BoB to double down on retail in growth push

MUMBAI: Bank of Baroda (BoB), India’s second largest public sector lender by assets, is stepping up on retail loan growth with renewed focus on home loans, tie-ups with auto companies, and a fresh strategy to target corporate account employees with personal loans as it expects a 20% compound annual growth rate to continue at least for the next 3 years, executive director Sanjay Mudaliar said.

The brisk pace in retail loans will mean the proportion of retail in its total loan book could increase to about 32% in the next three years from 27%. Home loans as a percentage of BoB’s loan book are relatively lower at 51% compared to 55% for larger peer SBI. Mudaliar said early success in personal and auto loans meant the bank never stepped on the pedal on home loans but that is now changing.

“We had an experience in home loans, but it was not scaled up to the extent we were looking for. Now with the personal loans coming under pressure, the bank is going slow on digital lending, and with the ups and downs in auto loans, the shift is happening towards home loans,” he said.

Automated credit appraisals from Aadhaar for KYC and new score card models have shrunk turnaround times for home loans, which can help the bank scale up the housing portfolio, he said. “We are not late in the (home loan) game. We have advantage of 8,300 branches…Over 50% branches are in rural and semi urban areas. If you add up urban areas we will be having more than 75% branches in these areas,” Mudaliar said.