ROMIL BHANDARI

ROLL NO = 007
M.COM BANKING AND FINANCE
BANK OF BARODA
INTRODUCTION
Bank of Baroda (BOB) is an Indian government owned banking and financial services company. It is under
the ownership of Ministry of Finance , Government of India. It is the third largest government owned bank in
India, with 132 million customers, a total business of US$218 billion, and a global presence of 100 overseas
offices. Based on 2019 data, it is ranked 1145 on Forbes Global 2000 list.
The government of India announced the merger of Bank of Baroda, Vijaya Bank and Dena Bank on September
17, 2018, to create the country's second largest lender. The amalgamation is the first-ever three-way
consolidation of banks in the country, with a combined business of Rs14.82 trillion (short scale), making it the
third largest bank after State Bank of India (SBI) and ICICI Bank.
Among the Bank of Baroda's overseas branches are ones in the world's major financial centres (e.g., New
York, London, Dubai, Hong Kong, Brussels and Singapore), as well as a number in other countries. The bank is
engaged in retail banking via the branches of subsidiaries in Botswana, Guyana, Kenya, Tanzania, and Uganda.
The bank plans has recently upgraded its representative office in Australia to a branch and set up a joint venture
commercial bank in Malaysia. It has a large presence in Mauritius with about nine branches spread out in the
country. The tagline of Bank of Baroda is "India's International Bank".
The bank has wholly owned subsidiaries including BOB Financial Solutions Limited (erstwhile BOB Cards
Ltd.) and BOB Capital Markets. Bank of Baroda also has a joint venture for life insurance business with India
First Life Insurance. The bank owns 98.57% in The Nainital Bank. The bank has also sponsored three Regional
Rural Banks namely Baroda Uttar Pradesh Gramin Bank Baroda Rajasthan Gramin Bank and Baroda Gujarat
Gramin Bank.Bank of Baroda was incorporated on July 20 1908 as a as a private bank with the name The Bank
of Baroda Ltd. The Bank was established with a paid up capital of Rs 1 million In the year 1910 the Bank
opened their first branch in the city of Ahmedabad. In the year 1919 they opened their first branch in Mumbai
City.

GROWTH AND SECONDARY DATA

Bank of Baroda was recognized by Dun & Bradstreet as the Best Public Sector Bank under the category ‘Global
Business Development’ at Polaris Financial Technology Banking Awards 2013. Bank won a Special Award for
Best IT Team among Public Sector Banks at IDRBT Banking Technology Excellence Awards 2012-13. Bank
has been pioneer in spreading and promoting the use of Hindi through the forum of Nagar Rajbhasha Samitis
and has won Reserve Bank Rajbhasha Competition on Aug-13. Bank constantly innovates, reorients strategies
and realigns business processes with advanced technology to serve the customers better and earn strong brand.
The Bank has identified “RACE AHEAD” as its motto for the FY15 and it can not only achieve a significant
business growth but also improve its profitability and soundness indicators. With GDP growth expected to pick
up, banking business is likely to witness higher optimism during FY21. BoB has always looked at technology as
a key facilitator to provide better customer service and ensured that its ‘IT strategy’ follows the ‘Business
strategy’ to serve all stakeholders. To respond to increasing competition and other challenges, Bank will make
its business model more costefficient and try to improve its Earnings through an optimum mix of interest
income and noninterest income. To achieve this, it will constantly optimise the use of technology as the change
agent. Boosted by robust economic growth, the bank expects to sustain and improve its performance. Similar to
its efforts to improve Asset Quality management in FY21, your Bank will focus on credit monitoring, NPA
recovery and up-gradation in a big way and further arrest the fresh slippages. Bank proposes to launch ‘Adarsh
Grameen Branches’ shortly. These branches will be constructed by Bank on its owned plot of land in rural areas
and will include branch premises, manager’s residence and assembly areas. The assembly area will be having
audio-visual facilities to enable various activities like agri-clinic, vocational education, medical camp etc. This
endeavor will not only provide BoB to take forward the mission of Financial Inclusion, but also generate a lot of
goodwill. With its intrinsic strengths in the form of capital, human resources, technology and iconic brand, BoB
is well positioned for growth during FY21.
SWOT ANALYSIS
STRENGTHS
 Complete Banking Products Portfolio: Bank of Baroda has a wide range of banking services and
financial instruments available for its customers.
 Wide Branch Network: Bank of Baroda, the second-largest bank in India, has a diversified branch
network mix that sustains low-cost capital mobilization. Bank of Baroda has over 9482 branches
throughout the country and has also reached rural India with over 1964 branches in rural India. Bank of
Baroda has 13193 ATMs.
 Salary Account of Government Employees: Most of the government employees are having salary
account in the Bank of Baroda.
 Strong Capital Position: Bank of Baroda held a strong capital adequacy ratio (CAR) of 13.45 percent
as of 31 March 2019. Bank of Baroda has a business of 218 billion US Dollars.
 Large Customer Base: Bank of Baroda has a customer base of 131 million.
 Merger: Government has merged Bank of Baroda, Vijaya Bank, and Dena Bank. Bank of Baroda is
now the third-largest lender in the country.
 Interest Rates: Interest rates are less as compared to private sector banks.

