Bank of Baroda (PG-10-04)

Bank of Baroda (`in Crs) Sr. No 1 Ratio Capital Adequacy Ratio Formula Tier I Capital Tier II Capital Risk Weighted Assets 2 Asset Quality Net NPA Loans & Advances 3 Management Quality Non Interest Expense Total Assets 4 4.1 Earnings Ability ROCE NPAT Total Capital Employed 4.2 EBITDA Margin EBIT Total Income 4.3 Leverage Ratio Debt Total Funds 4.4 ROE Net Profit After Tax Equity Capital 4.5 ROA Net Profit After Tax Total Assets 4.6 Net Interest Margin Interest Income Interest Expense Total Assets 5 Liquidity Risk Reserves & Surplus Total Assets 6 Sensitivity to Market Risk Beta 2227.20 18471.63 12.06% 3342.94 17849.23 18.73% 5636.08 18471.63 30.51% 2227.20 12835.53 17.35% 2227.20 227406.73 0.98% 5123.41 227406.73 2.25% 12835.53 227406.73 5.64% 0.81 3058.33 28456.48 10.75% 4238.06 19504.69 21.73% 13350.08 28456.48 46.91% 3058.33 15106.37 20.25% 3058.33 278316.70 1.10% 5939.49 278316.70 2.13% 15106.37 278316.70 5.43% 0.87 4241.67 73300.97 5.79% 5650.32 24695.10 22.88% 22307.85 73300.97 30.43% 4241.67 20993.10 20.21% 4241.67 358397.17 1.18% 8802.26 358397.17 2.46% 20993.10 358397.17 5.86% 0.69 2008-09 11069.64 7244.12 130324.89 14.05% 451.15 143985.89 0.31% 3576.06 227406.73 1.57% 2009-10 14356.88 8060.36 156091.41 14.36% 602.32 175035.28 0.34% 3810.58 278316.70 1.37% 2010-11 20974.23 9509.19 209890.48 14.52% 790.88 228676.36 0.35% 4629.83 358397.17 1.29%

Bank of Baroda (PG-10-04)

Capital Adequacy Ratio (CAR): CAR shows the ability of a bank to deal with probable loan defaults. The banks CAR is around 14.36% under Basel II as on March 2010, 14.05% as on March 2009 and 14.52% as on March 2011. In 2011, Bank strengthened its capital-base by rising `1,000crore through unsecured subordinated bonds and `900crore through innovative perpetual bonds. Asset quality: It helps to determine the robustness of financial institutions against loss of value in the assets. Bank has high asset quality as Net NPA/Loans and advances ratio has been in the range of 0.31% to 0.35%. A low level of NPAs suggests low probability of a large number of credit defaults that affect the profitability and net-worth of banks and also wear down the value of the asset. Management Quality: This reflects the efficiency of the Management of the bank. This ratio has reduced from 1.57% in March 2010 to 1.37% as on 2010 and then further to 1.29% as on March 2011. This shows that management is able to manage the bank efficiently. ROCE This ratio has reduced from 12.06% in 2009 to 5.79% in 2011 due to increase in Debt and Shareholders funds diluting the returns. Thus it can be said the profit has not increased in relation to Equty EBITA Margin: EBITDA Margin has shown a increase trend continually YoY from 18.73% in 2009 to 22.88% in 2011. There has been a minor increase in 2011 compared to 2010 Leverage Ratio: The Leverage ratio is high in 2008-10. However, in 2009-10 it encountered a very steep increase in the debt and total funds. This may be because of Lehman crises starting in October 2008. Banks were allowed to borrow due to slow down, RBI was dovish and the interest rates had fallen, so the cost of borrowing is less. The present ratio stands at 30.43%. ROE: ROE has been showing a decreasing tend from 2008 to 2011. The NPAT has increased but less compared to Equity Capital. ROA: Return on Asset Ratio shows that how much return bank can get from their total asset. Higher the ratio is good for the bank. Because if ratio is higher than we can say that the return of bank is high. Above we can see that in 2009 this ratio is 0.98% and it has increased in 2010 to 1.10% and further increased to 1.18% Net Interest Margin: NIM has seen a moderate decrease from 2008 to 2009 but again there is an increase in 2011 to 2.46%. This can be attributed to the fact that funds were availed at a very low cost during slow down. Liquidity Risk There has been increase in the reserves and surplus as a proportion of Total assets from 2009 to 2011. Thus the present ratio stands at 5.86%. It is used to measure how solvent is bank in case of liquidation. This ratio is around 5.5% from 2008-11. This indicates that bank has good amount of reserves to overcome liquidity risks. Sensitivity to market: The Beta of ICICI Bank is moderate, which shows that it is not an aggressive stock with a Beta at 0.81.