Bank of Baroda anticipates faster growth in retail loans.

Bank of Baroda (BoB) has maintained its guidance for faster growth in retail loans than in corporate loans this year, with total credit growth expected to be 10-12 percent, according to Sanjeev Chaddha, managing director and chief executive. In the June quarter, BoB’s advances increased by 15.7 percent year on year, with retail advances increasing by 23.2 percent and corporate loans increasing by 17.3 percent.

“We had forecasted 10-12 percent credit growth in the system.” We want to grow at system rates or higher while maintaining margins. On current evidence, we have progressed beyond that. Last year, we had a weak first quarter. We could see something more impressive “Chaddha stated. “It makes sense to balance the portfolio by accelerating retail growth.” Retail is divided into segments such as home loans, car loans, and education loans. The broad-based growth story will continue. Even as corporate loan growth accelerates, retail growth should outpace corporate growth “He continued.

This fiscal, the state-run lender expects to recover bad loans worth 13,000 crore, lowering its credit cost to 1.25-1.5 percent. The asset quality of BoB increased to 6.26 percent at the end of the June quarter, up from 6.61 percent in the March quarter. During the quarter, the bank received new bad loans totaling 3,266 crore. “We are seeing a steady recovery in smaller loans.” Slippages are decreasing, indicating that smaller accounts are still recovering. This should improve credit quality. “We hope to recover 13,000 crore,” Chaddha said.