Bank of Baroda targets 10 per cent corporate loan growth in FY27

Bank of Baroda aims to grow its corporate loan book by 10 per cent in FY27 and currently has a Rs 50,000 crore lending pipeline. The bank expects strong demand from renewable energy, steel and cement sectors despite concerns over private capex growth

Mumbai: State-owned Bank of Baroda is aiming to grow its Rs 4.56 lakh crore corporate book by 10 per cent in FY27 and has pegged the current pipeline of such big-ticket lending at Rs 50,000 crore.

Amid concerns over sluggish private capex growth, its managing director and chief executive Debadatta Chand said nearly two-thirds of the proposals continue to be for term loans and the rest for working capital, suggesting strong demand for investment purposes.

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On telecom sector loans, where there is intense speculation over Vodafone Idea’s next moves as part of the revival process, Chand said the right policy measures and coordination among banks and other stakeholders could result in fresh loans.

“Our overall pipeline is Rs 50,000 crore at present. Half of it is sanctioned and yet to be disbursed, while the remaining consists of loan proposals under discussion,” Chand told PTI.

He said there is strong demand from the renewable power sector as well as core sectors like steel and cement for capacity expansion.

In order to ensure that net interest margins remain in the 2.75-2.95 per cent range, the bank will take measures such as realigning the corporate portfolio towards the external benchmark-based lending rate, where it hopes the hardening of yields in the g-sec market will help it secure better spreads.

Chand said the bank will have to work on the yield on advances as it does not expect any relief in the cost of deposits under the current situation.

The bank will continue to look for funding beyond deposits as well in order to manage liabilities, Chand said, adding that the current base is sufficient to meet the requirements.

He said the credit-deposit ratio for the bank has always been elevated compared with state-run peers, and added that it is comfortable operating with the CD ratio in the 81-83 per cent range.

From an asset quality perspective, he said the bank does not have any concerns in its micro, small and medium enterprises portfolio and added that the government-initiated ECLGS scheme will help borrowers.

The floating provision of Rs 1,500 crore made in the March quarter was not created for the expected credit loss (ECL) system, Chand said, asserting that the bank’s current buffers are sufficient to manage the transition requirements.