 "Bank of Baroda sees loan growth of 7-10% in FY22, to grow 10-12% in FY23")
State-owned Bank of Baroda (BoB) said it is on track to achieve a loan growth of 7-10 per cent in the current financial year and expects advances to grow 10-12 per cent in the financial year 2022-23, its Managing Director and CEO Sanjiv Chadha said.
In the quarter ended December 2021, the lender's gross domestic advances grew 3.36 per cent year-on-year (y-o-y) to Rs 6,54,315 crore. However, on a sequential basis, domestic loan growth stood at five per cent.
Chadha said that as far as advances are concerned, the bank had seen some challenges in the first quarter due to the impact of the COVID-19 pandemic but there has been some improvement second quarter onwards.
"We had guided (at the beginning of fiscal) that we would want to grow our loan book between 7-10 per cent, similar to the industry growth rate. Our stance was to grow as per industry but making sure that we don't compromise on our margins. I think we are largely delivering on that," Chadha told PTI.
As far as next year (fiscal 2023) is concerned, the bank believes that the overall credit growth for the system will be 10-12 per cent. "We might want to target a loan growth at least at that level or better while making sure that our margins remain there or better," he added.
The bank is seeing the acceleration in growth in key loan products particularly both on the corporate side and home loan, which is the mainstay for retail loans, he said.
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In the three months ended December 2021, retail loans grew 11.13 per cent to Rs 1,28,960 crore. This was driven by a y-o-y growth of 46.39 per cent in the personal loan portfolio, 20.54 per cent in auto loans and 13.86 per cent in education loans. Home loan book registered a tepid growth of 6.57 per cent.
Corporate advances growth was muted at Rs 2,90,601 crore in Q3 FY2022, against Rs 2,90,368 crore in the year-ago period. On a sequential basis, the book grew 6.42 per cent.
"Going ahead, we expect corporate growth also to start contributing in a bigger manner and, within retail growth, home loans to accelerate," Chadha said.
The lender's standalone profit after tax doubled to Rs 2,197 crore in the quarter ended December 2021 from Rs 1,061 crore in the same quarter of the previous fiscal.
Chadha attributed this surge in profit to the healthy growth of 14.38 per cent in net interest income (NII) and 15.50 per cent in fee income.
The gross non-performing asset (GNPA) ratio declined to 7.25 per cent from 8.48 per cent and net NPA reduced to 2.25 per cent from 2.39 per cent.
The bank expects this improvement in asset quality to continue going ahead.
Fresh slippages in the quarter stood at Rs 2,830 crore and recovery was to the tune of Rs 2,032 crore.
The bank had set a full-year recovery target of Rs 14,000 crore and it has already achieved it, Chadha said.
The bank's restructuring under Covid 1.0 and 2.0 stood at Rs 7,716 crore and Rs 6,732 crore, respectively.
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