After reporting a strong yoy performance, public sector lender Bank of Baroda MD & CEO Debdatta Chand revealed that the bank has a 100 per cent aviation provision with regards to the GoFirst bankruptcy case.
The CEO highlighted that the bank would be able to recover the loans fully either through primary or through collateral as the account is highly collateralised. Further, he mentioned that one-third of the exposure is on government guarantee.
Bank of Baroda’s aviation account of GoFirst is estimated to be worth around Rs 1773 crore. The bank had first made a provision of Rs 1200 crore in its second quarter and an incremental provision of Rs 550 crore in its fourth quarter (Q4 FY24).
Four banks including Central Bank of India, Bank of Baroda, Deutsche Bank and IDBI Bank have an exposure of over Rs 6,500 crore to the airline.
bob World App Ban Impact
The veteran banker revealed that after RBI’s ban on bob World App, the bank’s system has been made very robust so that such situations don’t repeat.
He asserted that all gaps have been plugged fully, the bank’s processes are much stronger now and huge audit oversight is going on.
He further added that the bank has witnessed some dip post the ban on its digital app, in terms of the flow of transactions within the bob World app, but now since the ban has been removed the bank hopes to gain back the missing pie in the coming quarters.
Bank of Baroda (BoB) on Wednesday said that the Reserve Bank of India (RBI) has lifted the restriction imposed on it in October last year, which banned the lender from onboarding customers onto the ‘bob World’.
The lender said it will now resume onboarding new customers in the bob World application.
Guidance for FY25
Chand highlighted the bank’s future targets and outlook for FY24-25 during the presser.
He said that the bank’s deposit growth is going to be 10-12 per cent going forward. The bank’s advances is expected to be around 12-14 per cent while the lender’s Roa (Return on assets) which was targeted to be more than 1 earlier, is expected to improve from 1 to 1.10 for the next financial year.
The banker further revealed that the objective of the bank would be to optimise on the CASA side and on retail term deposits.
The bank is expected to see robust growth going forward with strong financials, and asset quality will be the key to that growth, he stated.
