Bank of Baroda continues to beat the industry averages. The bank has carried on with this fashion in the results of March 2010 quarter as well. The bank has succeeded in increasing its loan book at 22% on a y-o-y basis. This is definitely much more than the 17% benchmark laid down by the industry.
BoB has managed to achieve this by using its robust branch network and healthy deposits.
It has enhanced the portion of its current and savings account (CASA) deposits to 35.6% as on March 2010 as against 34.9% last year. As the CASA of the bank improved, so also its net interest margin (NIM) by 12 basis points. The NIM of the bank has gone up to 3.5% at the end of March 2010.
BoB’s management says it has intentions of raising the CASA deposits at a far higher rate than the total deposits. This would help in improvising the bank’s NIM still more.
However bank is of the opinion that a rise in advances should not disturb the bank’s asset quality. As on March 2010, the bank’s NPAs were just 0.3% of the net advances.
BoB also plans to start 400 new branches in this financial year. The expansion of branch network would allow it to increase its portion of low cost deposits.