Bank of Baroda

Dear Stakeholders,

Greetings! it gives me immense pleasure to present the highlights of your Bank's performance during the financial year 2024-25. Details of the achievements and initiatives taken are provided in the Annual Report.

In FY25, the global economy exhibited remarkable resilience, navigating a complex landscape marked by geopolitical tensions, elevated inflation, and financial volatility. Notably, it managed to avert a global recession during the disinflationary process, maintaining steady growth. Despite global uncertainties, Indian economy sustained its growth momentum, supported by consumption, government spending, moderation in inflation and various policy measures supporting market liquidity. The Indian Banking system has been well positioned in terms of robust asset quality, high levels of capital adequacy and robust profitability. However, the banking sector witnessed significant moderation in credit growth and challenges for deposit mobilisation amidst tight liquidity conditions. Amidst this operating environment, the Bank has not only navigated these challenges but has also built a foundation for delivering a sustainable value for our stakeholders by following a calibrated growth path and setting new milestones.

During the year, there has been consistency and stability in the Banks performance in terms of its key metrics including the business growth, profitability and asset quality. As of March 2025, the Bank crossed the milestone of INR 27 lakh crore to reach a level of INR 27.02 lakh crore and the Bank posted the highest ever net profit on standalone basis at INR 19,581 crore and at a consolidated level, it has crossed the INR 20,000 crore level mark to reach INR 20,716 crore. This is in a year when the asset quality touched a 13 year low level with GNPA ratio at 2.26%.

Financial Performance Liability Management

At the industry level, the banking sector has been grappling with challenges in deposit mobilization, amidst rising costs and shifting customer preferences towards higher- yielding investment avenues. To address these challenges, the Bank has implemented a series of strategic initiatives aimed at establishing a sustainable deposit base. Our focus on growing CASA deposits and retail term deposits has been driven by innovative product offerings, value- added services, targeted campaigns, and unique marketing initiatives. To further strengthen our retail proposition, Bank has onboarded the cricket legend Shri Sachin Tendulkar to attract the retail investors by aligning values of trust & excellence and introduced masterstroke savings accounts which offers a range of premium Services. Further, the Bank introduced savings and investment products for varying needs of its customers such as women, youngsters and minors by bundling the deposits with a host of features as per the savings and investment needs of the diverse customers. These efforts have yielded positive outcome with the global

deposits growing at 10.3%, domestic deposits by 9.3% and International deposits by 15.8%. The domestic CASA deposits grew at 6.4% with domestic current deposits at 14.9% and saving deposits at 4.8% which is one of the best among public sector banks. For the first time, the Bank has opened more than 3 lakh current accounts in a year. The domestic CASA ratio stood at 39.97% as of March 2025.

Advances growth with a focus on Retail loans

At the industry level, the credit growth for Scheduled Commercial Banks has declined to 12.1% in FY25 as against a growth of 16.3% in FY24 (excluding merger impact). In line with the industry, the Bank calibrated its credit growth to align with the underlying macro environment and chose the sustainable growth path. The Bank's global advances grew by 12.8% with domestic advances growing by 13.7%. The Bank continued to focus on retalisation of the loan book by growing high yielding Retail, Agriculture and MSME (RAM) loan book. The organic retail loan book of the Bank has grown by 19.4%. Within retail loan segment, Auto loans have grown by 20.3%, mortgages loans by 18.9% and education loans by 15.9%. The organic MSME loan book has grown by 14.2% and Agriculture loan book has also grown by 14.2%. The RAM loans account for 59.6% of the gross domestic credit as of March'25 as against 57.7% as of March'24. The corporate loan book has grown by 8.6% as of March'25.

