Journey of Bank of Baroda (BoB)

Bank of Baroda (BoB) was set up in 1908 by the Maharaja of Baroda, Sir Sayajirao Gaekwad III. The first branch of the bank was established at Mandvi in Baroda, while the second branch was established in Bombay in 1918, followed by Calcutta and Delhi. In 1953, BoB set up its first international branches in Kampala, Uganda and Mombasa, Kenya. In 1964, BoB became the first bank to set up mobile branches. In 1969, under the scheme for the nationalisation of banks, the Bank of Baroda became a public sector bank or PSB. Soon, in 1981, it became the bank with the largest deposits as well as net profits among all the nationalised banks. In 1996, it was also one of the first nationalised banks to issue equity shares for public trading. In 2002, it shifted its headquarters to Mumbai. In 2006, it built the loan factory model similar to an assembly line but for loans, core priorityed on SMEs. Recently, in 2019, the Bank of Baroda amalgamated two other major banks into itself, namely Dena Bank and Vijaya Bank.

Business Segments

Bank of Baroda’s domestic loan book consists of Corporate Loans, which have the largest share, followed by Retail Loans, Gold Loans, Agriculture loans, MSME loans, etc. Of the retail book, home loans make up a slight majority of the loan book, followed by auto loans and education loans. As per credit rating, the domestic loan book has a high majority of loans rated A and above. As of Q2 FY 2023, the international loan book made up 18% of the total loan book. In terms of segments, Bank of Baroda’s services can be divided into two broad categories, i.e. personal finance and business finance.

1. Personal finance includes the following:Accounts - Savings account, current account and term deposit.Loans - This includes loans related to home, personal, education, gold, and vehicle. It also includes advances against securities, mortgage loans, special overdraft facilities for e-commerce businesses, as well as special loans for defence personnel.Investments - Products include both government deposits and bonds as well as securities such as mutual funds.Insurance - General insurance, life insurance, health insurance.Digital products - Internet banking, payment solutions, credit cards, debit cards, etc.Partnership-based delivers, e.g. discounts for using credit cards.
2. Business finance includes the following:MSME-related schemes - government projects, remittances, Digital Mudra loans and working capital loans.Corporate schemes - Emergency credit lines, along with regular working capital loans, etc.Agriculture - Farm credit under Kisan credit cards and Tatkal credit, agricultural infrastructure fund, etc.International banking services - Foreign currency credit, international treasury, global trade service, etc.Start-up Banking for both domestic and international operations.

Today, the Bank of Baroda has multiple subsidiaries, such as Baroda BNP Paribas Asset Management India Pvt. Ltd., BOB Capital Markets Ltd, etc. The list includes foreign subsidiaries as well, such as Bank of Baroda Botswana Ltd. and Bank of Baroda (UK) Ltd., among others.

Key Personnel

• Mr Debadatta Chand, MD and CEO

Mr Chand assumed charge on July 1, 2023. He has around 3 decades of experience in the banking and financial services industry. He had earlier served as the Executive Director at Bank of Baroda, overseeing Corporate & Institutional Credit, Corporate & Institutional Banking, Treasury & Global Markets, etc. He began his career in 1994 as an officer at Allahabad Bank. Later, he worked at SIDBI and PNB. He has a B.TecDegreeree, an MBA, and a CAIIB qualification. He also has a PG Diploma in Equity Research and is a Certified Portfolio Manager.

Corporate Actions

Stock Split  Bank Of Baroda split the face value of its shares once, from ₹10 to ₹2 in 2014, with the stock being ex-split from January 22, 2015. Mergers and Acquisitions In 1958, the Bank of Baroda made its first domestic acquisition by buying Hind Bank. Thereafter, it gained complete control of many more banks, including a local area bank in Gujarat in 2004. The most recent ones include the acquisition of Vijaya Bank and Dena Bank in 2019. Earlier, BoB, Andhra Bank and Indian Overseas Bank had jointly opened the India BIA Bank Malaysia. Bank of Baroda has not announced any rights issue, share buybacks or bonus shares so far.

Financial Highlights

1. Since 2018-19, the bank has not seen a year of loss. In fact, the profits of the bank went from ₹1,620 crore in FY 2020-21 to ₹15,005 crore in FY 2022-23, which is nearly 10 times.
2. As of September 14, 2023, it has a high quick ratio of 1.92, which is the same as the current ratio of 1.92.
3. Its net cash flow has been volatile, with the figure being -₹27,855 crore in FY 2022-23.