Project finance

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PROJECT FINANCING & CREDIT RISK MANAGEMENT

Parvez Alam

LOGO AREA

Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR +55 32 3836 55 55 +55 32 9685 55 55||www.default.com

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________I am deeply indebted to Prof: Dr. S. K. Matta (faculty of finance) for my successful completion of the project.

ACKNOWLEDGEMENT

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________S.NoSlide NameSlide No.1.INTRODUCTION12.KEY FINANCIAL INDICATORS 23.IBUSINESS PERFORMANCE34.PROJECT FINANCING45.CREDIT RISK MANAGEMENT56.CONCLUSION6

Table of Contents

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________Introduction

Bank of BarodaTypePublic companyTraded asBSE:532134IndustryBanking,Financial servicesFounded20July1908Founder(s)Maharaja Sayajirao GaekwadHeadquartersVadodara(Baroda), IndiaArea servedWorldwideKey peopleS S Mundra (Chairman &MD)ProductsCredit cards,consumer banking, corporate banking,finance and insurance,investment banking, mortgage loans,private banking, private equity,wealth managementRevenue346 billion(US$5.8billion) (2012)Net income52.48 billion(US$880million) (2012)Total assets4.574 trillion(US$76billion) (2012)Websitewww.bankofbaroda.com

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________Key Financial Indicators Sr. No. Particulars 31.03.2009 31.03.2010 31.03.2011 31.03.2012 31.03.2013 1 Interest Income / Average Working Funds (AWF)6.85% 6.59% 7.22% 7.63% 7.78% 5 Non-Interest Income / AWF1.40% 1.12% 1.11% 1.32% 1.42% 6 Operating expenses / AWF2.11% 2.25% 2.04% 1.96% 1.84% 7 Cost Income Ratio46.24% 55.43% 51.30% 50.89% 45.38% 8 Gross (Operating) profit / AWF2.45% 1.81% 1.94% 1.89% 2.22% 9 Net profit / AWF0.72% 0.78% 0.82% 0.93% 1.15% 12 Return on Average Assets0.75% 0.79% 0.80% 0.89% 1.09% 15 Dividend payout Ratio (including Corporate Dividend Tax)24.67%25.11% 24.59% 23.75% 17.22% 16 Credit -- Deposit Ratio55.82% 67.15% 74.35% 77.32% 82.36%

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________BUSINESS PERFORMANCE

ParticularsEnd-March 2013(Rs crore)End-March 2012(Rs crore)Growth %Deposits1,52,034.121,24,915.9821.71- Domestic1,22,479.3599,725.6222.82- Overseas29,554.7725,190.3617.33Borrowings3,927.051,142.56243.71Global Advances: ParticularsEnd-March 2008(Rs crore)End-March 2007(Rs crore)Growth (%)Advances1,06,701.3383,620.8727.60- Domestic84,503.3167,262.6925.63- Overseas22,198.0216,358.1835.70

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________Project financing

Credit processing / appraisalCredit approval / sanction

Credit DocumentationCredit AdministrationDisbursementMonitoring and control of Individual CreditsManaging problem Credits / Recovery

Monitoring the overall credit portfolio (Stress testing)

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________SOURCES OF CREDIT INFORMATION

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________CREDIT RISK MANAGEMENTPrudential ExposureSetting borrower and group limits.Setting industry and sector-wise limits.Setting maturity / tenor limits.Risk RatingEvaluating industry, business, financial and management risk.Identifying standards and critical parameters.Defining rating thresholds for credit decisionRisk PricingMapping expected probability of defaults.Estimating expected loss, based on risk rating and recovery rates.Using RAROC framework to price the credit riskPortfolio ManagementSetting rating-wise limits on exposure.Evaluating industry exposures and assessing concentration of riskProactive provisioning based on expected loss.Portfolio wise test to assess sensitivity to various credit risk factorsLoan Review MechanismIdentifying credit weakness to initiate corrective action.Evaluating portfolio quality to isolate problem area.Assessing adequacy of the loan loss provision.Monitoring compliance with internal policies.Generating top management reporting.

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________CREDIT RATING MODEL OF BANK OF BARODAModules NoCompulsory ParametersRelevant ParametersTotal No Of ParametersMax Marks1.Economy & Industry (comprising of 2 sections)113 (out of 10)14562.Borrowrs position in the industry64 (out of 8)10403.Borrowers financialsAllNil1004.Management quality93 9out of 5)1248

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________

S. No.Scale of ScoreGradeDefinition of Scale185 100 AAAHighest Safety275 84 AAHigh Safety370 74 AAdequate Safety465 69 BBBModerate Safety560 64 BBLow Safety650 59 BHigh Probability of Default or Substandard735 49 CVery high probability of Default or Doubtful80 340 DHighest Probability of Default or loss Asset

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________CONCLUSIONBank of Baroda appraises fresh proposals and re-new old proposals very efficiently and within very limited amount of time

The bank is very prompt in attending to the needs of the customers

Living up to the ideals of the visionaries of the bank, is the strong workforce, which includes dedicated professionals, who have considerable amount of expertise and experience in the banking industry

Armed with only theoretical knowledge in-hand before, the project has been an immense realistic learning experience.

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________Thank You

+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________

LOGO AREA+55 32 3836 55 55 +55 32 9685 55 55Default address Avenue, 4214, Postal code 80.250-210 / Curitiba PR BR www.default.com_____________________________________________________