Bank of Baroda vs Union Bank of Q4 FY26

BA

Bank of Baroda

Q4 FY26 · Financial Services

Bank of Baroda reported a strong Q4 FY26 with net profit of ₹5,616 crore (up 11.2% YoY), the highest ever quarterly profit. Global business crossed ₹30.78 lakh crore, with advances growing 16.2% YoY driven by retail (17.9%), agriculture (20.7%), and MSME (15.6%). NIM improved to 2.89% (up 10 bps QoQ) aided by IT refunds, though management guided a conservative 2.75-2.95% for FY27 due to sticky deposit costs. Asset quality remained robust with GNPA at 1.89% and NNPA at 0.45%. The bank raised a ₹10,000 crore green infra bond and plans ₹14,500 crore capital raise (equity + AT1/Tier 2) over the medium term. Key risk: geopolitical headwinds could pressure liquidity and asset quality in the overseas book.

Guidance read

Loan growth guidance raised to 12-14% for FY27: Upsized from earlier 11-13% due to strong performance, subject to global headwinds. Deposit growth guidance raised to 10-12% for FY27: Upsized from 9-11% reflecting improved deposit mobilization. NIM guidance of 2.75-2.95% for FY27: Conservative range accounting for sticky deposit costs and volatile IT refunds. Capital raise plan of ₹14,500 crore (equity + AT1/Tier 2): Includes ₹8,500 crore equity by FY28 and ₹6,000 crore AT1/Tier 2 in FY27.

Risk read

Key risks include Sticky deposit costs pressuring NIM — Cost of deposits likely to remain elevated due to tight liquidity, limiting margin expansion.; Geopolitical impact on overseas book — Middle East exposure (~₹50-60k cr) and trade disruptions could stress asset quality, though currently benign.; ECL implementation uncertainty — Final guidelines may increase credit cost; management declined to quantify impact until full computation.; Aggressive auto loan growth risks — Long-tenor auto loans at competitive rates may face depreciation risk, though current stress is low..

Promise ledger

Of 4 tracked promises, management 0 met, 0 close, 4 missed.

UN

Union Bank of

Q4 FY26 · Financial Services

Union Bank of India reported a strong Q4 FY26 with net profit of ₹18,697 crore and recommended a dividend of ₹5 per share. The bank achieved robust business growth, with gross advances up 9.74% YoY and a significant improvement in CASA ratio to 35.21% from 32.51% in September. Management highlighted a strategic shift from bulk deposits to retail term deposits and CASA, reducing bulk deposits by ₹70,000 crore. The bank also created a ₹700 crore contingency provision without impacting profit or capital. NIM compressed to 2.64% due to the December rate cut but management expects stabilization and gradual improvement. Credit cost was low at 23 bps for the year, with guidance of ~1% for FY27. Key risks include potential stress from West Asia disruptions and elevated SMA1 levels, though management sees no material impact yet. The bank targets 13-14% credit growth in FY27 while maintaining asset quality and profitability.

Guidance read

Credit growth target of 13-14% for FY27: Management expects to achieve 13-14% credit growth in FY27, in line with industry trends and better than the 9.74% YoY growth in FY26. NIM to stabilize and improve from 2.64%: Management expects NIM to defend current levels and gradually improve, driven by CASA expansion and better asset-liability management. Credit cost guidance of ~1% for FY27: Management guided credit cost around 1% for FY27, up from 23 bps in FY26, reflecting normalization and prudent provisioning. PSLC fee income to potentially reach ₹1,000 crore: Management indicated that PSLC fee income could return to ₹1,000 crore plus levels in FY27, similar to FY25, after a lower contribution in FY26.

Risk read

Key risks include West Asia geopolitical disruption impact — Ongoing West Asia conflict could stress energy-sensitive sectors and remittance flows, though management sees no material impact yet.; Elevated SMA1 levels — SMA1 loans nearly doubled sequentially, indicating potential stress in the near term, though management attributed it to migration from SMA2.; NIM compression from rate cuts — Further repo rate cuts could compress NIM, though management expects to defend margins through liability mix improvement.; Deposit growth lagging credit growth — Total deposit growth of 2.72% YoY trailed credit growth of 9.74%, potentially constraining future loan growth if not addressed..

Promise ledger

Scorecard data is being built as historical quarters are processed.