Bank of Baroda Q3 net profit up 4.5% on lower provisioning, margin pressure

Bank of Baroda reports modest profit growth in Q3 FY26 as lower provisions offset pressure on margins from repo rate cut and higher deposit costs

Public sector lender Bank of Baroda’s (BoB’s) net profit rose 4.5 per cent year on year (YoY) to ₹5,055 crore in the third quarter of financial year 2026 (Q3 FY26), aided by lower provisioning and a marginal rise in non-interest income.

 

Net interest income (NII) was flat at ₹11,800 crore in the quarter ended December 2025, compared with ₹11,786 crore a year ago.

 

Net interest margin (NIM) declined by 25 basis points to 2.79 per cent in Q3 FY26 from 3.04 per cent a year earlier. Sequentially, NIMs fell from 2.96 per cent in the quarter ended September 2025 (Q2 FY26).

 

 

The bank’s non-interest income, comprising treasury income, fees, commissions and recoveries, rose 5.9 per cent YoY to ₹3,600 crore in Q3 FY26. Treasury income registered a 15.4 per cent increase to ₹1,080 crore.

 

In a post-results media call, Debadatta Chand, managing director and chief executive officer of BoB, said net profit for Q3 FY26 was marginally higher as provisioning requirements were lower.

 

Provisions for non-performing assets (NPAs) declined sharply by 35.9 per cent YoY to ₹559 crore in Q3 FY26 from ₹871 crore a year ago.

 

Transmission of the 25-basis-point repo rate cut in December and elevated deposit costs, especially for wholesale liabilities, weighed on margins, the bank said. NIMs are expected to improve in the fourth quarter from the current level of 2.79 per cent, supported by higher credit growth. The bank has guided for NIMs in the range of 2.85–3.0 per cent for FY26, Chand said during a virtual media interaction.

 

BoB’s advances grew 14.7 per cent YoY to ₹13.44 trillion in Q3 FY26. Retail advances increased 17.4 per cent YoY, while the corporate loan book expanded 8.1 per cent.

 

Chand said credit growth is expected to be 11–13 per cent, with an upside bias, and deposit growth at 9–10 per cent in FY26.

 

Total deposits grew 10.3 per cent YoY to ₹15.46 trillion. The share of low-cost deposits — current accounts and savings accounts (CASA) — in domestic operations stood at 38.45 per cent at the end of December 2025, down from 39.33 per cent a year ago.

 

Asset quality improved during the quarter, with gross NPAs declining to 2.04 per cent in December 2025 from 2.43 per cent a year earlier. Net NPAs fell to 0.57 per cent from 0.59 per cent in December 2024. The provision coverage ratio (PCR), including written-off accounts, stood at 92.73 per cent in December 2025, slightly lower than 93.51 per cent a year ago.

 

The bank’s capital adequacy ratio (CAR) stood at 15.29 per cent, with Common Equity Tier-1 capital at 12.45 per cent at the end of December 2025. Chand said the current capital adequacy level is comfortable and is expected to rise to about 17 per cent by the end of FY26. BoB has board approval to raise equity capital of ₹8,500 crore, he added.