Indian Banks

State owned Bank of Baroda cancelled its planned benchmark sale of bonds denominated in US dollars, according to three people familiar with the matter.

The people didn’t say whether the sale will be rescheduled or provide further details. The bank had planned to sell five-year notes priced to yield about 250 basis points over the benchmark mid-swap rate, two people familiar with the deal said yesterday, declining to be identified before a public announcement. A benchmark sale is typically $500 million in size.

“We’re in a temporary period where markets are gripped with risk aversion and if you need to come to market now, you’re going to have to pay up,” Tim Condon, chief Asia economist at ING Group NV in Singapore, said in a telephone interview today. “If you can afford to wait, it’s in your best interests to. I think that must be the advice most debt capital market players are giving their clients at this point.”

Popularity: 1% [?]

With a modest rise in net interest income (NII) and decline in treasury income, Bank of Borada (BoB) has posted a net profit growth of 17.5 per cent to Rs 832.49 crore for the quarter ended December compared to Rs 708.37 crore recorded in the same period of the previous year.

Its net profit was mainly driven by a rise in core fee income, which went up by 33.6 per cent to Rs 230.92 crore during the reporting period. NII, which is the difference between interest earned and interest paid, was up only 9.5 per cent during the quarter. Other income, on the other hand, declined by 22.07 per cent to Rs 659.65 crore resulting in its total income coming down by 2.38 per cent to Rs 4,836.62 crore.

Profit on sale of investment came down to Rs 139 crore during the period from Rs 414 crore in the comparable period last year mainly due to rising bond yields, the bank said. However, profit on sale of investment was aided by a one-time gain of Rs 69 crore during October –December of 2008-09 due to winding up of the bank’s holding in one of its subsidiaries.

Margins, however, improved sequentially due to increase in low-cost deposits. Net interest margins (NIMs) from domestic operations in the quarter stood at 3.4 per cent, up from 2.89 per cent recorded in the second quarter. Chairman MD Mallya said NIMs might further improve by a few basis points (bps) in the fourth quarter. Fall in cost of deposits by about 90 bps from domestic operations also helped in improving the margins.

The low-cost deposit or the current and savings account deposit (Casa) rose 24.6 per cent as of December-end, and as a result, the share of Casa to total deposits increased to 37 per cent from 36.17 per cent September-end.

Net advances increased to 23.5 per cent to Rs 1,56,171 crore as of December-end, while deposits went up by 27.6 per cent to Rs 215,117 crore. The bank is aiming for a 21 per cent increase in advances and 22 per cent increase in deposit in 2009-10.

Gross non-performing asset (NPAs) increased to Rs 2,260.27 crore as of December-end from Rs 1,921.42 crore in the year-ago period, and net NPA increased to Rs 487.68 crore from Rs 472.58 crore. However, both gross and net NPA ratios declined to 1.43 per cent from 1.5 per cent and 0.31 per cent from 0.37 per cent, respectively.

Provision coverage ratio of the bank stood at 78.42 per cent.

(BS)

Popularity: 1% [?]

Bank of Baroda (BoB) is the third largest Public Sector bank in India, after State Bank of India and Punjab National Bank. BoB has total assets in excess of Rs. 2.27 lakh crores, or Rs. 2,274 billion, a network of over 3000 branches and offices, and about 1100+ ATMs. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, credit cards and asset management.

Maharajah of Baroda Sir Sayajirao Gaekwad III founded the bank on July 20, 1908 in the princely state of Baroda, in Gujarat. The bank, along with 13 other major commercial banks of India, was nationalised on 19 July 1969, by the Government of India.

1908-1958

1908: Maharaja Sayajirao Gaekwad III set up Bank of Baroda (BOB).

1910: BOB established its first branch in Ahemdabad

1953: BOB established a branch in Mombassa and another in Kampala

1954: BOB opened a branch in Nairobi.

1956: BOB opened a branch in Dar-es-Salaam.

1957: BOB established a branch in London.

1959: BOB acquired Hind Bank.

1960s

1961: BOB merged in New Citizen Bank of India. This merger helped it increase its branch network in Maharashtra .

BOB also opened a branch in Fiji.

1962: BOB opened a branch in Mauritius.

1963: BOB acquired Surat Banking Corporation in Surat,Gijrat.

1964: BOB acquired two banks, Umbergaon People’s Bank in southern Gujarat and Tamil Nadu Central Bank in Tamil Nadu state.

1964: BOB lost its branch in Narayanjanj (East Pakistan) due to the Indo-Pakistan war. It is unclear when BOB had opened the branch.

1965: BOB opened a branch in Guyana.