WEAKNESSES
 NPA: The NPA of Bank of Baroda is increasing year by year. In the year 2019, it was 15610 Crores and
in the year 2020, it was 21577 Crore rupees. The bank is not able to decrease this NPA.
 Less Presence in International Markets: Bank of Baroda has business in 27 countries but the bank is
primarily focused on its Indian market. BOB’s must increase their services in international markets to
increase its profits.
 Forex Fraud: A number of employees have been caught in Forex Scam over the years. Even the RBI
penalized the Bank of Baroda for a forex fraud of almost 6000 crores. Likewise, there have been other
scams concerning bank employees.
 Less Brand Value: Government banks are known to advertise even less and only on the basis of the
available budget. As a consequence, the bank has very poor brand value relative to private banks. In
terms of the Government Banks, the Central Bank of India and other subsidiaries of the State Bank, as
well as the Bank of India, has higher brand equity.

OPPORTUNITIES
 Bancassurance: Most of the banks are promoting products offered by one or the other insurance
companies. Bank of Baroda has entered into a joint venture with Andhra Banks and the UK-based firm
and promoting products of IndiaFirst Life Insurance. This bancassurance model may have long-term
results for the Bank of Baroda.
 UPI / Payment Bank: New banking products like UPI Payment Wallets are also a great opportunity for
the bank. Bank can launch its UPI Payment app like Paytm or PhonePe.
 Development of Loan Market: Due to developing infrastructure Bank of Baroda can provide loans at
less interest rates to potential customers.
 Business / Personal Loan: The business and personal loan segment can be a great opportunity for Bank
of Baroda.
THREATS
 High competition: There are many national and international players in Banking Industry. Due to
intense competition business of Bank of Baroda is affected and this can be a major threat to the bank.
  Online Lending: Online Loans offered by various NBFC and Private Banks can be a major threat to the
Personal Loan department of Bank of Baroda.
 Private banks:  Private banks are a big rival to government banks because of the facilities offered and
because of the strong functionality of priavate banks over government banks.
 Payment Wallets: Payment Wallets can also affect the business of Banks. This can be a major threat to
Bank of Baroda and other government sector banks.

BCG MATRIX
STARS

 The financial services strategic business unit is a star in the BCG matrix of Bank of Baroda Leadership
Challenges. It operates in a market that shows potential in the future. Bank of Baroda Leadership
Challenges earns a significant amount of its income from this SBU.
 The Number 1 brand Strategic business unit is a star in the BCG matrix of Bank of Baroda Leadership
Challenges, and this is also the product that generates the greatest sales amongst its product portfolio.
The potential within this market is also high as consumers are demanding this and similar types of
products. Bank of Baroda Leadership Challenges should undergo a product development strategy for
this SBU, where it develops innovative features on this product through research and development. This
will help Bank of Baroda Leadership Challenges by attracting more customers and increases its sales.
 The Number 2 brand Strategic business unit is a star in the BCG matrix of Bank of Baroda Leadership
Challenges as Bank of Baroda Leadership Challenges has a 20% market share in this category. It also
the market leader in this category. The overall category is expected to grow at 5% in the next 5 years,
which shows that the market growth rate is expected to remain high. Bank of Baroda Leadership
Challenges should use its current products to penetrate the market. This could be done by improving its
distributions that will help in reaching out to untapped areas. This will help increase the sales of Bank of
Baroda Leadership Challenges

