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    Bank of Baroda Q1 FY27 earnings call

    BANKBARODA
    Financial Services·24 Jul 2026
    Management Summary

    Bank of Baroda reported strong operational performance in Q1 FY27, with double-digit growth in global business, advances, and deposits, alongside robust asset quality and capital adequacy. However, a significant one-time settlement related to the NMC case heavily impacted reported net profit and ROA. Despite this, core profitability remained strong, and the bank outlined proactive capital raising plans and a cautious outlook on future credit growth due to global headwinds.

    Highlights

    5

    • Global business grew by 15.4% YoY to INR 30.5 lakh crore, demonstrating strong overall expansion.

    • Robust advances growth of 17.4% YoY, driven by domestic (16.1%) and international (23.3%) segments, with RAM advances showing significant traction (organic retail 18.4%, agriculture 18.7%, organic MSME 20.3%).

    • Asset quality remained benign with GNPA ratio improving by 29 bps YoY to 1.99% and Net NPA ratio improving by 10 bps YoY to 0.50%, supported by a high Provision Coverage Ratio of 93.28%.

    • Net Interest Income (NII) grew by 9.5%, and operating profit stood at INR 8,127 crores, indicating strong core profitability despite market challenges.

    • Capital Adequacy Ratio (CRAR) improved to 16.30% from 15.8% last quarter, with CET1 at 13.9%, providing a strong buffer for future growth and regulatory requirements.

    Concerns

    4

    • Reported net profit for Q1 FY27 was significantly impacted by a one-time USD 600 million (INR 5,528 crores equivalent) settlement for the NMC case, leading to a reported net profit of INR 1,278 crores.

    • Return on Assets (ROA) for the quarter, post-settlement, was 0.25%, compared to 1.10% without the exceptional item, reflecting the one-off impact on profitability metrics.

    • Treasury income declined to INR 800 crores from INR 2,000-2,200 crores in June 2025, primarily due to market movements and higher G-sec yields, impacting non-interest income.

    • Commission exchange brokerage fee income was down almost 47% YoY, which management acknowledged needs optimization.

    Key financials

    Single quarter

    23 metrics
    1. 01Global Business₹30.50L Cr+15.4%YoY
    2. 02Global Advances Growth17.4%
    3. 03Total Deposits Growth13.8%
    4. 04Operating Profit₹8,127 Cr
    5. 05Net Profit (after settlement)₹1,278 Cr

    Capital allocation

    2
    high confidence
    CategoryHeadline
    M&A

    Deal

    acquisition · Other

    Liquidity

    Liquidity disclosed

    Quarterly average LCR is 127%. The Bank holds a floating provision of INR 2,500 crores. Management aims to maintain LCR around 120% to avoid dragging on income and yield.

    Guidance & targets

    12
    CategoryTargetPriority
    Credit Growth
    Overall Credit Growth
    12-14%
    		High
    Deposit Growth
    Overall Deposit Growth
    10-12%
    		High
    Credit Deposit Ratio
    CD Ratio
    84-86%
    		High
    Profitability
    Net Interest Margin (NIM)
    2.75-2.95%
    		High
    Profitability
    Return on Assets (ROA)
    >1%
    		Medium
    Profitability
    Return on Equity (ROE)
    15-16%
    		High
    Asset Quality
    Credit Cost
    below 0.6%
    		High
    Asset Quality
    Slippages
    1-1.25%
    		High
    Fundraising
    FCNR/MTN/OFCB Mobilization
    4-5 billion USD
    		Medium
    Capital Raise
    Equity Raise
    8,500 crore
    		High
    Capital Raise
    Tier 2 Capital Raise
    6,000 crores
    		High
    Headcount
    Hiring
    7,000 headcounts
    		High

    What to watch in Q2 FY27

    5

    ROA trajectory

    Q2, Q3, and Q4 FY27
    Current0.25% (with settlement), 1.10% (without settlement)
    Target>1%

    Why it matters

    Management expects ROA to be above 1% in subsequent quarters, which is crucial for assessing the bank's underlying profitability post-NMC settlement.

    But definitely this quarter it is below 1%, but we are hopeful that Q2, Q3, and Q4, the ROA would be more than 1%.

