -2,786.13 249,311.41
Punjab &
13.35 935.91 7,929.53 -990.80 100,503.81
Sind Bank
Source: https://www.moneycontrol.com/competition/bankofbaroda/comparison/BOB

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 EXHIBITS
Exhibit 1: Banking Sector in India

Banks in India

Commercial Small Finance Co-operative

Payments Bank
Bank Bank Bank

Urban Co-
Public Sector
operative

Private Sector Rural Co-

operative

Regional
RuralBank

Foreign Bank

Exhibit 2: Bank of Baroda Mobile Applications for Digital Payment and Trading

BOB Mobile Banking app Primary Features

Check account balance, outstanding credit card
Baroda MConnect Plus payment, account statements
Transfer funds using IMPS, RTGS & NEFT
A UPI (Unified Payment Interface) application
BHIM Baroda Pay that allows instant bank transfers from any
account using a virtual payment address system.
This is the traditional bank passbook on mobile
Baroda mPassbook that provides all information related to a
customer bank account in 8 languages.
Online wealth manager with paperless KYC
Baroda mInvest and Investment portfolio tracking and
management.
Seamless online trading platform with equity
Baroda E-Trade
advisors from BOBCAPS.
Source: https://www.paisabazaar.com/banking/bank-of-baroda-mobile-banking/

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 REFERENCES
https://www.rbi.org.in/scripts/banklinks.aspx

Bank of Baroda: Banking Services & Products Information (paisabazaar.com)

Top 10 Largest Banks in India 2020 - List of Banks as per RBI (mymoneymantra.com)

https://www.thehindubusinessline.com/economy/infographic-little-known-facts-about-indias-
banking-network/article9381949.ece

https://www.ibef.org/industry/banking-presentation

https://economictimes.indiatimes.com/industry/banking/finance/banking/govt-asks-banks-to-open-
15000-branches-in-fy21/articleshow/73286116.cms?from=mdr

https://www.thehindubusinessline.com/economy/infographic-little-known-facts-about-indias-banking-
network/article9381949.ece

https://www.ibef.org/industry/banking-presentation

https://economictimes.indiatimes.com/industry/banking/finance/banking/govt-asks-banks-to-open-15000-
branches-in-fy21/articleshow/73286116.cms?from=mdr

https://www.paisabazaar.com/bank-of-baroda/

https://www.mymoneymantra.com/blog/these-are-the-top-10-largest-banks-in-india/

https://www.icicibank.com/wealthmanagement/personal/bankingproductandservices.page?#toptitle
https://en.wikipedia.org/wiki/Retail_banking
https://www.paisabazaar.com/business-loan/corporate-loan/
https://www.bankofbaroda.in/particular-details-about-the-bank.htm
https://economictimes.indiatimes.com/industry/banking/finance/banking/bank-of-baroda-experiments-with-
vertical-structure-for-operational-synergies/articleshow/69728770.cms?from=mdr
https://www.thehindubusinessline.com/money-and-banking/bank-of-baroda-goes-in-for-new-organisation-
structure/article26966456.ece
https://www.financialexpress.com/industry/banking-finance/bank-of-baroda-to-use-covid-opportunity-to-
revamp-operating-model/2072897/
https://corporatefinanceinstitute.com/resources/knowledge/finance/banks-business-segments/

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 UNDERTAKING

To Whom It May Concern:

We, Abhinav Kedia, Gunjan Karwa, Harsh Jain, Shruti Patil, and Yogita Attal hereby declare that
this assignment is our original work and is not copied from anyone/ anywhere. If found similar to
other sources, we shall take complete responsibility of the action, taken thereof by, CFM Team.

Group No.: 37

Section: D

Batch: MBA – FT (2020 – 2022)

Date: 23rd December 2020

Signature:

Name: Abhinav Kedia Gunjan Karwa Harsh Jain Shruti Patil Yogita Attal

Roll No.: 201401 201420 201421 201450 201462

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