India's Bank of Baroda aims to recover 100 billion rupees from bad loans in FY25, CEO says

By Siddhi Nayak

MUMBAI (Reuters) - India's third-most valued state-run lender Bank of Baroda expects to receive 100 billion rupees ($1.2 billion) through bad loan recoveries in the financial year ending March, led by corporate and small-ticket loans, its chief executive officer said on Thursday.

The bank has a couple of corporate accounts under insolvency, which could help it meet the target for recoveries, Debadatta Chand told Reuters in an interview.

Bank of Baroda recovered 10.05 billion rupees from bad debt in April-June, of which a major portion was small-ticket loans, the chief executive said.

At June end, its gross bad loans stood at 308.73 billion rupees, amounting to 2.88% of all loans, lower than 2.92% at the end of March. The lender's net profit for the June quarter rose 9.5% from a year earlier.

Bank of Baroda aims to add 250 branches this financial year and will continue to grow loans to corporates and medium and small enterprises, while trimming the rise in unsecured loans, the CEO said.

It will keep garnering low-cost deposits as it seeks to maintain margins, while improved liquidity and an expected rate cut in the United States should moderate the cost of deposits from October-December, he said.

The state-run bank forecasts a full-year loan growth of 12%-14% and deposit growth of 10%-12%.

The Indian central bank's draft guidelines aimed at enhancing resilience of lenders will see Bank of Baroda's liquidity coverage ratio fall by 12-15 percentage points from 138%, according to the CEO.

For capital, the lender is looking to raise 75 billion rupees through additional tier 1 and tier 2 bonds in this fiscal year, and will hit the market "at the right time", Chand said.

Bank of Baroda may also look to raise a planned 100 billion rupees through infrastructure bonds in the three months to December-end, he said.

($1 = 83.7130 Indian rupees)

(Reporting by Siddhi Nayak; Editing by Mrigank Dhaniwala)