CASH COWS

 The supplier management service strategic business unit is a cash cow in the BCG matrix of Bank of
Baroda Leadership Challenges. This has been in operation for over decades and has earned Bank of
Baroda Leadership Challenges a significant amount in revenue. The market share for Bank of Baroda
Leadership Challenges is high, but the overall market is declining as companies manage their supplier
themselves rather than outsourcing it. The recommended strategy for Bank of Baroda Leadership
Challenges is to stop further investment in this business and keep operating this strategic business unit as
long as its profitable.
 The Number 3 brand strategic business unit is a cash cow in the BCG matrix of Bank of Baroda
Leadership Challenges. This is an innovative product that has a market share of 25% in its category.
Bank of Baroda Leadership Challenges is also the market leader in this category. The overall category
has been declining slowly in the past few years. Bank of Baroda Leadership Challenges has the power to
influence the market as well in this category. It should, therefore, invest in research and development so
that the brand could be innovated. This will help the category grow and will turn this cash cow into a
star. The overall benefit would be an increase in sales of Bank of Baroda Leadership Challenges.
 The international food strategic business unit is a cash cow in the BCG matrix for Bank of Baroda
Leadership Challenges. This business unit has a high market share of 30% within its category, but
people are now inclined less towards international food. This change in trends has led to a decline in the
growth rate of the market. The recommended strategy for Bank of Baroda Leadership Challenges is to
invest enough to keep this strategic business unit under operations. If it no longer remains profitable and
turns into a dog, then Bank of Baroda Leadership Challenges should divest this strategic business unit.

QUESTION MARKS
  The local foods strategic business unit is a question mark in the BCG matrix for Bank of Baroda
Leadership Challenges. The recent trends within the market show that consumers are focusing more
towards local foods. Therefore, this market is showing a high market growth rate. However, Bank of
Baroda Leadership Challenges has a low market share in this segment. The recommended strategy for
Bank of Baroda Leadership Challenges is to invest in research and development to come up with
innovative features. This product development strategy will ensure that this strategic business unit turns
into a cash cow and brings profits for the company in the future.
 The Number 4 brand strategic business unit is a question mark in the BCG matrix for Bank of Baroda
Leadership Challenges. This strategic business unit is a part of a market that is rapidly growing.
However, this strategic business unit has been incurring losses in the past few years. It has also failed in
the attempts made at innovation by research and development teams. The recommended strategy for
Bank of Baroda Leadership Challenges is to divest and prevent any future losses from occurring.
 The confectionery strategic business unit is a question mark in the BCG matrix for Bank of Baroda
Leadership Challenges. The confectionery market is an attractive market that is growing over the years.
However, Bank of Baroda Leadership Challenges has a low market share in this attractive market. The
low sales are as a result of low reach and poor distribution of Bank of Baroda Leadership Challenges in
this segment. The recommended strategy for Bank of Baroda Leadership Challenges is to undergo
market penetration, where it pushes to make its product present on more outlets. This will ensure
increased sales for Bank of Baroda Leadership Challenges and convert this strategic business unit into a
cash cow.

