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View Risks →Bank of Baroda — Q2 FY26
Bank of Baroda reported a strong Q2 FY26 with net profit of INR 4,809 crore, up 6% sequentially, despite a one-off recovery in the base quarter.
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Bank of Baroda reported a strong Q2 FY26 with net profit of INR 4,809 crore, up 6% sequentially, despite a one-off recovery in the base quarter. Asset quality improved to best-ever levels: gross NPA at 2.16% and net NPA at 0.57%. NIM expanded 5 bps sequentially to 2.96% driven by prudent liability management, with cost of deposits declining to 4.91%. Domestic advances grew 11.5% YoY, led by RAM segments (retail +17.6%, agri +17.4%, MSME +13.9%). Corporate loan growth was muted at 3% YoY but management expects 10-11% growth in H2. Guidance includes NIM in 2.85-3% range, slippage at 1-1.25%, and credit cost below 0.75%. Key risk: elevated treasury volatility could pressure operating profit.
बैंक ऑफ बड़ौदा ने दूसरी तिमाही में 4,809 करोड़ रुपये का शुद्ध लाभ कमाया, जो पिछली तिमाही से 6% ज्यादा है। बैंक के खराब कर्ज (NPA) का स्तर सबसे कम हो गया है - कुल खराब कर्ज 2.16% और शुद्ध खराब कर्ज 0.57% रहा। बैंक की ब्याज आय (NIM) 2.96% हो गई, क्योंकि जमा पर ब्याज दर घटकर 4.91% आ गई। देश में कर्ज 11.5% बढ़ा, खासकर खुदरा, कृषि और छोटे व्यवसायों को ज्यादा कर्ज दिया गया। कंपनी को उम्मीद है कि आगे NIM 2.85-3% और खराब कर्ज 1-1.25% के बीच रहेगा। सरकारी बॉन्ड की कीमतों में उतार-चढ़ाव से मुनाफा प्रभावित हो सकता है।
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Gross NPA Ratio
2.16%
-34 bps YoY
Improved 34 bps year-over-year to 2.16%, reflecting best-ever asset quality.
Net NPA Ratio
0.57%
-3 bps YoY
Below 1% at 0.57%, an improvement of 3 bps YoY.
CASA Ratio
38.42%
Flat YoY
CASA ratio remains at 38.42%, one of the top quartile among peers.
Slippage Ratio
0.91%
-16 bps YoY
Reduced 16 bps YoY to 0.91%, indicating improving asset quality.
What Changed vs Last Quarter
NEW
Slippage ratio guidance of 1% to 1.25%
Management maintains slippage guidance at 1% to 1.25% for FY26, considering potential geopolitical headwinds.
NEW
Credit cost below 0.75% for FY26
Credit cost expected to remain below 0.75% for the full year, with current levels much lower.
UPDATED
Corporate loan growth of 10-11% in H2 FY26
Management expects corporate loan book to grow 10-11% in the second half, driven by strong pipelines and seasonal pickup.
UPDATED
Global NIM guidance of 2.85% to 3% for FY26
Net interest margin expected to be in the range of 2.85% to 3% for the full year, with Q3 range-bound and Q4 improvement.
DROPPED
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.
DROPPED
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.
NEW RISK
Treasury income volatility
Treasury profit declined ~50% YoY due to bond yield movements, and further rate cuts could impact operating profit.
NEW RISK
ECL transition impact on credit cost
Implementation of ECL framework could increase credit cost by 20-25 bps on a steady-state basis, though management sees manageable impact.
NEW RISK
Corporate loan growth dependency on H2
With only 3% YoY corporate loan growth in H1, achieving 10-11% full-year guidance requires strong H2 pickup, which may be challenged by muted demand.
NEW RISK
MCLR repricing risk on NIM
Further MCLR cuts could compress NIM if deposit costs do not moderate proportionately, though management expects range-bound NIM.
RISK GONE
Further NIM compression from asset repricing
With 50bps repo rate cut in June, full impact on EBLR-linked loans will be felt in Q2, potentially pressuring NIM further.
RISK GONE
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.
RISK GONE
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.
RISK GONE
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.
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q1 FY26, Q2 FY25, Q4 FY25
Management aims to grow corporate book at 9%-10% for the full year, despite muted Q1 growth of 4.2%.
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.
Mentioned in Q1 FY26, Q4 FY25
With 50bps repo rate cut in June, full impact on EBLR-linked loans will be felt in Q2, potentially pressuring NIM further.
Fast read
Guidance and risk preview
Management expects corporate loan book to grow 10-11% in the second half, driven by strong pipelines and seasonal pickup.
Treasury profit declined ~50% YoY due to bond yield movements, and further rate cuts could impact operating profit.
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