Bank of Baroda expects 7-10 per cent growth in its loan portfolio during the current financial year, said Sanjeev Chadha, managing director and CEO. During the quarter ended September 2021, the state-run lender saw its domestic advances grow by 3 per cent 6,23,368 crores.
Chadha said the bank’s emphasis has been on industry-consistent credit growth, but also focused on achieving the highest possible underwriting standards and keeping margins at the bank of CT.
“So, 7-10 per cent (credit growth) is what we expect the market to grow and this is where our credit growth will take place,” he told PTI during an interaction on Wednesday.
He said the bank’s loan portfolio has been a bit volatile, with some segments performing very well and others not so strong. Its car loan book has seen a year-on-year growth of 23 per cent and gold loans have grown by over 30 per cent.
He said corporate loan book growth has been largely sluggish due to the impact of the COVID-19 pandemic, low capacity utilization and liquidity in the system.
Chadha, however, said there is room for optimism in corporate credit going forward as there are sections in the corporate sector that are growing very well due to various government initiatives including production linked incentive schemes and the Golden Quadrilateral highway network project. .
“Now that we are in a busy season, we expect working capital utilization to increase. I think it is normal that when the level of capacity utilization reaches a certain level, a more broad-based capital investment cycle begins.”
On recovery, Chadha said during the first half of FY22, the bank’s recovery was approx. 8,000-9,000 crores. Its recovery goal is 14,000 crore for FY2022.
“In the first half, the recovery was almost 8,000 crore to 9,000 crores because there were some big NCLT accounts which started getting resolved. We don’t have the huge numbers that we have at that time (second half of FY 2022), but even in smaller accounts, we are seeing a recovery.”
In the quarter ended September 2021, the lender reported a jump of 24.39 per cent in its standalone profit after tax 2,088 crore as against 1,679 crore in the corresponding quarter of the last financial year.
NII up 2.11 percent 7,566 crore in Q2FY22 as against 7,410 crore in Q2FY21. Net interest margin (NIM) rose to 2.90 per cent in the quarter, as against 2.88 per cent in the same quarter of the previous fiscal.
Gross Non-Performing Assets (GNPA) stood at 8.11 per cent in Q2 of FY12 from 9.14 per cent in Q2 of FY2011. The net NPA ratio stood at 2.83 per cent as against 2.51 per cent.
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