Summary
Bank of Baroda - Q3 FY 2026 Earnings Call Summary Friday, January 30, 2026
Event Participants
Executives 6 Dr. Debadatta Chand (MD & CEO), Mr. I V L Sridhar (CFO), Mr. Sanjay Vinayak Mudaliar (ED), Mr. Lal Singh (ED), Mr. Lalit Tyagi (ED), Ms. Beena Vaheed (ED)
Analysts 8 Abhishek M. (Individual), Ankit Bihani (Individual), Ashish Agashe (PTI), Joel Rebello (Economic Times), Kunal Shah (Citic), Mahrukh Adajania (Nuvama), Nitin Agarwal (Motilal Oswal), Piran Engineer (CLSA)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Global Advances | ₹11,00,000+ crores | +14.7% YoY; Domestic (+13.6%) and International (+19.3%) saw strongest growth in 8 quarters. |
| Global Deposits | ₹13,00,000+ crores | +10.3% YoY; Driven by 11.1% domestic growth and 8.6% CASA growth. |
| CASA Ratio | 38.45% | -123 bps YoY; Reached top-quartile status among large peers despite systemic liquidity pressure. |
| GNPA | 2.04% | -39 bps YoY; Significant improvement reflecting a benign credit cycle and robust collections. |
| NNPA | 0.57% | -2 bps YoY; Remained stable below the 1% threshold. |
| PCR (incl. TWO) | 92.73% | -63 bps YoY; Management remains comfortable with coverage due to low slippages. |
| Net Profit | ₹5,055 crores | +4.5% YoY; Normalized quarter without one-offs; third time exceeding ₹5,000 Cr in 6 quarters. |
| NIM (Global) | 2.79% | - bps QoQ; Sequential compression due to lack of one-off income tax refunds and wholesale cost pressure. |
| Cost of Deposits | 4.75% | -16 bps QoQ; Prudent liability management kept global/domestic costs below 5% threshold. |
| CRAR | 15.29% | -125 bps QoQ; Impacted by strong credit growth; would be 16.47% if 9M profits were included. |
Geographic & Segment Commentary
- RAM (Retail, Agri, MSME): This segment grew by 17.3% YoY, maintaining its 17-18% growth trajectory. Mortgages (+21%) and Auto loans (+17.4%) were the primary drivers, while Personal Loans grew conservatively at 1.1% QoQ to mitigate risk.
- Corporate Banking: Grew 8.1% YoY with a strong sequential uptick of 4.6% in Q3. Management maintains a ₹75,000 crore pipeline, including ₹45,000 crore in sanctioned but undisbursed loans, targeting 10% YoY growth by FY26 end.
- International Business: Advances grew sharply by 19.3% YoY, though the Credit-Deposit ratio in this segment remains above 100%. Deposits grew more moderately at 5.7% YoY as the bank focused on lower-cost domestic resources.
Company-Specific & Strategic Commentary
- Digital Transformation: The Bank won 4 out of 7 IBA Technology Award themes. Strategic focus remains on a “transformative” architecture to enhance customer experience, including a pilot app for real-time language translation at branches.
- Liability Optimization: Management is actively reducing reliance on high-cost bulk deposits, which now stand at ~19-20% of domestic deposits. The strategy prioritizes low-cost CASA and alternate resources like infra-bonds over volatile wholesale funding.
- Asset Quality Resilience: SMA-1 and SMA-2 accounts (>₹5 crore) improved from 0.39% to 0.36% QoQ. Collection efficiency (ex-Agri) remains robust at 98.6%, supporting the downward revision of credit cost guidance.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Credit Growth | 11% - 13% (with upward bias) | Management expects to exceed 13% given current 14.7% momentum and corporate pipeline. |
| Deposit Growth | 9% - 11% | Consistent with historical range; focus remains on domestic CASA over bulk. |
| NIM (Full Year) | 2.85% - 3.00% | Expects Q4 exit NIM to be higher than 2.85% as deposit repricing benefits accrue. |
| Credit Cost | Below 0.60% | Revised downward from 0.75% due to superior asset quality and low slippages. |
| ROA | >1.00% | Target maintained for the 15th consecutive quarter. |
Risks & Constraints
| Risk | Context |
|---|---|
| Margin Pressure | Elevated wholesale funding costs and the repricing of fine-priced corporate assets may cap NIM expansion in the near term. |
| Resource Mismatch | The 4-5% gap between credit growth (14.7%) and deposit growth (10.3%) necessitates reliance on wholesale markets or bulk deposits. |
| ECL Transition | Management expects a 60 bps impact on CRAR (spread over 5 years) and an 18 bps increase in recurring credit costs under draft ECL guidelines. |
Q&A Highlights
Net Interest Margins (NIM)
- Question: Why did NIMs compress to 2.79% this quarter? (Joel Rebello)
- Answer: Compression was due to the absence of large one-off income tax refunds seen in previous quarters and a lag in wholesale cost repricing. Full-year guidance remains 2.85-3% as retail deposit repricing benefits accrue in Q4 (Dr. Debadatta Chand).
Credit Costs and Provisions
- Question: Why revise credit cost guidance downward? (Ram Kumar)
- Answer: Average credit cost for the last 10 quarters is 0.34%, with this quarter at 0.17%. Given the robust collection efficiency (98.6%) and low SMA levels (0.36%), 0.60% is a conservative ceiling (Dr. Debadatta Chand).
Capital and Fundraising
- Question: Are there plans for fundraising given the dip in CRAR? (Manish Suvarna)
- Answer: The bank has enabling provisions for ₹8,500 crore in equity and a ₹4,000 crore spillover in AT-1/Tier-2 bonds. However, internal accruals will push CRAR above 17% by year-end without a fresh raise (Dr. Debadatta Chand).
Asset Quality & Personal Loans
- Question: Is there a risk of slippages in personal loans used for gold speculation? (Ekta Suri)
- Answer: Personal loan growth was restricted to 1.1% QoQ, targeting only salaried employees. PNPA in this segment actually improved from 4.81% to 4.42% this quarter (Dr. Debadatta Chand).
Key Takeaway
Bank of Baroda delivered a robust Q3 FY26, characterized by its strongest business growth in eight quarters, with global advances rising 14.7% YoY. The performance was marked by high operational consistency, maintaining a net profit above ₹5,000 crore and a Return on Assets (RoA) above 1% for the 14th consecutive quarter. Strategically, the bank is successfully shifting away from high-cost bulk deposits to low-cost CASA (8.6% growth), helping keep the cost of deposits below 5%. While margins faced minor compression to 2.79% due to the lack of one-offs, management upgraded its credit cost guidance to below 0.60% on the back of pristine asset quality (Net NPA at 0.57%). For the remainder of FY26, the bank is positioned to exceed its credit growth guidance of 13% while maintaining a sustainable ROE of 16-18%, provided deposit mobilization keeps pace with lending momentum.
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