Bank of Baroda Expands Branch Network and Strengthens Retail, Agriculture, MSME Focus

Bank of Baroda (BoB) plans to open 600 new branches over the next two to three years as part of its goal to double its business (deposits and advances) to ₹48 lakh crore within five years. This expansion aligns with BoB’s strategy to emphasize loans to the retail, agriculture, and MSME (RAM) sectors, further strengthening this portfolio’s share in its loan book.

Debadatta Chand, who assumed the role of MD & CEO of BoB in July 2023, shared that BoB has recalibrated its credit and deposit growth targets for FY25 to better balance its credit-deposit (CD) ratio. With a focus on organic growth, BoB is on track to open 300 branches this year and has already inaugurated 107 of them. The growth strategy also leverages BoB’s extensive branch network, now standing at 8,200 branches, which will support its business expansion over the coming years.

While BoB does not currently plan any acquisitions or mergers, it is pursuing an IPO for IndiaFirst Life Insurance Company and Plans to divest its 98.57% stake in Nainital Bank.

The recalibration of growth targets aims to keep the CD ratio balanced, targeting an 82% ratio by March 2025. As Chand explained, the adjustment considers current market conditions, where credit growth is outpacing deposit growth, ensuring stability in the bank’s CD ratio. BoB’s domestic CD ratio stands comfortably at 81.58%, and its global CD ratio is 83.8%.

BoB’s strategy involves “retailising” its loan portfolio, focusing more on retail, agriculture, and MSME loans, which now make up 58% of its domestic loan book—up 100 basis points since March 2024. BoB plans to raise this to 65% in three years, leveraging its extensive branch network and agent network to reduce dependency on corporate lending, thus enhancing stability and margin consistency.

Source: https://www.thehindubusinessline.com/money-and-banking/bob-to-open-600-branches-strengthen-ram-loan-focus-chief-chand/article68814094.ece