Strong Asset Quality

The Bank has been maintaining robust asset quality and its GNPA ratio trending down contributed by positive recovery efforts, upgradations, strategic write offs, slowdown in fresh

slippages underpinning the strong underwriting standards. The GNPA ratio as of March 2025 has been at 2.26% and NNPA ratio at 0.58%. Both the GNPA and NNPA ratios are lowest in last 13 years. The credit cost for FY25 has been at 0.47% and slippage ratio at 0.78% reflecting the high quality of the assets. The Provisi?n Coverage Ratio (PCR) stands at 93.29% including TWO and the collection efficiency excluding agricultura stands at 98.54% as of March 2025.

Robust Profitability

In FY25, the Bank recorded the highest ever net profit on standalone basis at INR 19,581 crore. The profitability was driven by non-interest income with higher treasury earnings. The operating environment, marked by pressure on deposit mobilization and rising deposit costs, combined with repo rate cuts flowing in immediately in loan pricing, resulted in muted Net Interest Income growth as interest earnings grew slower than interest expenses as deposit costs remained elevated. The net interest income growth was at 2.1% with interest income growing at 7.8% and interest expenses at 11.6%. The Bank has managed its expenses prudently with its operating expenses growing at 5.7% with employee cost increasing by 5.0% and other operating expenses increasing by 6.7%. The cost to income ratio has been at 47.94% in FY25 as against 47.71% in FY24. The operating profits increased by 4.7% to INR 32,435 crore. With a decline in provisions on account of improved asset quality and lower tax provisions resulted in the net profit rising by 10.1% to touch a level of INR 19,581 crore for FY25. The Bank has consistently reported a Return on Assets (ROA) of above 1% at 1.16% in FY25. The Return on Equity (ROE) has been at 16.96% in FY25.

Capital Adequacy

The Bank's capital position has strengthened during the year with the CRAR of the Bank touching a level of 17.19% as of March 2025 with CET-1 ratio at 13.78% and Tier-ll capital at 2.40%. The Bank has a healthy Liquidity Coverage Ratio (LCR) of approx. 123%. The Bank has declarad a dividend of INR 8.35 per share, subject to requisite approvals.

Strong Governance - with Respect as a core Value

Bank believes that corporate governance is not just regulatory requirement but there is a generic connection among the organization of business, corporate responsibility and shareholder's wealth maximization. The Bank has infused the philosophy of corporate governance into all its activities. On the Bank's 117th Foundation day, to recognise and value the inherent worth and dignity of every employee, the Bank has added a new core valu? "Respect" along with its existing core val?es of Integrity, Customer Centricity, Courage, Passionate Ownership, Innovation and Excellence.

Phygital branches - yet another innovative way to banking services

To enhance customer accessibility and service, the Bank has expanded its physical presence by adding 188 branches during the year, thereby broadening its reach. Complementing this, the Bank operates a vast network of 9,316 ATMs and 1,671 Cash re-cyclers, offering a wide array of banking Services.

Additionally, the Bank introduced ‘phygital' branches— integrating the best of digital and physical banking— to provide a more seamless and convenient banking experience to further enrich the customer experience. To date, the Bank has inaugurated nine such branches. Moreover, the Bank has strategically realigned its zonal structure, creating four new zones: Guwahati, Bhubaneswar, Ludhiana, and Raipur to improve customer service, enhance operational efficiency, and drive sustainable business growth. Beyond these touchpoints, the Bank has a robust network of 48,120 Business Correspondents (BCs) across the country.

Customer Experience and Building Technology for the Future

In the evolving banking landscape around the fast changing technology, our unwavering focus remains on our customers, our commitment to enhancing customer experiences and obtaining increased share of their wallet through innovations and technology.

The Bank is increasingly digitalising its service delivery by accelerating digital transformation with the changing customer behaviour tending towards digital banking. The Bank has introduced GenAl powered virtual relationship manager ‘Aditi' which offers conversational 24/7 multilingual support through audio, video and chat based assistance. Bank has also launched GenAl powered chatbot ‘ADI' to improve digital customer experience and get the required queries solved through chatbot . The Bank has also introduced Baroda e-pay services for faster and safer payments by simplifying the financial journey with seamless payments, quick recharges, and easy bill payments by linking accounts and Rupay Credit cards of any bank. The Bank has been offering digital lending through end-to-end digital journey for various retail, agricultura and MSME loans improving turn around time and ease of banking.

