Bank of Baroda expects its loan portfolio to grow 7-10% in FY22

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Bank of Baroda expects its loan portfolio to grow 7-10 percent during the current fiscal year, said Managing Director and CEO Sanjiv Chadha. In the quarter ended September 2021, the state lender’s domestic loans rose 3 percent ₹6.23.368 billion

Chadha said the bank’s focus is on delivering industry-appropriate loan growth, but is also focused on having the highest possible underwriting standards and keeping ct’s margins intaBank.

“So we expect the market to grow at 7-10 percent (loan growth) and that is where our loan growth will be,” he told PTI during an interaction on Wednesday.

He said the bank’s loan portfolio is a little squared, with some segments being very good and others not as robust. The auto loan book was up 23 percent year over year and gold loans are up more than 30 percent.

He said corporate loan book growth has been subdued mainly due to the impact of the COVID-19 pandemic, low capacity utilization and excess liquidity in the system.

However, Chadha said there is room for optimism with corporate lending as there are certain segments on the corporate side that are growing very well due to various government interventions including the production-based incentive systems and the Golden Quadrilateral Highway Network project.

“Now that we are in the high season, we expect that working capital utilization should increase. I think it’s common that once a certain level of capacity utilization is reached, a broader investment cycle is triggered, “he added.

In terms of recoveries, Chadha said the bank’s recoveries were around the first half of FY22 ₹8,000-9,000 crore. It has a recovery target of ₹14,000 crore for FY2022.

“The first half was about recovery ₹8,000 crore to ₹9,000 crore because there were some large NCLT accounts that started to be closed. We don’t have such big numbers that will be the second half (FY 2022), but we’re seeing a recovery even on smaller accounts, ”he said.

In the quarter ended September 2021, the lender reported a 24.39 percent increase in its individual profit after tax ₹2,088 crore on the other hand ₹1,679 crore in the corresponding quarter of the previous financial year.

NII grew 2.11 percent ₹7,566 crore in Q2FY22 versus ₹7,410 crore in Q2FY21. The net interest margin (NIM) improved in the quarter from 2.88 percent in the prior-year quarter to 2.90 percent.

Gross Non-Performing Assets (GNPAs) improved from 9.14 percent in Q2 FY21 to 8.11 percent in Q2 FY22. The net NPA ratio was 2.83 percent versus 2.51 percent.

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