1

Bank of Baroda“India’s International Bank”

A Bank of Strength, Diversity and Flexibility

2

1.1 Executive SummaryBank of Baroda is one of the most prominent banks in India, having its

total assets as Rs. 714,988.55 Crores as on 31st of March 2015. The bank was founded by Maharaja Sayajirao Gaekwad III (also known as Shrimant Gopalrao Gaekwad), the then Maharaja of Baroda on 20th of July 1908 with a paid capital of Rs. 10 Lacs.

A Premier Public Sector Indian Bank – Govt. of India holding majority stake Uninterrupted Profit every year since inception Global Customer Base : 33+ million Wide reach through over 2850+ branches and over 1100 ATMs in India Global footprints in 24 countries with 104 offices. These 104 offices

comprise of 60 branches of the Bank, 43 branches of its overseas subsidiaries and one representative office, as on 31st Mar, 2015,.

World Ranking – 258, Country Ranking – 4 Bank of Baroda Ranked 21st amongst Best Indian Brands 2014 in Brand Equity

CONCENTRATION (%): DOMESTIC BRANCH NETWORK

Rest of India, 24.0

UP & Uttaranchal, 22.0

South, 11.0 Rajasthan, 11.2

Maharashtra, 11.5

Gujarat, 20.3

3

4

GLOBAL FOOTPRINTS

* USA

* Bahamas

# Trinidad & Tobago

Belgium *

* Oman* Hong Kong

# Uganda # Kenya

South Africa *

* Mauritius

*Seychelles

* Fiji

* Branches=60

# Subsidiaries=43

Representative Offices=1

UK *

# Tanzania

Botswana #

* UAE China

Malaysia

Thailand

Singapore *

Australia

# Guyana Ghana*

Bahrain*

Total Offices - 104

5

PATTERN OF SHAREHOLDING: 31ST MARCH, 2015

FIIs15.9%

Corp. Bodies4.4%

Indian Public5.0% Others

0.5%

Mutual Funds6.5%

Insurance Cos

12.3%

Govt. of India55.4% BOB is a Part of the following Indexes BSE 100,

BSE 200, BSE 500 & Bankex Nifty, Bank Nifty,CNX 100, CNX 200, CNX 500. BOB’s Share isalso listed on BSE and NSE in The ‘Future andOptions’ segment.

Share Capital: Rs. 443.52 croreNo. of Shares: Rs. 443.52 millionNet worth: Rs. 39835.55 crore M. V. per share: Rs. 212.05 B.V. Per Share at Rs.166.83 for FY15Cost-Income Ratio at 43.63% for FY15 Earnings per Share at Rs.15.83 for FY15ROAA at 0.49% for FY15ROE at 9.21% for FY15

6

Strengths Weaknesses• One of the biggest names in Banking.•Variety of Services and Products offered by the bank.•CBS implementation in its Branches.•International presence adds to the credibility.•Great Product Diversification.

•High level of customer satisfaction.

•Lesser number of branches compared to SBI and PNB.•Low Rural presence.•Low market share in the International and Domestic Market with respect to SBI and PNB.•Late Implementation of Finacle.

Q. Do a Strategic Planning exercise for Bank of Baroda in the face of competition from current players and future entries.

I. Mission:

• Mission is to be the Top National Bank with International Standards.• To provide High Quality and Low Cost service.

II. SWOT Analysis

Opportunities Threats• International branches give scope to expand in other Economies.•Expansion in the rural areas to increase volumes.•Potential to penetrate in the urban markets.

•New banking license regulations by RBI.•Foreign banks.•Competition from new banks like Kotak & Yes Bank as well as established banks like SBI and PNB.•Different IT operating platforms in different branches.

7

III. Strategy Formation:

•CBS and IT up-gradation strategy for improving efficiency.

•Increasing international and domestic market share through improving branch

network and implementation of the IT developments.

•Increasing presence in rural markets by providing market specific products and

increasing the number of branches in rural areas.

•Product development in the existing target market of middle class and HNIs and

Corporate.

•Educating the rural markets about the various financial products Bank of Baroda

can offer.

•Offer cost efficient products compared to new entrants in the Banking Sector.

Q 2. HOW WILL YOU DEVELOP A POSITIVE PERCEPTION FOR BANK OF BARODA FOR BOTH URBAN AND RURAL CUSTOMERS?

8

CHALLENGES IN RURAL MARKETING

• Underdeveloped people and underdeveloped markets• Inadequate Media coverage for rural communication• Multi language and Dialects• Traditional Values• Lack of proper physical communication facilities

STRATEGIES FOR RURAL MARKETING

Strategies that may be helpful in improving marketing in Rural Market are listed below:• Product Strategies• Pricing Strategies• Distribution Strategies • Promotion Strategies • Marketing Strategies• Sales Strategies

9

Marketing Strategy:

Bank of Baroda needs to understand the psyche of the rural consumers and then act accordingly. Rural marketing involves more intensive personal selling efforts as compared to urban marketing. To effectively tap the rural market a bank must associate it with the same things the rural folks do. This can be done by utilizing the various rural folk media to reach them in their own language and in large number so that the brand can be associated with the rituals, celebrations, festivals, melas and other activities where they assemble.

10

CHALLENGES IN URBAN MARKETING

The challenges in urban marketing are:

• Urban market flooded with low demand• High degree of competition• Large expenses• Market saturation

 STRATEGIES FOR URBAN MARKETING

A. Capture the youth segment: Bank of Baroda can try to capture the gen Y by introducing new services

B. Personalized Banking: Bank of Baroda should try to build more and better customer relationships. For example they can simply call the customer on his/her birthday and wish him/her. This would add a personal touch.

C. Faster banking services: In metro cities and also the tier 2 cities, time is everything. If Bank of Baroda can provide banking solutions and services faster than their competitors, the can grab a major chunk of urban customers

11

3) HOW DO YOU THINK SBI WILL RETALIATE?

In 2004, India’s largest bank, State Bank of India (SBI), decided to deploy Infosys’s Finacle core banking, e-banking and treasury solutions across its global operations after BOB has implemented same in 2002. The bank was also able to offer more products, roll them out faster, and roll them out globally.

The solution addresses the core banking, e-banking, treasury, wealth management, CRM, and cash management requirements of universal, retail, corporate, community and private banks worldwide.

The solution will enable SBI to streamline and consolidate its technology infrastructure across its global operations apart from providing value added services on par with international banks whereas BOB was lagging behind it.

The State Bank of India won in many ways. They were able to drop costs, while gaining functionality and improving customer service whereas BOB was lagging behind it. It’s a win-win-win for the bank, its product offerings, and its customers.

 

12

This report examines the State Bank of India, the size of the organization, and the businesses it conducts in its domestic market.

State Bank of India has a greater number of branches spread over rural area compared to Bank of Baroda and has a good market share of rural customers. State Bank of India always charge lower interest for Housing loan, which can be an advantage for revenue enhancement.

13

THANK YOU