BoB Q2 profit dips 8% to ₹4,809 cr as non-interest income declines

Bank of Baroda's net profit fell 8.2 per cent in Q2 FY26 to Rs 4,809 crore on lower recoveries; the lender made a Rs 400 crore floating provision ahead of the ECL transition

Public sector lender Bank of Baroda’s (BoB’s) net profit declined by 8.2 per cent year-on-year (Y-o-Y) basis to ₹4,809 crore in the second quarter of financial year 2026 (Q2FY26) amid drop in non-interest income, especially recoveries. It had booked gains for one-off recovery from the corporate account in the year ago quarter (Q2FY25).

 

Bank announced the results after the close of market trading hours. Its shares ended 2.05 per cent higher, closing at ₹278.30 per share on the BSE.

 

The lender’s net interest income (NII) rose by 2.7 per cent to ₹11,954 crore in Q2FY26, compared to ₹11,637 crore in the same quarter ended September 2024 (Q2FY25). Net interest margin (NIM) declined by 15 basis points to 2.96 per cent in Q2FY26 from 3.11 per cent a year ago. However, sequentially, NIM improved from 2.91 per cent in the quarter ended June 2025 (Q1Fy26).

 

D Chand, managing director and chief executive officer, BoB, said NIM is expected to be range bound in the third quarter and pick-up in the fourth. Bank has guided for NIM to be in 2.85-3.0 range for FY26.

 

The bank’s non-interest income, comprising treasury, fees, commissions, recoveries etc., fell by 32.0 per cent Y-o-Y to ₹3,515 crore in Q2FY26. There was a sharp decline in recoveries from written-off accounts to ₹493 crore in Q2FY26 crore from ₹ 2,525 crore a year ago.

 

Going forward, the recoveries would be about ₹750 crore and treasury income would be ₹1,000-1,200 crore in a quarter, Chand said in virtual media interaction after results.

 

The provisions for non-performing assets (NPAs) declined sharply to ₹883 crore in Q2FY26, down from ₹1,733 crore a year ago. Bank has made floating provision of ₹400 crore as preparation for shifting to Expected Credit Loss (ECL) regime from April 2027, he said. The tally of floating provisions is now ₹1,000 crore, according to the financial results statement for Q2FY26.

 

BoB’s advances grew 11.9 per cent Y-o-Y to ₹12.78 trillion in Q2FY26. Its retail advances grew by 17.6 per cent Y-o-Y. However, the corporate loan book expanded by just 3 per cent.

 

Chand said the credit growth is expected to be 11-13 per cent in FY26.

 

The GST reforms has created robust demand for loans in the retail segment including auto and book would grow at 18-20 per cent. The corporate loan book is expected to expand at 10-11 per cent on the back of a sanctioned credit pipeline of ₹40,000 crore and ₹25,000 crore under discussion.

 

Total deposits grew by 9.3 per cent Y-o-Y to ₹15 trillion. The share of low-cost deposits -- current accounts and savings accounts (CASA)-- declined to 38.42 per cent at the end of September 2025, down from 39.52 per cent a year ago.

 

The bank’s asset quality improved, with gross NPAs declining to 2.16 per cent in September 2025 from 2.50 per cent in September 2024. Net NPAs also declined to 0.57 per cent in September 2025 from 0.60 per cent in September 2024. The provision coverage ratio (PCR), including written-off accounts, stood at 93.21 per cent in September 2025 from 93.61 per cent a year ago.

 

The bank’s capital adequacy stood at 16.54 per cent, with Common Equity Tier-1 capital at 13.36 per cent at the end of September 2025.