BoB’s slippages will decrease by next quarter: Sanjiv Chadha


Sanjiv Chadha, Managing Director (MD) and Chief Executive Officer (CEO), Bank of Baroda (BoB), talks about the quarterly results and what led to the fall, asset quality and the bank’s loan book among others during a conversation with Anurag Shah, Zee Business. Edited Excerpts: 

The quarter results are quite disappointing with a loss of Rs1,400 crores. Is this a result of the clean-up process or it will require more time to turn positive?
These results are in line with the expectations. We had earlier informed the investors and the stock exchanges that the divergence that was reported by the Reserve Bank of India (RBI) would increase the number of non-performing assets at our end. There was some difference between the assessments between RBI and Bank of Baroda, which prompted us to go for provisioning. 

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Do you feel that it will have an impact on the asset quality in future or this was the last stage?
Our slippage ratio is likely to come down in the coming quarter and next year and this will lead to an improvement in our results and the profits shall increase. 

What is your view on the overall credit outlook of the bank amid existing situations and has the existing economic conditions had turned you cautious? 
The current conditions are promising for Bank of Baroda. The situation is providing three conditions to us and they are 
(i) Merger process in the corporate sector has been completed.
(ii) Several banks are not ready to lend to the corporate sector.
(iii) We are also getting an opportunity to work with NBFCs and we shouldn’t let it go or slip. 

BoB’s retail loan book has been a good one in the auto sector as you have grown by 40% in the segment and same is the case in the housing sector. So, do you think those who are not able to get a loan from NBFCs are reaching you or things are happening under some new strategy the bank has adopted? 
Both – people not able to get loans from NBFC and new Strategy – can be a reason. (i) the banks will regain the market share that it earlier lost to NBFCs and (ii) every bank adopts a strategy and find out a sector to whom they can lend under the prevalent conditions with a feeling that our customers are interested in it and can also afford it. And, you have correctly said that Bank of Baroda has reported a 43% growth in the car loan segment in last one year. Similarly, the unsecured loan that is offered to our depositors has also grown by 29%. Home loan has gone up by 10% but it decreased as there was a reduction in pool purchases. Now, the doubts have been cleared and that’s why I think the segment will perform better. Bank of Baroda will be present to support its customers at places where opportunities are available amid good situations. 

The six-month deadline of RBI’s June 7 circulation has come to an end but the bank hasn’t taken any such case to NCLT. Should we feel that haircut is a reason that is creating problems for the banks or the bank is adopting some new strategy for the same?
The process of NCLT, the bankruptcy code is a big achievement for the country and the entire banking system. It has benefitted us and the existing bankruptcy process is running very smoothly. NCLT can’t be a solution to every problem. But its presence has an impact even on those that are not taken to it because those who are taking the loan, as well as the banks, are quite aware that things can be dragged to NCLT if the situation arises. This helps in resolving several issues without reaching such a stage. So, the banks will have to be careful while analyzing the path which is right in the condition that is present at that movement.





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