India's Bank of Baroda lowers loan, deposit growth guidance for FY25

Bank of Baroda

25/10/2024 14:02

By Siddhi Nayak
       MUMBAI, Oct 25 (Reuters) - Bank of Baroda  BOB.NS ,
India's third largest state-run lender, reduced its credit and
deposit growth guidance for the fiscal year 2024/2025 on Friday,
citing greater competition for garnering funds.
    Indian banks have been reporting double-digit percentage
loan growth over the last few months, helped by healthy economic
growth and urban consumption. 
    Banks have, however, been struggling to raise deposits at
the same pace as many lenders offer higher returns.
    Regulatory measures by the central bank to slow credit
growth and a nudge to lenders to raise deposits has pushed banks
that are unable to boost deposit growth to ease lending.
    Bank of Baroda, which had earlier guided for overall credit
and deposit growth of 12%-14% and 10%-12%, respectively, now
expects to grow loans by 11%-13% and deposits by 9%-11%,
according to CEO Debadatta Chand.
    The bank's domestic gross advances grew 12.5% in the
July-September quarter while domestic deposits were up 7.1%. Its
overseas advances and deposits grew 7.6% and 21.2%,
respectively.
    "Deposits are not growing because the savers' money is going
into capital markets. As we calibrate the loan growth guidance,
we have brought down the deposit guidance as well since we are
mindful of the margin guidance which we have," the CEO told
media. 
   Bank of Baroda seeks to maintain a net interest margin at
around 3.10%-3.15% going forward, against 3.10% in the quarter
ended Sept. 30, assuming the cost of deposits will be lower for
the next two quarters, Chand said.
    
    

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