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    Bank of Baroda

    BANKBARODA
    Financial Services·14 May 2026
    Management Summary

    Bank of Baroda delivered a strong performance in Q4 FY26 and for the full financial year, reporting record net profits and significant growth in business volumes. Asset quality showed robust improvement, and capital adequacy remained strong. The bank also made strategic moves in capital raising and new business ventures, while prudently managing increased employee costs and acknowledging potential geopolitical risks.

    Highlights

    8

    • Q4 FY26 Net Profit of ₹5,616 crores, registering a growth of 11.2% YoY, which is the highest ever quarterly net profit posted by the Bank.

    • FY26 Net Profit of ₹20,021 crores, which is the highest ever net profit.

    • Global business volume has crossed the milestone of ₹30 lakh crores and stands at ₹30.78 lakh crores, registering the YoY growth of 13.9%.

    • Global advances have grown by 16.2% YoY with domestic advances growing at 14.5%.

    • GNPA ratio has improved by 37 bps YoY and stands at 1.89%, and Net NPA ratio is below 1% at 0.45%, an improvement of 13 bps YoY.

    • Provision coverage ratio including TWO is comfortable at 93.94%.

    • Capital position continues to be strong with CET 1 at 13.16%, Tier 1 at 13.64% and CRAR at 15.82%.

    • Successfully raised ₹10,000 crores through green infrastructure bonds.

    Concerns

    3

    • Employee cost increased by ₹520 crores in Q4 FY26 due to the adoption of new mortality tables for AS-15 retirement liability.

    • Credit cost for Q4 FY26 increased to 0.76% (from 0.44% in Q4 FY25) mainly due to a prudential floating provisioning of ₹1,500 crores.

    • Geopolitical headwinds were acknowledged as a potential risk to global and MSME books.

    Key financials

    Metrics

    15

    Periods

    3

    Headline

    8
    • Global Business Volume
      ₹3.08L Cr
      YoY+13.9%
    • Global Advances Growth
      16.2%
    • Total Deposits Growth
      12%
    • GNPA Ratio
      1.9%
      YoY-0.4%
    • Net NPA Ratio
      45%
      YoY-0.1%

    Q4 FY26

    5
    • Operating Profit
      ₹9,069 Cr
      YoY+11.5%
    • Net Profit
      ₹5,616 Cr
      YoY+11.2%
    • RoA
      1.1%
    • NIM
      2.9%
    • Credit Cost
      76%

    FY26

    2
    • Net Profit
      ₹20,021 Cr
    • RoA
      1.1%

    Capital allocation

    6
    high confidence
    CategoryHeadline
    Dividend

    ₹8.5/share (final)

    M&A

    Green Infrastructure Bond

    Other · closed · Consideration ₹NaN (undisclosed)

    M&A

    BOB's Securities and Giltedge Limited (Primary Dealer business)

    Other · Other · Consideration ₹NaN (undisclosed)

    M&A

    Pension Fund Sponsor

    Other · announced

    M&A

    Baroda Sun Technology

    Other · Other

    Guidance & targets

    12
    CategoryTargetPriority
    Credit Growth
    Loan Growth
    12-14%
    		High
    Deposit Growth
    Deposit Growth
    10-12%
    		High
    Profitability
    NIM
    2.75-2.95%
    		High
    Profitability
    RoA
    >1%
    		High
    Asset Quality
    Slippage Ratio
    1-1.25%
    		High
    Asset Quality
    Credit Cost
    <0.60%
    		High
    Capital Raising
    AT-1 and Tier 2 Capital Raising
    ₹6,000 crores
    		High
    Capital Raising
    Equity Capital Raising
    ₹8,500 crores
    		High
    Disbursement
    ECLGS Disbursement
    ₹12,000+ crores
    		High
    New Ventures
    Pension Fund Subsidiary Operationalization
    6-9 months
    		Medium
    Headcount
    Headcount Addition
    4,000-5,000
    		Medium
    Deposit Mix
    Bulk Deposit Percentage
    <20%
    		High

    ECL Guidelines Impact Quantification

    Next quarter (after implementation).
    CurrentComputing full impact, no specific number yet.
    TargetSpecific quantified impact on credit cost/capital.

    Why it matters

    Crucial for understanding future provisioning and capital requirements and will provide clarity on a significant regulatory change.

    But having issued the final guidelines, it would not be proper to without really running computation transaction wise difficult to say with regard to any quantification. We will do that, but we will do it slightly, once we implement and then have a number, possibly one quarter number coming very clear on that.

