Bank of Baroda — Q2 FY26 earnings call

Call held 31 Oct 2025

Management summary

Bank of Baroda reported strong Q2 FY26 results with improved margins, robust asset quality, and strong retail, agriculture and MSME growth. Management remains optimistic about corporate loan pickup in H2 while maintaining disciplined approach to pricing.

Highlights

  • Net profit of ₹4,809 crores for Q2 FY26

  • NIM improved sequentially to 2.96% from 2.91%

  • Strong asset quality with GNPA at 2.16% and Net NPA at 0.57%

  • RAM advances growing at 16.5% average (Retail 17.6%, Agri 17.4%, MSME 13.9%)

  • Floating provision of ₹400 crores made for ECL preparedness

Key financials

  1. Net Profit ₹4,809 Cr +22%YoY
  2. Operating Profit ₹7,576 Cr 0%YoY
  3. Net Interest Margin 3% +5%YoY
  4. Return on Assets 1.1% 0%YoY
  5. Return on Equity 15.4% 0%YoY
  6. GNPA Ratio 2.2% -34%YoY
  7. Net NPA Ratio 0.57% -3%YoY

What they filed

Q1 FY27: revenue up 6.8%, net profit down 47.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue31,902 32,570 32,820 32,866 33,318 +4%33,600 +3%34,514 +5%35,115 +7%
Net profit5,405 5,250 5,447 3,517 5,181 −4%5,501 +5%5,872 +8%1,839 −48%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Loan Growth

  • Total advances growth Loan Growth · FY26 · High confidence 11-13%
    overall, the guidance on the Advances remains the same, 11%-13% growth

    — Dr. Debadatta Chand

Asset Quality

  • Slippage Ratio Asset Quality · FY26 · Medium confidence 1-1.25%
    The Slippage Ratio, we still keep it at 1-1.25%

    — Dr. Debadatta Chand

  • Credit Cost Asset Quality · FY26 · Medium confidence below 0.75%
    Credit Cost below 0.75%, which was the guidance given earlier also

    — Dr. Debadatta Chand

Margins

  • Net Interest Margin Margins · FY26 · Medium confidence 2.85-3%
    On a full year basis, we are still expecting the full year NIM would be somewhere between 2.85%-3%

    — Dr. Debadatta Chand

Segment Growth

  • Corporate loan growth Segment Growth · FY26 · Medium confidence 10-11%
    for the full year we intend to target on something around 10%-11% growth in the Corporate Loan book

    — Dr. Debadatta Chand

  • Retail advances growth Segment Growth · FY26 · High confidence 18-20%
    full year basis I am targeting around 18%-20% growth in the Retail book

    — Dr. Debadatta Chand

Risks & concerns

  • Geopolitical headwinds affecting asset quality

    medium

    Management cited probable headwinds due to geopolitical issues as reason for maintaining conservative credit cost guidance

    Cautious

  • Corporate loan growth lag affecting overall growth

    medium

    Corporate loan growth at 3% YoY, management expects pickup in H2 with ₹40,000 crores pipeline

    Confident

  • Interest rate transmission lag affecting margins

    low

    Asset repricing lag vs deposit repricing, but management demonstrated ability to manage through improved NIM

    Managed

Q&A highlights

3 direct
Corporate loan growth outlook Direct
Q3 and Q4 will be much better than the quarters that you are talking about, Q1 and Q2. This is one. Secondly, with the measures taken, I think the demand would come back into the market

Management confident about H2 corporate loan recovery

Asked by Joel Rebello (Economic Times)

NIM trajectory and margin outlook Direct
What we feel for Q3, the NIM would be a range bound kind of a number. It will pick up in Q4

Clear guidance on margin recovery timeline

Asked by Joel Rebello (Economic Times)

ECL provisioning strategy Partial
we are mindful that we need to increase this before going forward... run up to the implementation date, that is 1st April, 2027

Bank preparing for ECL implementation with floating provisions

Asked by Piyush Shukla (Hindu Business Line)

Auto loan demand post GST cuts Direct
post GST announced... we are almost seeing 25% increase in disbursement vis-à-vis the same period last year

Quantified impact of government policy on loan demand

Asked by Ashwin Manikandan (Reuters)

1 min read 4 chapters

Detailed narrative

Strong Asset Quality Performance

Bank of Baroda delivered one of its best quarters on asset quality metrics with GNPA improving to 2.16% from 2.50% YoY, Net NPA at 0.57%, and slippage ratio at 0.91%. Fresh slippages of ₹2,669 crores were lower than both Q1 FY26 and Q2 FY25. Cash recovery and upgradations also showed improvement, reflecting strengthened underwriting processes.

RAM Growth Strategy Driving Performance

The bank's focus on Retail, Agriculture and MSME (RAM) segments showed strong results with average growth of 16.5%. RAM now constitutes 62% of the loan book, up 300 bps YoY. Retail advances grew 17.6% with strong performance across housing (16.5%), auto (17.7%), and personal loans (18.6%). Agriculture segment was a bright spot at 17.4% growth.

Margin Recovery Through Smart Liability Management

Despite rate transmission challenges, NIM improved sequentially to 2.96% from 2.91% through effective liability management. Cost of deposits reduced to 4.91% from 5.05% in the previous quarter. The bank managed to achieve positive NII growth, reversing previous quarter's decline.

Corporate Loan Strategy and H2 Outlook

Corporate loan growth of 3% YoY reflects management's disciplined approach to pricing in a competitive market. With ₹40,000 crores in undrawn sanctions and ₹25,000 crores in pipeline, management is confident of 10-11% full year growth. Sequential quarterly growth of 8% shows improving momentum.

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