Bank of Baroda (BoB) posted its Q3 earnings. The bank reported a 14.38 percent year-on-year (YoY) increase in its net interest income (NII) at Rs 8,552 crore for the quarter ended December 31, 2021. In the corresponding period last fiscal, BoB had posted a NII of Rs 7,477.

The bank reported a net profit of Rs 2,197 crore for the quarter, an over 100 percent YoY increase from Rs 1,061 crore in Q3FY21. Meanwhile, its operating profit stood at Rs 5,483 crore, up 7.85 percent YoY.

In an interview with CNBC-TV18, Sanjiv Chadha, MD & CEO, Bank of Baroda, shed light on its Q3 earnings and outlook.

Chadha expects the same loan growth momentum to continue. He expects a loan growth of 7-10 percent in FY22 for the bank. In fact, going into FY23, he expects double-digit loan growth for the industry. He believes the bank’s loan growth will be at 10-12 percent in the next fiscal year.

"For the current year, we have been guiding that we grow between 7 to 10 percent. Our own sense is next year, we should be seeing double digit loan growth from the industry. So as of now we're looking at about 10-12 percent loan growth for ourselves also," he said.

He added, "If you look at loan growth, it has been about 11 percent in retail and it has been virtually flat in corporate, although sequentially, quarter-on-quarter, corporate also has grown by more than 5 percent. So I think that is really what the story is likely to be even going ahead."

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Detailing the loan book structure, he mentioned that corporate loans are at 50 percent of the book. According to him, the corporate credit cycle is improving. However, he believes that retail loan will still grow faster than corporate loan.

"Corporate is finally growing. It should be possible going ahead as interest rates normalize, both to deliver credit growth and also sustain margins. But nevertheless, overall for us, we expect that retail will continue to grow faster than corporate, because we believe that there is a bit of rebalancing of balance sheet, which will be good for us," he mentioned.

"For us the positive piece is, that the corporate loans are about 50 percent of the balance sheet. Now that the impact of COVID-19 is dissipating, we are seeing that corporate credit cycle improving. So I think this is a trend which is likely to continue." he added.

On net interest margins (NIMs), he said that it is sustainable at current levels.

On credit cost, he said, "The credit cost that we have guided for this year will be somewhere between 1.5 percent and 2 percent."

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For the full interview, watch the accompanying video

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(Edited by : Dipikka Ghosh)

First Published:Feb 7, 2022 11:47 AM IST