Bank of Baroda expects retail lending to grow faster

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Bombay : Bank of Baroda (BoB) maintained its expectation of faster growth in retail loans relative to its corporate portfolio this year, with total credit growth expected at 10-12%, Sanjeev Chaddha said, general manager and managing director. BoB advances were up 15.7% year-on-year in the June quarter, with advances to individuals rising 23.2% and corporate loans up 17.3%.

“We had guided credit growth in the system at 10-12%. We want to grow at system level or better while keeping margins intact. Based on current evidence, we grew up better than that. We had a depressed first quarter last year. We could see something better than that,” Chaddha said. “It makes sense to balance the portfolio with faster retail growth. The retail business is split into several segments – home loans, auto loans, education loans. . Even if business lending picks up, retail growth should be faster than business growth,” he added.

Public lender expects to collect bad debts 13,000 crore this financial year, which would improve its cost of credit to 1.25-1.5%. BoB’s asset quality improved to 6.26% at the end of the June quarter from 6.61% in the March quarter. The bank saw a new addition of bad debt worth 3,266 crores in the quarter. “In small loans, we are seeing a steady recovery. The fact that slippages are decreasing shows continued recovery in smaller accounts. This should add to the credit quality. We aim to recover 13,000 crore,” Chaddha said.

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