Bank of Baroda - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018

Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018

The above financial results have been reviewed by the Audit Committee of the Board and approved by the Board of Directors in their respective meetings held on January 29 2019. The same have been subjected to a limited review by the Statutory Central Auditors of the Bank.

The above results for the quarter ended December 31 2018 have been prepared following the same accounting policies as those followed in the annual financial statements for the year ended March 31 2018.

The financial results for the quarter and nine months ended December 31 2018 have been arrived at after considering provision for Non Performing Assets Standard Assets Standard Derivative Exposures Restructured Assets and depreciation Provision for Investments on the basis of prudential norms and specific guidelines issued by the RBI. As a consistent practice the Bank has made a provision of 20percentage on the Secured Sub standard Advances as against the regulatory requirement of 15percentage. In addition to the above provision is made on non fund based facilities of NPA borrowers by applying 50percentage credit conversion factor CCF. The provision is based on the asset class of the fund based facility of the borrower. Also 100percentage provision is made on certain class of non performing retail advances.

RBI Circular DBOD.NO.BP.BC.1 21.06.201 2015 16 dated July 01 2015 on Basel III Capital Regulations read together with RBI circular no DBR.NO.BP.BC. 80 21.06.201 2015 16 dated March 31 2015 on Prudential Guidelines on Capital Adequacy and Liquidity Standards Amendments requires banks to make applicable Pillar 3 disclosures including leverage ratio and liquidity coverage ratio under the Basel III framework. These details are being made available on our website These disclosures have not been subjected to limited review by the auditors.

As per RBI directions vide Letter No. DBR.No.BO.15199 21.04.048 2016 17 dated June 23 2017 and Letter No. DR.No.BP.1906 21.04.049 2017 18 dated August 28 2017 the Bank during the quarter ended December 31 2018 has reversed Rs 4777 lakhs previous corresponding quarter provided for Rs 657 lakhs due to release of provisions. The Bank holds a total provision of Rs 45616 lakhs previous corresponding period Rs 13567 lakhs in respect of 23 borrower accounts under the provisions of Insolvency and Bankruptcy Code IBC and said RBI Directions.

RBI circular DBR.No.BP.BC.113 21.04.048 2017 18 dated June 15 2018 had granted banks an option to spread provisioning for mark to market MTM losses on investments held in AFS and HFT categories equally up to four quarters commencing with the quarter ended June 30 2018 the Bank has availed the relaxation permitted. An amount of Rs 24848.50 lakhs was carried forward as at the half year ended September 30 2018. During the quarter the overall portfolio of the bank has a positive MTM as at December 31 2018 hence no further provision was required. Accordingly the above circular will not apply to the bank for the quarter.

The Bank has made an additional provision over and above the IRAC norms Policy of the Bank amounting to Rs919.45 crores in certain specific accounts as a conservative approach to provide for the inherent weakness in these accounts

RBI vide Circular no. DBR.No.BP.BC.108 21.04.048 2017 18 dated June 6 2018 permitted banks to continue the exposure to MSME borrowers to be classified as standard assets where the dues between September 1 2017 and December 31 2018 are paid not later than 180 days for their respective original due dates. Accordingly the Bank has retained MSME exposure of Rs 193896 lakhs as standard asset as on December 31 2018. In accordance with the provisions of the circular the Bank has not recognised interest income of Rs 555 lakhs and is maintaining a standard asset provision of Rs 9695 lakhs as on December 31 2018 in respect of such borrowers.

On January 2 2019 the Board of Directors of the Bank and the Board of Directors of Vijaya Bank and Dena Bank at their respective meetings approved amalgamation of Vijaya Bank and Dena Bank with the Bank. The Boards of respective banks have also approved the fair share swap ratio of 402 equity shares of FV Rs2 each of Bank of Baroda to every 1000 shares of FV Rs10 each of Vijaya Bank and 110 equity shares of FV Rs2 each of Bank of Baroda for every 1000 shares of FV Rs10 each of Dena Bank. The Government of India through a gazette notification F.No.1 1 2017 BOA dated January 2 2019 approved the scheme of amalgamation after consulting reserve Bank of India. The bank has already intimated the stock exchanges the above information. The amalgamation will be effective from April 1 2019 subject to statutory regulatory compliances clearances. The proposed transaction does not have any impact on the current financial results for the financial position of the Bank as at December 31 2018.

The Board of Directors and the Shareholders of the bank have approved the Equity Share Purchase Scheme ESPS offer to the permanent employees of the bank subject to approval from regulatory authorities Government of India. The Board and the shareholders have approved offer of 10 crores equity shares to the employees at 25percentage discount of the 2 weeks volume weighted average price of the shares at NSE as at the record date. The record date is yet to be fixed by the bank.

The Bank during the quarter ended December 31 2018 has issued two tranches of BASEL III compliant Tier II bonds viz. Series XVIII & XIX and have raised Rs 971.50 crores & Rs 240 crores respectively.

Provisioning Coverage Ratio is 73.47percentage as on December 31 2018. December 31 2017 68.03percentage

Details of Investor's complaints for the quarter ended December 31 2018 Pending at Beginning 0 Received 210 Disposed off 210 Closing 0.

The figures of the previous period have been regrouped rearranged wherever necessary so as to make them comparable with those of the current period.