Bank of Baroda - Prioritising Profitable Growth; Retail Segment To Be Key Growth Driver: Motilal Oswal
Capitalisation level remains healthy; aiming to deliver sustainable RoA of 1% plus and RoE of 16%.
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Motilal Oswal Report
We organised a boardroom event with the management of Bank of Baroda, to discuss the macro-economic environment and the bank’s growth and profitability outlook.
Bank of Baroda is well capitalised to capture incremental growth opportunities, mainly led by retail loans. Meanwhile, the corporate book has been witnessing a healthy recovery, resulting in a gradual pickup in loan growth.
Healthy net interest income growth and a pickup in other income should boost earnings, while margins should remain buoyant after a strong expansion to 3.4% in Q3 FY23.
The current account and savings account mix has moderated after higher growth in term deposits (mainly bulk deposits).
Asset quality continues to improve with net non-performing asset at less than 1%. A lower special mention account book and controlled restructuring provide further comfort on asset quality.
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