Bank Of Baroda Says ‘Well Placed’ To Raise Funds
Bank of Baroda Ltd. is well-placed to make an investment pitch to its equity shareholders. That's according to PS Jayakumar, managing director and the chief executive officer who expects the public sector lender to build on its September quarter performance.
The lender's results in quarter-ended September were an improvement be it in terms of asset quality, revenue, operating profit, and margin despite an exposure to the highly leveraged sectors like telecom.
“There are uncertainties particularly on how the loans given to some telecom companies play out but we are in a good position to articulate a good story and build a case that Bank of Baroda is a growth stock,” Jayakumar said.
The Reserve Bank of India released two lists of companies earlier this year, that have defaulted on their loans and may be sent for the insolvency process.
While the bank has already provisioned for 54 percent of the second list, Jayakumar said it may have to provide another Rs 1,000-1,100 crore if the number of accounts undergoing insolvency increases.
Speaking of the government-owned bank’s credit growth, Jayakumar said that they will meet the projected 12-15 percent growth for the year. “For the industry, growth might not be there due to transition from one type of tax to another, but for us, growth is definitely on the table,” he said.
Currently, Bank of Baroda has a 13.4 percent credit growth on a year-on-year basis. Retail loan book has grown by 26 percent, while home loans have grown by 35 percent, he said.
As many as eight public sector banks have decided to raise capital from the market within four months as part of the Rs 2.11 lakh crore recapitalisation plan, officials with knowledge of the matter told PTI on Sunday.
Watch the full conversation here.