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Bank of Baroda reported a mixed Q1FY27 performance

ICICIdirect Research 27 Jul 2026 DISCLAIMER

News: Bank of Baroda reported a mixed Q1FY27 performance, with healthy YoY business growth and benign credit costs offset by moderate sequential balance-sheet growth, margin pressure and the one-off NMC settlement. Global advances grew 17.4% YoY (-0.9% QoQ), led by broad-based traction across Retail (18.4% YoY), Agri (18.7%), MSME (20.3%) and Corporate (15.3%), though sequential growth remained muted amid seasonal moderation. Deposits increased 13.8% YoY (-0.9% QoQ), with domestic deposits up 14.7% YoY and CASA deposits up 10%, while CASA ratio moderated to 37.7%. NII grew 9.5% YoY (0.3% QoQ), while NIM declined 12 bps QoQ to 2.77%, amid higher mix of lower-margin international business, despite a 12 bps QoQ decline in cost of deposits; interest on IT refunds stood at ~₹370 crore. Other income remained subdued amid weaker fee income and lower treasury gains on a YoY basis. Asset quality remained resilient, with GNPA/NNPA at 1.99%/0.50%, slippage ratio at 0.91%, credit cost at 0.29% and collection efficiency improving to 99.2%. Reported PAT declined sharply to ₹1,278 crore, impacted by the US$600 million NMC settlement fully absorbed during the quarter; excluding this exceptional item, PAT would have been ₹5,528 crore with RoA at 1.10%.

View: The NMC settlement remains a one-off drag on reported FY27 profitability, though its resolution removes a longstanding legacy overhang. Going forward, management expects business momentum to remain healthy with loan/deposit growth of 12–14%/10–12%, while NIM is guided at 2.75–2.95% and credit cost at <0.60%. Despite the exceptional charge, management expects RoA to remain above 1% during Q2–Q4FY27, supported by benign asset quality, while margin trajectory and ECL transition remain key monitorables.

Impact: Neutral

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