    How to verify

    risks_and_concerns[risk='ECL Guidelines Impact']

    Risks & concerns

    5
    RiskSeverity

    Geopolitical Headwinds

    Geopolitical issues, particularly in West Asia, could impact global books and MSME sector, though no immediate impact is seen. — Management acknowledged

    medium

    Liquidity Tightness

    Market liquidity tightness could make cost of deposits sticky, requiring focus on asset repricing to manage NIM. — Management acknowledged

    medium

    Weak Monsoon

    Analyst concern about increasing agriculture NPA due to weak monsoon; management stated Indian agriculture is resilient and it's a normalized slippage. — Analyst downplayed

    low

    ECL Guidelines Impact

    Uncertainty around the final quantified impact of new ECL guidelines, currently being computed. — Management acknowledged

    medium

    Auto Loan Aggression

    Analyst concern about PSU banks' aggressive long-tenure auto loans; management stated their focus on salaried class and benign asset quality. — Analyst downplayed

    low

    Q&A highlights

    7

    “See, there are two factors here. Cost of deposit of growth is marginal. The yield on advances, because there are different basis here. Actually, the cost of deposit has a larger basis compared to the yield on advances. So, consequently, when you translate into a NIM, then it works out different. So, if you look at the growth, it is 2.89% versus 2.79%. But while articulating this stance, again, we say for the full year, it is 2.75 to 2.95%. So, a lot of repricing happening both on the asset liability and that again depends upon the market scenario. What we have seen in the March quarter also a bit of tightness in the liquidities that may prevail this quarter also. So, slightly that is why we are putting a NIM guidance of 2.75% to 2.95%. Saying so, there is also element of the IT refund which also contributed to some extent.”

    Analyst questioned the drivers of NIM improvement given seemingly contradictory trends in cost of deposits and yield on advances, leading to management clarifying the role of market repricing and IT refunds.

    asked by Mayur Shetty

    2 min read6 chapters

    Detailed Narrative

    01

    Record Profitability and Robust Business Growth

    Bank of Baroda achieved its highest ever quarterly net profit of ₹5,616 crores in Q4 FY26, marking an 11.2% YoY increase. For the full financial year 2026, the net profit reached a record ₹20,021 crores. The bank's global business volume surpassed ₹30 lakh crores, standing at ₹30.78 lakh crores with a YoY growth of 13.9%. Global advances grew by 16.2% YoY, driven by strong domestic advances growth of 14.5% and international advances growth of 24.4%.

    02

    Strong Asset Quality Improvement

    The bank demonstrated robust asset quality, with the Gross Non-Performing Asset (GNPA) ratio improving by 37 basis points YoY to 1.89%. The Net Non-Performing Asset (Net NPA) ratio also saw a significant improvement of 13 basis points YoY, reaching 0.45%. The provision coverage ratio (PCR), including technical write-offs (TWO), remained comfortable at 93.94%. Slippage ratio for Q4 FY26 reduced by 11 bps YoY to 0.89%, and for the full year, it reduced by 6 bps YoY to 0.72%.

    03

    Strategic Capital Raising and New Business Ventures

    Bank of Baroda successfully raised ₹10,000 crores through green infrastructure bonds, marking a first in India with strong market response. The bank also made its Primary Dealer (PD) business, BOB's Securities and Giltedge Limited, operational from April 1, 2026, committing ₹2,000 crores in capital. Additionally, approval was received to become a sponsor for a pension fund, with operationalization expected within 6-9 months. These initiatives aim to diversify revenue streams and strengthen the bank's presence in financial markets.

    04

    Updated Guidance for FY27

    For the full year FY27, the bank has upsized its loan growth guidance to 12-14% (from 11-13%) and deposit growth guidance to 10-12% (from 9-11%). The Net Interest Margin (NIM) is projected to be in the range of 2.75-2.95%. The Return on Assets (RoA) is expected to remain above 1%, and the slippage ratio is targeted to be maintained at 1-1.25%. Credit cost is guided to be less than 0.60% for the full year.

    05

    Managing Costs and Liquidity

    The bank incurred an increase in employee costs of ₹520 crores in Q4 FY26 due to the adoption of new AS-15 mortality tables. Despite this, the operating profit grew by 11.5% YoY. The cost of deposits remained sticky at 4.78% for Q4 FY26, and the bank maintains a healthy quarterly average Liquidity Coverage Ratio (LCR) of 127%. The strategy continues to focus on reducing dependency on bulk deposits, aiming to keep them below 20% of total deposits.

    06

    Geopolitical Risks and MSME Sector Resilience

    Management acknowledged geopolitical headwinds as a potential risk, particularly concerning global books and the MSME sector. However, no immediate impact on the bank's numbers or collection efficiencies has been observed. The CRILC SMA 1 and 2 as a percentage of standard advances improved to 0.18% as of March 26, indicating resilience in the MSME sector, supported by government schemes like ECLGS.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.