DOGS
 The plastic bags strategic business unit is a dog in the BCG matrix of Bank of Baroda Leadership
Challenges. This strategic business unit has been in the loss for the last 5 years. It also operates in a
market that is declining due to greater environmental concerns. The recommended strategy for Bank of
Baroda Leadership Challenges is to divest this strategic business unit and minimise its losses.
 The Number 5 brand strategic business unit is a dog in the BCG matrix for Bank of Baroda Leadership
Challenges. This is operating in a market segment that is declining in the past 5 years. The company also
has negative profits for this strategic business unit. However, it is expected that the market will grow in
the future with environmental changes that are occurring. The recommended strategy for Bank of
Baroda Leadership Challenges is to invest in the business enough to convert into a cash cow. This will
ensure profits for Bank of Baroda Leadership Challenges if the market starts growing again in the future.
 The synthetic fibre products strategic business unit is a dog in the BCG matrix of Bank of Baroda
Leadership Challenges. The market for such products has been declining, and as a result of this decline,
Bank of Baroda Leadership Challenges has been facing a loss in the past 3 years. The market share for it
is also less than 5%. The recommended strategy for Bank of Baroda Leadership Challenges is to divest
this strategic business unit to minimise any further losses.

STRATEGIES ANF FUTURE PROSPECTS FOR EXPANSION AND

OVERCOMING CHALLENGES
Also, the government has finally taken a ‘right’ step towards the long-awaited reforms needed in the banking
sector. After the release of Union Budget 2021 on Monday, the Finance Minister, Nirmala Sitaraman revealed
in her budget speech the government’s plans of privatizing two PSU banks and one general insurance company
in the next financial year.

The decision was expected since the merger of 13 public sector banks into five which was done last year. The
announcement also mentioned that the government is also planning to strengthen the credit flow of PSU banks
by recapitalizing Rs 20,000 crore in them. Though the non-merger banks have got a lot of capital infusion from
the government, the analysts feel that the banks that were involved in the merger will be most likely to be
chosen. Among the banks that were not involved in the merger, Punjab and Sind Bank and Bank of Maharashtra
have grabbed the spotlight. Bank of Baroda and Punjab National Bank are the potential candidates in the latter
category.

Moreover, analysts believe that BoB and PNB are better choices since the merger of good quality companies
has improved their structure. Deven Choksey, MD of KR Choksey Shares & Securities Private Limited also
said that these banks will attract more investors.  

CONCLUSION
Bank of Baroda Leadership Challenges is vertically integrating by acquiring other firms in the supply chain.
This will help it in earning more profits as this Strategic business unit has potential. Revolutionary and
discontinuous changes in the operating environment are a stark reminder that business success is 'impermanent'.
The emergence of IT as a major driver for change, has accentuated the need to initiate a major transformation
program. The conversion to an IT savvy, market driven bank will be a prerequisite to survival and growth. A
major and strategic step in hi-tech, was the establishment of the Integrated Treasury branch, as a forerunner to
full-fledged global treasury operations. Towards creating a future Bank of Baroda, the Bank has adopted a
revolutionary new business strategy that will be enabled by a revolutionary new IT strategy. Actioning this
strategy will position Bank of Baroda as India's uncontested premier bank.

At Bank of Baroda, change is a journey. It has a beginning. There will be no end. It will be a long and difficult
march. And the Bank will emerge stronger, more resilient and positioned to become India's first bank of truly
global standards. The relocation to the imposing Baroda Corporate Centre, is a true reflection of the Bank's
resolve to move ahead of the times. It will not be out of place now, as it stands on the threshold of a digital era,
to echo the same sentiments that guided the Bank in its platinum jubilee year - 'a promising future is the sequel
to a glorious past'.

REFERENCES
 https://in.investing.com/equities/bank-of-baroda-income-statement?period_type=annually,
15:31:14 Real-time Data, Chart and Financials
 https://trak.in/tags/business/2021/02/02/punjab-national-bank-bank-of-baroda-will-be-sold-to-private-
firms-privatization-of-psbs-start/ By Pratyancha Dhore Last updated Feb 16, 2021
 https://www.projects4mba.com/swot-analysis-of-bank-of-baroda/5228/#:~:text=SWOT%20Analysis
%20of%20Bank%20of%20Baroda%20focuses%20on%20Strengths%2C%20weaknesses,Analysis
%20of%20Bank%20of%20Baroda.&text=Bank%20of%20Baroda%20operates%20mainly%20in
%20India. July 19, 2021
 https://www.case48.com/bcg-case/8167-Bank-of-Baroda-Leadership-Challenges by Sophia Morgan on
Jul-30-2018
 https://www.slideshare.net/Ashish1004/project-bob