Bank of Baroda Q2 net profit declines 8% to ₹4,809 crore despite 3% growth in NII

State-owned Bank of Baroda on Friday (October 31) reported a net profit of ₹4,809 crore for the quarter ended September 2025, down 8.2% from ₹5,237 crore in the same period last year. Net interest income (NII) increased 2.8% year-on-year to ₹11,954 crore from ₹11,637 crore.

The bank’s asset quality showed improvement, with gross non-performing assets (NPA) declining to 2.16% from 2.28% in the previous quarter. Net NPA also eased to 0.57% from 0.60% sequentially.

Non-interest income for the quarter stood at ₹3,515 crore, bringing H1FY26 non-interest income to ₹8,189 crore, a 7% year-on-year increase. Global net interest margin (NIM) improved sequentially by 5 basis points to 2.96% in Q2FY26, while domestic NIM rose 4 basis points quarter-on-quarter to 3.10%.

Operating profit for the quarter was ₹7,576 crore, totalling ₹15,812 crore for the half-year. The bank maintained a strong return on assets (ROA) above 1%, at 1.07% for Q2FY26 and 1.04% for H1FY26, and return on equity (ROE) stood at 15.37% for the quarter and 14.95% for the half-year.

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Domestic advances grew 11.5% year-on-year to ₹10,46,506 crore, while global advances rose 11.9% to ₹12,78,847 crore. Domestic deposits increased 9.7% year-on-year to ₹12,71,992 crore, and global deposits grew 9.3% to ₹15,00,012 crore. Domestic CASA deposits stood at ₹4,88,660 crore, up 6.6% year-on-year, while international deposits grew 7.2% to ₹2,28,020 crore.

The bank’s retail advances showed strong growth, particularly across mortgage loans (+19.8%), auto loans (+17.7%), home loans (+16.5%), education loans (+14.0%), and personal loans (+18.6%). The share of Retail, Agri, and MSME (RAM) loans in total advances improved by 310 basis points year-on-year to 61.7%, with the RAM portfolio growing 17.4% in Q2FY26.

Bank of Baroda’s asset quality remained strong, with gross NPA declining to 2.16% from 2.28% sequentially and net NPA easing to 0.57% from 0.60%. The bank maintained a healthy provision coverage ratio (PCR) of 93.21% including two-way provisions and 74.13% excluding them.

Slippage ratio improved to 0.91% for the quarter, down 16 basis points year-on-year and 25 basis points quarter-on-quarter, with credit cost remaining below 0.75%, at 0.29% for Q2FY26 and 0.42% for H1FY26.

On the capital front, Bank of Baroda’s capital adequacy ratio (CRAR) stood at 16.54% as of September 2025, with Tier-I capital at 14.15% (CET-1 at 13.36%, AT1 at 0.79%) and Tier-II capital at 2.39%. The consolidated CRAR and CET-1 ratios were 16.97% and 13.88%, respectively.

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Operating expenses remained controlled, rising 7.7% year-on-year to ₹7,893 crore for the quarter and totalling ₹15,765 crore for H1FY26. The cost of deposits fell 21 basis points year-on-year and 14 basis points quarter-on-quarter to 4.91%.

Subsidiary BOBCARD Ltd reported 30.73 lakh active cards as of September 30, 2025, up from 28.09 lakh a year ago, a 9.4% increase. Card spends rose 14.65% to ₹19,652 crore from ₹17,141 crore. Average net receivables (ANR) increased 17.04% to ₹6,257 crore, while end net receivables (ENR) grew 15.41% to ₹6,448 crore. Net profit declined 9.08% to ₹23.22 crore from ₹25.54 crore.

BOB Capital Markets, also wholly owned, saw broking revenue grow 23.34% to ₹12.84 crore from ₹10.41 crore. Revenue from its investment banking division decreased to ₹2.69 crore from ₹11.47 crore. Overall gross revenue fell 24.27% to ₹19.91 crore from ₹26.29 crore, with net loss widening to ₹10.55 crore from ₹3.10 crore in H1 FY25.

Baroda Global Shared Services recorded DST gross disbursements of ₹7,966 crore across four products — HL-LAP, AL, EL, and Agri — up 28% from ₹6,215 crore in H1 FY25. The CBC unit processed 26.34 lakh transactions, generating ₹2.37 crore in revenue, a 17% increase from ₹2.03 crore.

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Agri collections reached ₹3,985 crore, while SMA 0 category POS collections achieved ₹14,987 crore with an 86.58% resolution rate. Revenue from operations decreased 37.74% to ₹102.25 crore from ₹164.22 crore, and profit after tax declined to ₹3.10 crore from ₹7.66 crore in H1 FY25.

Shares of Bank of Baroda Ltd ended at ₹278.30, up by ₹5.60, or 2.05%, on the BSE.