Bank of Baroda expects loan portfolio to grow 7-10% in fiscal 22

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Bank of Baroda expects its loan portfolio to grow by 7-10% in the current fiscal year, CEO and CEO Sanjiv Chadha said. During the quarter ended in September 2021, the state-run lender saw its domestic advances increase by 3% to reach ??6 23 368 crores.

Chadha said the focus of the bank has been to have lending growth in line with the industry, but also to focus on the highest possible underwriting standards and to maintain the margins in the ct bank. .

“So 7-10% (credit growth) is what we expect the market to develop and that’s where our credit growth will be,” he told PTI during an interaction Wednesday.

He said the bank’s loan portfolio was a bit spotty, with some segments doing very well and others not doing so well. Its auto loan portfolio grew 23% year-on-year and gold loans increased by more than 30%.

He said growth in the business loan portfolio has been lukewarm in large part due to the impact of the COVID-19 pandemic, low capacity utilization and excess liquidity in the system.

Chadha, however, said there is room for optimism in business lending going forward as some segments of the business side are developing very well due to various government measures, including government programs. incentive related to production and the Golden Quadrilateral Highway Network project.

“Now that we are in peak season, we expect the use of working capital to increase. I think it’s usual that when the capacity utilization levels reach a certain level, a larger cycle of capital investment kicks in, ”he added.

On recoveries, Chadha said in the first half of FY22, the bank’s recoveries were around ??8,000 to 9,000 crores. It has a recovery goal of ??14,000 crores for fiscal year 2022.

“In the first half, the recovery was around ??8,000 crores to ??9,000 crore as there were large NCLT accounts which started to be resolved. We don’t have such big numbers, which then is the second half (of fiscal 2022), but even in small accounts we see a recovery happening, ”he said.

In the quarter ended September 2021, the lender reported a 24.39% increase in after-tax profit to ??2,088 crore against ??1,679 crore in the corresponding quarter of the previous fiscal year.

The NII rose 2.11% to reach ??7,566 crore at T2FY22 compared to ??7,410 crores at T2FY21. Net Interest Margins (NIM) improved to 2.90 percent in the quarter from 2.88 percent in the same quarter last year.

Gross non-performing assets (GNPA) improved to 8.11% in the second quarter of FY22, compared to 9.14% in the second quarter of fiscal 21. The net NPA ratio stood at 2 , 83% against 2.51%.

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