    Risks & concerns

    4
    RiskSeverity

    Geopolitical issues and global headwinds

    Management cited global headwinds and geopolitical issues as reasons for not revising credit growth guidance upwards, indicating caution about future economic conditions. — Management acknowledged

    medium

    Uncertainty on future deposit growth

    Management expressed uncertainty about how deposit growth will evolve in future quarters, which influences their conservative credit growth guidance. — Management acknowledged

    medium

    NIM compression

    NIM was impacted (squeezed) because the average asset growth (denominator) was faster than the Net Interest Income (NII) growth. — Management acknowledged

    medium

    One-time NMC settlement impact on profitability

    A USD 600 million (INR 5,528 crores) settlement for the NMC case was fully absorbed in Q1 FY27, significantly impacting reported net profit and ROA for the quarter. — Management acknowledged

    high

    Q&A highlights

    8

    “So that's all part of the terms so we cannot articulate. But as I can say that the settlement amount is quite, I mean, very, I mean, lower as compared to the kind of quantum of claim against all parties in that case.”

    Analysts pressed for more details on the NMC settlement, particularly the rationale for settling without admission of guilt and the specific amount, but management cited confidentiality, indicating a lack of transparency on a significant one-time event.

    asked by Joel Rebello

    3 min read8 chapters

    Detailed Narrative

    01

    Q1 FY27 Financial Performance Overview

    Bank of Baroda reported a global business of INR 30.5 lakh crore for Q1 FY27, marking a 15.4% YoY growth. Global advances grew by 17.4% YoY, with domestic advances increasing by 16.1% and international advances by 23.3%. Total deposits saw a 13.8% YoY growth, with domestic deposits growing 14.7% and domestic CASA deposits by 10%. The bank achieved an operating profit of INR 8,127 crores, reflecting strong core performance.

    02

    Impact of NMC Settlement on Profitability

    The reported net profit for Q1 FY27 was significantly affected by a one-time📎 USD 600 million (equivalent to INR 5,528 crores) settlement related to the NMC group legacy litigation, which was debited to the P&L. This resulted in a net profit of INR 1,278 crores and a Return on Assets (ROA) of 0.25%. Without this exceptional item📎, the net profit would have been INR 5,528 crores, and the ROA would have been 1.10%, with ROE at 16.57%.

    03

    Robust Credit and Deposit Growth

    The bank continued its focus on RAM advances, with organic retail book growing 18.4%, agriculture by 18.7%, and organic MSME by 20.3%. Corporate loans also grew by 15.3% YoY. Domestic deposits grew by 14.7% YoY, and term deposits registered a growth of 17.8% YoY. The domestic CASA ratio stood at 37.72%, which is considered a top quartile number among peer banks.

    04

    Asset Quality and Provisioning

    Asset quality remained robust, with the GNPA ratio improving by 29 bps YoY to 1.99% and the Net NPA ratio improving by 10 bps YoY to 0.50%. The Provision Coverage Ratio (including TWO) was comfortable at 93.28%. The slippage ratio reduced by 25 bps YoY to 0.91%, and credit cost stood at 0.29% compared to 0.55% in Q1 FY26. CRILC SMA 1 and 2 as a percentage of standard advances also significantly reduced to 0.07%.

    05

    Capital Adequacy and Fundraising Plans

    The bank's capital position remained strong, with a CRAR of 16.30% and CET1 at 13.9%. Management announced plans to raise INR 8,500 crores in equity in the medium term by March 2028, and intends to raise INR 6,000 crores of Tier 2 capital this year. These plans aim to support future growth and maintain a healthy capital buffer, with no immediate requirement for capital raise.

    06

    Treasury Operations and NIM

    The Net Interest Margin (NIM) for the quarter was 2.77%, with a yield on advances at 7.37% and cost of deposits at 4.66% (reduced by 12 bps QoQ). Treasury income, however, declined to INR 800 crores from INR 2,000-2,200 crores in June 2025, primarily due to market movements and higher G-sec yields. Management aims to maintain NIM within the 2.75-2.95% guidance band.

    07

    International Operations and Expansion

    International advances grew by 23.3%, and the overseas book constitutes approximately 16-17% of the global book, with a target to increase this to 19-20% in a couple of years. The bank is actively looking to expand its international footprint in multiple geographies, particularly those with strategic sense and FTA linkages. It is also evaluating 3-4 M&A finance deals jointly with foreign banks.

    08

    Workforce and AI Integration

    The bank is expanding its branch network, having added 260 branches last year, and plans to hire approximately 7,000 headcounts in 2026-27. Bank of Baroda is an early adopter of AI, utilizing tools like 'Aditi' and 'Adi' to repurpose its workforce towards more relationship-oriented and productive roles, rather than transactional ones.

    This is an AI-generated summary of a publicly available earnings call transcript.