Bank of Baroda is expecting its loan portfolio to grow at 7-10 per cent during the current fiscal, said Managing Director and CEO Sanjiv Chadha. During the quarter ended September 2021, the state-run lender saw its domestic advances rise by 3 per cent to ₹6,23,368 crore.

Chadha said the bank’s emphasis has been to have a loan growth in line with the industry, but also to focus on having the highest possible underwriting standards and keep margins intaBank of ct.

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

He said the bank’s loan portfolio has been a bit of a chequered one with some segments doing very well and others not so robustly. Its car loans book witnessed a year-on-year growth of 23 per cent and gold loans have increased by more than 30 per cent.

He said the corporate loan book growth has been tepid largely because of the impact of the COVID-19 pandemic, low capacity utilization and liquidity overhang in the system.

Chadha, however, said there is room for optimism in corporate loans going ahead as there are certain segments on the corporate side that are growing very well because of various government steps, including the production-linked incentive schemes and the Golden Quadrilateral Highway Network project.

“Now that we are in the busy season, we expect that the working capital utilisation should be moving up. I think it is usual that when capacity utilisation levels reach a certain level, there is a more broad-based capital investment cycle that gets triggered,” he added.

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

“In the first half, recovery was about ₹8,000 crore to ₹9,000 crore because there were some large NCLT accounts which started getting resolved. We don’t have such large numbers, which are then the second half (of FY2022) but even in smaller accounts, we see recovery happening,” he said.

In the quarter ended September 2021, the lender reported a 24.39 per cent jump in its standalone profit after tax at ₹2,088 crore as against ₹1,679 crore in the corresponding quarter of the previous fiscal.

NII grew by 2.11 per cent to ₹7,566 crore in Q2FY22 as against ₹7,410 crore in Q2FY21. Net interest margins (NIM) improved to 2.90 per cent in the quarter from 2.88 per cent in the same quarter of the previous fiscal.

Gross non-performing assets (GNPAs) improved to 8.11 per cent in Q2 FY22 from 9.14 per cent in Q2FY21.The net NPA ratio stood at 2.83 per cent as compared to 2.51 per cent.

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