In addition to customer-facing innovations, the Bank has also launched a GenAI-enabled knowledge management platform, ‘GyanSahay.AI' for its employees. This platform provides employees with instant and accurate answers, enabling them to seamlessly handle customer queries and access key operational details more efficiently. With the adoption of GenAl, the Bank underscores its commitment to staying at the forefront of banking innovation and delivering superior customer service in today's digital-first world.

Digital Innovations

Bob e-Pay, a super app, has been launched recently by the Bank for both customers and non-customers. This app simplifies financial journey for the user with seamless payments, quick recharges and easy bill payments by linking account and rupay credit cards of any bank. It is a smart, secure app designed for convenience of the users.

Bank has integrated its Digital Lending Platform with Reserve Bank Innovation Hub's (RBIH) Unified Lending Interface (ULI), 20+ FinTech's and has 100+ digital integrations, for the purpose of land ownership verification, farm yield reports, digital verification, authentication & analysis of bank statement, credit bureau, e-mandate, GST, ITR, Udyam, e-KYC, v-KYC, PAN, e-stamping / e-signing, etc.

The achievements on our digital banking initiatives highlight our commitment to delivering world class and secure banking Services, ensuring the safety and trust of our customers and making technology our key competitive differentiator.

Sustainability

During FY25, Bank has accelerated its journey toward sustainability and green finance reaffirming its unwavering commitment to building a greener, more responsible future. The Bank has a Board-approved Environmental, Social and Governance (ESG) Policy that guides decision-making, ensures compliance, manages risks, attracts investments, and improves accountability. Key objectives inelude promoting sustainable banking practices, integrating ESG principies into decision-making, aligning with international sustainability frameworks, and mitigating ESG risks. The Policy is supported by a strong governance framework, featuring a Board-level and Executive-level CSR & Sustainability Committees at the top and Zonal ESG Committees at the field level.

In alignment with national climate goals, the Bank has set an aspiration for achieving Net Zero by 2057, coinciding with the celebration of the 150th year of the Bank's foundation day. The Bank has launched various initiatives under the ambit of "bob earth", reaffirming its dedication to protecting and preserving nature for future generations. To further strengthen our green finance initiatives, Bank is conducting impact assessment for the projeets eligible under the RBI's Green Financing Framework, ensuring rigorous assessments for proposals within these sectors.

During the financial year, the Bank launched the "Baroda Mahila Swavalamban Scheme," aimed at providing seamless institutional creditto women entrepreneurs. Furthermore, the Bank is actively supporting sustainability-linked initiatives, including renewable energy, waste management and electric mobility. The Bank has also placed significant emphasis on Green Deposit Scheme, further solidifying its leadership in promoting environmentally responsible banking solutions. The Bank became a signatory to the Partnership for Carb?n Accounting Financi?is (PCAF), joining a global effort to standardize the methodology for measuring and disclosing greenhouse gas (GHG) emissions linked to loans and investments.

The Bank has implemented various initiatives to reduce emissions, conserve energy, and minimizewaterconsumption. A key focus area has been the reduction of carbon emissions. Currently, around 274 branches are powered by solar energy, resulting in reduced power consumption and significant reductions in carbon dioxide emissions.

The Bank's sustainability efforts are recognized, with the ESG Rating, by ESG Risk Analysis & Insights, an Acuite Group Company, improving from Adequate to Strong, showeasing that the efforts are in the right direction.

Further, the Bank has unveiled the "bob earth Webspace" (https://www.bankofbaroda.in/bob-earth)" , a dynamic and transparent public platform designed to showease the Bank's sustainabilityambitions, highlighting ongoing ESG progress, featuring green product offerings, sharing real-time data and impactful stories-underscoring the Banks commitment to accountability, innovation, and a greener future.