Bank of Baroda MD sees margins under pressure till Sept, aiming for 3%
This story was originally published at 19:03 IST on 6 May 2025
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MUMBAI - Bank of Baroda expects margins to be under pressure for the first half of the financial year 2025-26 (Apr-Mar), Managing Director and Chief Executive Officer Debadutta Chand said at a post-earnings media conference Tuesday. Chand said the bank aims to keep margins at 3% but will give a full-year guidance for FY26 only in Oct-Dec. The bank's net interest margin stood at 3.02% for the financial year ended March.
The bank has maintained its loan growth and deposit growth guidance for the year. Last quarter, the bank had given a deposit growth guidance of 9-11% and a credit growth guidance of 11-13%. Chand said he would give the full-year guidance in the second half of the current financial year as the loan book could see an uptick then.
"With liquidity back into the market, I think we can upsize that growth by 1-2%," Chand said.
Earlier Tuesday, the public-sector bank said it posted a net profit of INR 50.48 billion for the March quarter, up 3.3% on year. The bank's other income during the quarter went up over 24% to INR 52.10 billion, led by treasury income of INR 15.59 billion, over double the year-ago figure.
As of Mar. 31, the bank's global gross advances grew 12.8% on year and global deposits grew 10.3% on year. Chand said the bank is making continuous efforts to improve its retail, agriculture, and micro, small, and medium enterprises book. This book accounted for 59.6% of the bank's gross domestic credit as of Mar. 31, which is up from 57.7% a year ago. He also said the bank aims to grow the corporate book by 10% but did not give a timeline. The corporate book grew 8.6% on year to INR 4.12 trillion in the reporting quarter.
The bank also saw a sharp rise in its gold loan portfolio. As of Mar. 31, gold loan advances grew 32.3% on year to INR 567.86 billion. "We wish to grow the gold loan book moderately going forward," Chand said.
The bank aims to open 200 branches in the current financial year, the same as it did last year. Chand also said the organisation plans to invest more in information technology, but did not quantify the likely investment.
On the need for capital, Chand said that currently there is no plan to raise capital through equity. The bank's capital adequacy ratio stood at 17.19% as of Mar. 31.
On the bank's exposure to Bhushan Power and Steel Ltd., Chand said the Supreme Court's order has to be respected. On provisioning for the account, he said it was too early to comment. The Supreme Court Friday rejected JSW Steel Ltd.'s INR 197 billion resolution plan for the debt-laden company and ordered its liquidation instead.
On the National Stock Exchange, shares of Bank of Baroda closed 10.1% lower at INR 223.91 on Tuesday. End
Reported by Kshipra Petkar and Sourabh Kumar
Edited by Rajeev Pai
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