India's Bank of Baroda aims to double balance sheet in five years, CEO says

Bank of Baroda

31/01/2025 09:16

By Siddhi Nayak
       MUMBAI, Jan 31 (Reuters) - Bank of Baroda  BOB.NS ,
India's third-largest state-run lender by assets, aims to double
its balance sheet in five years while gaining market share and
curtailing costs, its chief executive said on Friday.
    "This is a very realistic target," Debadatta Chand said in
an interview in Mumbai. "In the process, we have to ensure that
we do not lose out on the market share (in loans)."
    The size of Bank of Baroda's consolidated balance sheet, or
the total of the capital, assets and liabilities of the lender
and its units, rose 11.5% on-year to 17.91 trillion rupees
($206.76 billion) at the end of 2024.
    Loans given by Indian banks have grown at double-digit
percentages since April 2022, largely led by retail loans.
However, deposit growth has lagged, forcing lenders to either
slow their loan growth or raise more deposits.
    Bank of Baroda hopes to open about 500 new branches over the
next two years, specifically targeting "micro markets", Chand
said, which should help it raise more deposits and disburse
loans.
    Chand said the bank seeks to quicken loan growth to 13%-15%
in the fiscal year 2025-26, against the 11-13% increase it
expects in 2024-25, if easier monetary conditions persist.      
 
    This should help it grow the market share in loans to 6% in
the coming years from 5.5% currently, the CEO said. 
    Meanwhile, deposit growth should accelerate to 13% in
2025-26 from an expected 9%-11% this year, with a focus on
low-cost current and savings inflows, the CEO said.
    HDFC Bank  HDBK.NS , the country's biggest private lender,
said this month that it aims to achieve industry-matching loan
growth next fiscal year, without specifying a number.
    Most other lenders have not disclosed their loan and deposit
growth targets.
    Bank of Baroda will focus on secured retail loans,
particularly mortgage and auto, while being cautious on personal
loans, the CEO said.
    Despite "good traction" for corporate credit, the lender is
not looking to chase growth in that segment as it seeks to
protect margins, which are expected to be in the range of 3.00%
to 3.10% in 2024-25, according to the CEO.
    Its net interest margin, a key gauge of a lender's
profitability, edged down to 3.11% in the December quarter from
3.27% in the previous three months. 
    The bank's third-quarter net profit rose nearly 6% to 48.37
billion rupees, it said on Thursday.
    Shares of the lender are down 11.5% so far in 2025 after
rising 4% last year.
    
    ($1 = 86.6225 Indian rupees)

 (Reporting by Siddhi Nayak; Editing by Mrigank Dhaniwala)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848; Reuters
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