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Bank of Baroda Ltd — Q4 FY26
Bank of Baroda reported a strong Q4 FY26 with net profit of ₹5,616 crore (up 11.2% YoY), the highest ever quarterly profit.
bullish
high
✓ Verified against BSE filing
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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.
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Sticky deposit costs pressuring NIM
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Global Business Volume
₹30.78 lakh cr
+13.9% YoY
Crossed milestone of ₹30 lakh crore; driven by strong advances and deposit growth.
CASA Ratio
38.9%
+45 bps QoQ
Improved sequentially; focus on low-cost deposits continues.
Slippage Ratio (Q4)
0.89%
-11 bps YoY
Reduced YoY; asset quality remains robust.
Credit Cost (FY26)
0.46%
-1 bps YoY
Well within guidance; excluding floating provision would be 0.34%.
What Changed vs Last Quarter
NEW
Loan growth guidance raised to 12-14% for FY27
Upsized from earlier 11-13% due to strong performance, subject to global headwinds.
NEW
Deposit growth guidance raised to 10-12% for FY27
Upsized from 9-11% reflecting improved deposit mobilization.
NEW
NIM guidance of 2.75-2.95% for FY27
Conservative range accounting for sticky deposit costs and volatile IT refunds.
NEW
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.
DROPPED
Advances growth 11-13% with upside to exceed 13% for FY26
Management expects full-year loan growth to be in the 11-13% range, with upside potential to exceed 13% given current momentum.
DROPPED
NIM guidance maintained at 2.85-3% for FY26
Net interest margin for the full year is expected to remain in the 2.85-3% band, with Q4 exit likely above 2.85%.
DROPPED
Credit cost guidance revised to below 0.60%
Credit cost for FY26 is now expected to be below 0.60%, down from earlier guidance of below 0.75%, reflecting sustained low slippages.
DROPPED
RoA to remain above 1%
Return on assets is guided to stay above 1% for the full year, consistent with 14 consecutive quarters of >1% RoA.
NEW RISK
Sticky deposit costs pressuring NIM
Cost of deposits likely to remain elevated due to tight liquidity, limiting margin expansion.
NEW RISK
Geopolitical impact on overseas book
Middle East exposure (~₹50-60k cr) and trade disruptions could stress asset quality, though currently benign.
NEW RISK
ECL implementation uncertainty
Final guidelines may increase credit cost; management declined to quantify impact until full computation.
NEW RISK
Aggressive auto loan growth risks
Long-tenor auto loans at competitive rates may face depreciation risk, though current stress is low.
RISK GONE
Margin compression from repricing of corporate loans
Analyst flagged that incremental lending to corporates, NBFCs, and housing at lower yields could compress NIMs despite deposit cost benefits.
RISK GONE
Elevated wholesale funding costs
Management acknowledged that bulk deposit rates remain tight and could pressure margins if asset growth outpaces low-cost deposit mobilization.
RISK GONE
ECL transition impact on credit cost
Analyst raised concern about incremental provisioning under ECL; management estimated 18 bps recurring impact but uncertainty remains on final guidelines.
RISK GONE
LCR decline due to treasury operations
LCR dropped to 116% from 120% QoQ due to sale of investments; management targets 120% but any sustained decline could affect liquidity comfort.
Fast read
Guidance and risk preview
Upsized from earlier 11-13% due to strong performance, subject to global headwinds.
Cost of deposits likely to remain elevated due to tight liquidity, limiting margin expansion.
View Risks →