1967: The Tanzanian government nationalized BOB’s three branches there and transferred their operations to the Tanzanian government-owned National Banking Corporation.

1969: The Government of India nationalized 14 top banks, including BOB.

BOB incorporated its operations in Uganda as a 51% subsidiary, with the government owning the rest.

1970s and 1980s

1972: BOB acquired Bank of India’s operations in Uganda.

1974: BOB opened a branch each in Dubai and Abu Dhabi.

1975: BOB acquired the majority shareholding and management control of Bareilly Corporation Bank (est. 1928) and Nainital Bank (est. in 1954), both in Uttar Pradesh. Since then, Nainital Bank has expanded to Uttarakhand State.

1976: BOB opened a branch in Oman and another in Brussels. The Brussels branch was aimed at Indian firms from Mumbai (Bombay) engaged in diamond cutting and jewellery having business in Antwerp, a major center for diamond cutting.

1978: BOB opened branch in New York and another in the Seychelles.

1979: BOB opened a branch in Nassau, the Bahamas.

1980: BOB opened a branch in Bahrain and a representative office in Sydney, Australia.

BOB, Union Bank of India and Indian Bank established IUB International Finance, a licensed deposit taker, in Hong Kong. Each of the three banks took an equal share.

1985: BOB (20%), Bank of India (20%), Central Bank of India (20%) and ZIMCO (Zambian government; 40%) established Indo-Zambia Bank (Lusaka).

BOB also opened an Offshore Banking Unit (OBU) in Bahrain.

1988: BOB acquired Traders Bank, which had a branch network in Delhi.

1990s

1990: BOB opened an OBU in Mauritius, but closed its representative office in Sydney.

1991: BOB took over the London branches of Union Bank of India and Punjab & Sind Bank (P&S). P&S’s branch had been established before 1970 and Union Bank’s after 1980. The Reserve Bank of India ordered the takeover of the two following the banks’ involvement in the Sethia fraud in 1987 and subsequent losses.

1992 BOB incorporated its operations in Kenya into a local subsidiary with a small tranche of shares quoted on the Nairobi Stock Exchange.

1993: BOB closed its OBU in Bahrain.

1996: BOB Bank entered the capital market in December with an Initial Public Offering (IPO). The Government of India is still the largest shareholder, owning 66% of the bank’s equity.

1997: BOB opened a branch in Durban.

1998: BOB bought out its partners in IUB International Finance in Hong Kong. Apparently this was a response to regulatory changes following Hong Kong’s reversion to the People’s Republic of China. The now wholly owned subsidiary became Bank of Baroda (Hong Kong), a restricted license bank.

BOB also acquired Punjab Cooperative Bank in a rescue.

1999: BOB merged in Bareilly Corporation Bank in another rescue. At the time, Bareilly had 64 branches, including four in Delhi.

In Guyana, BOB incorporated its branch as a subsidiary, Bank of Baroda Guyana.

BOB added a branch in Mauritius, but closed its Harrow Branch in London.

2000s

2000: BOB established Bank of Baroda (Botswana).

2002: BOB acquired Benares State Bank in Benaras at the Reserve Bank of India’s request.

2002: Bank of Baroda (Uganda) was listed on the Uganda Securities Exchange (USE).

2003: BOB opened an OBU in Mumbai.

2004: BOB acquired the failed Gujarat Local Area Bank, and returned to Tanzania by establishing a subsidiary in Dar-es-Salaam.

BOB also opened a representative office each in Kuala Lumpur, Malaysia, and Guangdong, PRC.

2005: The Reserve Bank of India (RBI), has approved a joint venture between BOB, Bank of Maharashtra (BOM), and Oriental Bank of Commerce (OBC) to set up a bank in Malaysia. The new bank will reside in Kuala Lumpur, which has a large population of Indians. The initial capital required will be US$78 million; BOB will invest 40%, and the other two banks will invest 30% each. The JV is awaiting approval from the Malaysian Central Bank. Bank has built and commissioned its own State-of-the-Art Global Data Centre (DC) in Mumbai for running its centralized banking solution(CBS) and other applications in 1900+ branches across India and 20 other counties where the Bank is operating.

BOB also opened a representative office in Thailand.

2006: BOB established an Offshrore Banking Unit (OBU) in Singapore.

2007: In its centenary year, BOB’s total business crossed 2.09 lakh crores, its branches crossed 1000, and its global customer base 29 million people.

2008: BOB opened a branch in Guangzhou, China (02/08/2008).

2009: Bank of Baroda registered with the Reserve Bank of New Zealand, enabling it to trade as a bank in New Zealand

Popularity: 3% [?]