Public Bank of Baroda (BoB) said it was on track to achieve loan growth of 7-10% in the current fiscal year and expects advances to increase by 10-10%. 12% during the 2022-23 financial year. said Director and CEO, Sanjiv Chadha.
In the quarter ended December 2021, the lender’s gross domestic advances increased by 3.36% year-on-year (YOY) to Rs 6,54,315 crore. However, on a sequential basis, domestic loan growth was 5%.
Chadha said in terms of progress, the bank struggled in the first quarter due to the impact of the COVID-19 pandemic, but there was some improvement from the second quarter. .
“We had indicated (at the start of the fiscal year) that we would like to grow our loan portfolio between 7 and 10%, similar to the growth rate of the industry. Our position was to grow according to the industry, but ensuring that don’t compromise on our margins. I think we’re pretty much getting there,” Chadha told PTI.
Looking to next year (fiscal 2023), the bank estimates overall credit growth for the system will be 10-12%. “We might want to aim for loan growth at least at this level or better while ensuring that our margins stay there or better,” he added.
The bank is seeing accelerating growth in core lending products, particularly on the corporate side and home lending, which is the mainstay of retail lending, he said.
In the three months ending December 2021, retail loans increased by 11.13% to Rs 1,28,960 crore. This was driven by year-over-year growth of 46.39% in the personal loan portfolio, 20.54% in auto loans and 13.86% in education loans. The portfolio of home loans recorded a timid growth of 6.57%.
Growth in corporate advances was moderate at Rs 2,90,601 crore in the third quarter of FY2022, from Rs 2,90,368 crore a year ago. On a sequential basis, the book rose 6.42%.
“Going forward, we expect business growth will also start to contribute more significantly, and as part of retail growth, home lending will accelerate,” Chadha said.
The lender’s after-tax self-sustaining profit doubled to Rs 2,197 crore in the quarter ended December 2021 from Rs 1,061 crore in the same quarter last year.
Chadha attributed the profit increase to the healthy growth of 14.38% in net interest income (NII) and 15.50% in commission income.
The Gross Non-Performing Assets (GNPA) ratio decreased from 8.48% to 7.25% and the Net NPA decreased from 2.39% to 2.25%.
The bank expects this improvement in asset quality to continue.
Further slippages during the quarter amounted to Rs 2,830 crore and the recovery amounted to Rs 2,032 crore.
The bank had set a recovery target for the full year of Rs 14,000 crore and it has already achieved it, Chadha said.
The restructuring of the bank under Covid 1.0 and 2.0 amounted to Rs 7,716 crore and Rs 6,732 crore, respectively.
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