Loan growth coming from sectors with govt intervention; expect NIM to improve by 10 bps in FY22: BoB

"Over the last few quarters, we have seen that the retail segment growth has been faster than the corporate segment. I think that is still likely to continue for a little more time. When it comes to the corporate loan growth, it has been in state companies which have borrowed more, particularly state government enterprises and also in sectors which have been supported by specific government interventions," he said.

Asset quality issues have been washed out; expect credit growth to improve, says JPMorgan’s Saurabh Kumar

On home loan offtake, Chadha said that it's been good. He has seen it in metros mainly.

"Home loan growth has picked up; there were incentives which came in from various states in terms of stamp duty. So, I think the offtake of home loans particularly in large metro markets, and also in the in the broader category has been very good," he mentioned.

Chadha added that net interest margin (NIM) for the bank is expected to improve by 10 bps on a year-on-year (YoY) basis in FY22.

"Even while there has been pressure on yields, we have been able to protect our margins. Even last year, our margins had been steadily improving and we expect this year also our NIM will possibly move up by 10 basis points (bps) or so," he said.

Also Read: Most EMs to do well; India macro factors important: Port Shelter Investment

On credit cost, he said that he expects it to decline in the coming quarters. In the past, it was well above 2 percent, however going ahead, he expects it to be lower.

"There has been a benign credit cycle, which has been gathering pace over the last one to one-and-a-half years. Credit costs have been coming down steadily, and we should see this trend becoming more pronounced in the coming quarters," he said.

Chadha explained, "Credit cost had moved well above 2 percent over the last few years, and we had guided that this year, we expect credit cost to be below 2 percent and this is despite the second wave. So credit costs are likely to be well below 2 percent; And we expect that this improvement is likely to continue into the new financial year."

On the competition front,  Chadha said that banks right now are flushed with liquidity. So competition for well-rated companies is pretty tough. "I think banks are looking for opportunities to grow their book. So in fact, the competition is very stiff, particularly when it comes to the well-rated corporates," he explained.