Bank of Baroda, India’s third-largest public sector bank by assets, has set an ambitious goal of doubling its balance sheet within the next five years. The bank also aims to expand its market share while keeping costs under control, according to its Chief Executive Officer, Debadatta Chand.
Targeting Growth Without Losing Market Share
Speaking in an interview in Mumbai, Chand expressed confidence in achieving this target. “This is a very realistic goal. While working towards it, we must ensure that we do not lose our market share in loans,” he said.
As of December 2024, the bank’s consolidated balance sheet—comprising total capital, assets, and liabilities—grew by 11.5% year-on-year, reaching ₹17.91 trillion ($206.76 billion).
Loan and Deposit Growth Strategy
Indian banks have witnessed strong double-digit loan growth since April 2022, mainly driven by retail loans. However, deposit growth has been slower, making it challenging for lenders to maintain their lending pace.
To tackle this issue, Bank of Baroda plans to open 500 new branches over the next two years, focusing on “micro markets.” The bank expects this expansion to boost deposit collection and support its lending operations.
For the financial year 2025-26, the bank is targeting a loan growth rate of 13-15%, compared to the 11-13% growth expected in 2024-25. If economic conditions remain favorable, this strategy will help Bank of Baroda increase its loan market share from 5.5% to 6%.
On the deposit side, the bank expects growth to rise from 9-11% in 2024-25 to 13% in 2025-26. The focus will be on low-cost current and savings accounts (CASA), which help improve profitability.
Cautious Approach to Lending Segments
While Bank of Baroda plans to increase secured retail loans, particularly in the home and auto loan segments, it will take a cautious approach to personal loans.
Despite strong demand for corporate loans, the bank will not aggressively pursue this segment, as it seeks to maintain its profit margins. The bank expects its net interest margin (NIM)—a key measure of profitability—to remain in the 3.00-3.10% range in 2024-25.
In the December 2024 quarter, the bank’s NIM fell slightly to 3.11% from 3.27% in the previous quarter.
Financial Performance and Stock Market Trends
Bank of Baroda reported a 6% increase in net profit, reaching ₹48.37 billion ($558 million) in the third quarter of 2024.
However, its stock performance has faced challenges. So far in 2025, the bank’s shares have declined by 11.5%, after rising 4% last year.
Competition in the Banking Sector
HDFC Bank, India’s largest private lender, recently announced plans to achieve industry-matching loan growth in the next fiscal year but did not specify a target. Other major lenders have yet to disclose their loan and deposit growth projections.
With its expansion strategy and focus on key lending segments, Bank of Baroda is positioning itself for long-term growth and market dominance in India’s competitive banking sector.
