An Analytical Study on NPA of Bank of Baroda

Abstract

Purpose – Indian Banking sector has been facing the challenge of ever-growing non-performing assets (NPA) for the last 2 decades which adversely impacts the profitability and liquidity of the banks and the economy as a whole. This study has attempted to compare the performance of the Bank of Baroda (BOB) vis-à-vis nationalized banks group and establish the correlation between NPA and financial performance of Bank of Baroda and the nature of the relationship.

Methodology – Bank of Baroda which is 2nd leading public sector bank in India had been selected for this study. Data from 2010-11 to 2019-20 had been collected from secondary sources. For data analysis, the Balance sheet and profit & loss account of BOB were analyzed using various ratios, Gross NPA and Net NPA comparison with nationalized banks has been performed apart from performing a correlation analysis of Gross NPA and Net NPA with net profits.

Conclusion – All nationalized banks including the Bank of Baroda have been facing high NPA during the period of study. Further, it was found that NPA negatively affected the profitability of the Bank of Baroda and is highly correlated with the net profits of the bank.

Originality Value – This research had been conducted specifically focused on Bank of Baroda whereas past researches involving BOB has been generally performed in comparison with other banks or the researches were based on various bank groups but not solely focusing on BOB.