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.