Bank of Baroda Q1FY26 results: Net profit up 1.9%, margins compress

Bank of Baroda's Q1FY26 net profit rises 1.9%, aided by treasury income, while pressure on net interest margin continues

Public-sector lender Bank of Baroda’s (BoB’s) net profit grew just 1.9 per cent year-on-year (Y-o-Y) to ₹4,541 crore in the first quarter of 2025-26 (Q1FY26), aided by treasury income, amid pressure on net interest margin. Sequentially, the net profit fell from ₹5,048 crore.

 

Net interest income (NII) — the difference between interest earned and interest expended — fell 1.4 per cent Y-o-Y to ₹11,435 crore. Net interest margin (NIM) from domestic operations fell to 2.91 per cent in Q1FY26, down from the 3.18 per cent in Q1FY25.

 

“Pressure on NII will continue to be there for the next quarter, because the transition matrix both on the asset and liability side are going to fully realign in the next two quarters. Banks have a lower growth or a negative growth in NII because the cost of deposit will take a bit more time to realign,” said Debadatta Chand, managing director and CEO, Bank of Baroda.

 

 

BoB shares closed 1 per cent lower at ₹243.5 per share on the BSE.

 

Other income, including fees, commission, and treasury earnings, expanded by 88 per cent to ₹4,675 crore in Q1FY26 from ₹2,487 crore a year ago. Treasury gains increased to ₹2,226 crore in Q1 compared to ₹295 crore during the year-ago period. 

 

BoB reported 12.6 per cent Y-o-Y credit growth in overall advances to ₹12.07 trillion. The domestic book grew by 12.4 per cent. While retail advances increased 17.5 per cent, corporate loans saw 4.2 per cent Y-o-Y growth in Q1FY26. Home loans grew by 16.5 per cent.

 

“RAM (retail, agri, and micro, medium, and small enterprises) was at 62.7 per cent because the growth in corporate loan book was very low at 4.2 per cent, which is going to increase in the subsequent quarter. But at the same time, the bank has a plan to grow RAM 65 per cent in the next two-three years,” Chand said.

 

Bank’s domestic deposits expanded by 8.1 per cent Y-o-Y to ₹12.04 trillion. The share of low cost deposits — current account and savings account (CASA) -- stood at 39.33 per cent in June 2025, down from 40.31 per cent a year ago.

 

Going ahead, deposit growth will continue to be around 9-11 per cent. On the credit front, the guidance 11-13 per cent for FY26, said Chand.   

 

The asset quality profile improved with gross non-performing assets (NPAs) declining to 2.28 per cent from 2.88 per cent a year ago. The net NPAs fell to 0.60 per cent from 0.69 a year ago. The provision coverage ratio, including those for write-offs, stood at 93.18 per cent in June 2025.

 

Lender’s capital adequacy ratio stood at 17.19 per cent with the common equity tier I (CET-1) of 17.61 per cent.