BoB's balance sheet expands, but will investor interest grow?

Bank of Baroda's (BoB) business update for FY25 on balance sheet parameters largely epitomises the problems faced by the banking sector in terms of domestic deposit mobilisation even as growth of advances remains strong.

- Manish Joshi

Sure, the overall loan-deposit ratio (LDR) for FY25 was comfortable at 82% for the second-largest public sector bank in India by market capitalisation. Still, lower deposit mobilisation meant that incremental LDR for the year was elevated at 117%.

The update is broadly in line with the management's guidance for FY25, estimating loan growth at 11-13% and deposit growth at 9-11%. Domestic advances grew by 13.7% year-on-year (y-o-y) to ₹10.2 trillion, led by a robust 19.4% growth in retail loans.

It will be interesting to see the composition of the 9.3% y-o-y growth in domestic deposits to ₹12.4 trillion when the results are announced.