India’s third-most valued state-run lender Bank of Baroda expects to receive Rs 10,000 crore ($1.2 billion) through bad loan recoveries in the financial year ending March, led by corporate and small-ticket loans, its chief executive officer said on Thursday.
The bank has a couple of corporate accounts under insolvency, which could help it meet the target for recoveries, Debadatta Chand told Reuters in an interview.
Bank of Baroda recovered Rs 1,005 crore from bad debt in April-June, of which a major portion was small-ticket loans, the chief executive said.
At June end, its gross bad loans stood at Rs 30,873 crore, amounting to 2.88 per cent of all loans, lower than 2.92 per cent at the end of March. The lender’s net profit for the June quarter rose 9.5 per cent from a year earlier.
Bank of Baroda aims to add 250 branches this financial year and will continue to grow loans to corporates and medium and small enterprises, while trimming the rise in unsecured loans, the CEO said.
It will keep garnering low-cost deposits as it seeks to maintain margins, while improved liquidity and an expected rate cut in the United States should moderate the cost of deposits from October-December, he said.
The state-run bank forecasts a full-year loan growth of 12 per cent-14 per cent and deposit growth of 10 per cent-12 per cent.
The Indian central bank’s draft guidelines aimed at enhancing resilience of lenders will see Bank of Baroda’s liquidity coverage ratio fall by 12-15 percentage points from 138 per cent, according to the CEO.
For capital, the lender is looking to raise Rs 7,500 crore through additional tier 1 and tier 2 bonds in this fiscal year, and will hit the market “at the right time”, Chand said.
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First Published: Aug 01 2024 | 2:28 PM IST
