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Bank of Baroda — Q1 FY26
Bank of Baroda reported Q1 FY26 net profit of INR 4,541 crore (+1.9% YoY) and operating profit of INR 8,236 crore (+15% YoY).
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Bank of Baroda reported Q1 FY26 net profit of INR 4,541 crore (+1.9% YoY) and operating profit of INR 8,236 crore (+15% YoY). Domestic advances grew 12.4% YoY, driven by RAM (retail +17.5%, agri +16.2%, MSME +13.1%), while corporate loans grew only 4.2%. NIM stood at 2.91% (down 7bps QoQ), supported by a low cost of deposits at 5.05% and CASA ratio of 39.33%. Asset quality remained robust with GNPA at 2.28% and NNPA at 0.64%. Slippages were higher at INR 3,500 crore due to one international account and marginal personal loan stress. Management guided for NIM of 2.85%-3% for FY26, with Q2 still under pressure but improvement from Q3. Key risks include further margin compression from asset repricing and potential stress in the international book.
बैंक ऑफ बड़ौदा ने पहली तिमाही में 4,541 करोड़ रुपये का शुद्ध लाभ कमाया, जो पिछले साल से 1.9% ज्यादा है। परिचालन लाभ 8,236 करोड़ रुपये रहा, जो 15% बढ़ा। देश में कर्ज 12.4% बढ़ा, खासकर खुदरा, कृषि और छोटे व्यवसायों को ज्यादा कर्ज दिया गया। ब्याज दरों से कमाई का अनुपात 2.91% रहा, जो पिछली तिमाही से थोड़ा कम है। बैंक की जमा लागत कम (5.05%) और चालू-बचत खाता अनुपात अच्छा (39.33%) है। खराब कर्ज सिर्फ 2.28% है, जो मजबूत स्थिति दिखाता है। हालांकि, कुछ अंतरराष्ट्रीय खातों और व्यक्तिगत कर्ज में तनाव के कारण नए खराब कर्ज 3,500 करोड़ रुपये हुए। बैंक का अनुमान है कि ब्याज कमाई का अनुपात 2.85% से 3% के बीच रहेगा, लेकिन अगली तिमाही में दबाव रहेगा। मुख्य जोखिम ब्याज दरों में और गिरावट और अंतरराष्ट्रीय कर्ज में तनाव है।
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Further NIM compression from asset repricing
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Domestic Advances Growth
12.4%
+12.4% YoY
Domestic advances grew 12.4% YoY, driven by strong RAM growth.
CASA Ratio
39.33%
+5.5% YoY
CASA ratio stood at 39.33%, one of the highest among large PSU banks.
Cost of Deposits
5.05%
-7bps QoQ
Cost of deposits sequentially reduced to 5.05%, among the lowest in the industry.
Slippage Ratio
1.16%
+1.16% QoQ
Slippage ratio increased to 1.16% due to one large international account slippage.
What Changed vs Last Quarter
NEW
NIM guidance of 2.85%-3% for FY26
Management expects full-year NIM in the range of 2.85%-3%, with Q2 under pressure but improvement in H2.
NEW
Cost of deposits moderation of 15-17bps by September
Management expects cost of deposits to moderate by 15-17bps by September quarter due to repricing of maturing deposits.
NEW
Recovery target of over INR 10,000 crore for FY26
Management expects to exceed internal recovery target of INR 10,000 crore for the full year.
UPDATED
Corporate loan growth target of 9%-10% for FY26
Management aims to grow corporate book at 9%-10% for the full year, despite muted Q1 growth of 4.2%.
DROPPED
Deposit growth guidance of 9-11% for FY26
Deposit growth guidance maintained at 9-11%, with focus on reducing bulk deposit dependency.
DROPPED
NIM expected to be flat YoY in FY26
Management expects full-year NIM to be similar to FY25, with Q1 under pressure and recovery from Q2 onwards.
DROPPED
Slippage ratio guidance of 1-1.25% for FY26
Slippage ratio guidance maintained at 1-1.25%, with actuals trending well below this range.
NEW RISK
International account slippage and resolution uncertainty
A large international account slipped to NPA; resolution under CNC process may take 210 days, with 40% provision already made.
NEW RISK
Potential stress in personal loan and MSME portfolios
Analyst raised concern about rising slippages in personal loan and MSME; management acknowledged marginal increase but downplayed risk.
NEW RISK
Dependence on treasury gains for ROA above 1%
Analyst noted that ROA of 1.03% included substantial treasury gains; without them, maintaining 1% ROA may be challenging.
RISK GONE
MSME slippage uptick
MSME slippages increased by INR 300-500 crore in Q4, though management attributes it to legacy accounts and remains confident in overall asset quality.
RISK GONE
International NIM decline
International NIM fell to 1.97% from over 2% due to repricing of assets in a lower rate environment, impacting global NIM given the large international book.
RISK GONE
Pension amortization overhang
The bank continues to amortize pension liabilities (INR 290 crore remaining), unlike peers who have fully written off, creating a future earnings drag.
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q2 FY25, Q3 FY25
Management maintained credit cost guidance of less than 0.75% for FY25, despite 9M credit cost of 0.47%.
Mentioned in Q3 FY25, Q4 FY25
Deposit growth guidance maintained at 9-11%, with focus on reducing bulk deposit dependency.
Mentioned in Q1 FY25, Q3 FY25
Q2 had a one-off recovery of ~₹350 crore boosting interest income; its absence in Q3 contributed to margin decline.
Fast read
Guidance and risk preview
Management expects full-year NIM in the range of 2.85%-3%, with Q2 under pressure but improvement in H2.
With 50bps repo rate cut in June, full impact on EBLR-linked loans will be felt in Q2, potentially pressuring NIM further.
View Risks →