Bank of Baroda Q4 profit tops estimates despite higher provisions; FY27 guidance in focus

Bank of Baroda reported a strong set of Q4 results on May 8, with profit and net interest income beating Street estimates on the back of healthy business growth and improving asset quality.

The state-run lender posted a net profit of ₹5,615.7 crore for the quarter ended March, up 11.3% from ₹5,048 crore a year ago and ahead of the CNBC-TV18 poll estimate of ₹4,787.2 crore.

Net interest income (NII) rose 8.7% year-on-year to ₹12,493.7 crore from ₹11,494 crore, also surpassing analyst expectations of ₹12,154.8 crore.

Asset quality improved sequentially during the quarter, with gross non-performing assets declining to 1.89% from 2.04% in the previous quarter. Net NPA ratio eased to 0.45% from 0.57%.

In absolute terms, gross NPAs stood at ₹27,058.6 crore compared with ₹27,399.4 crore in the December quarter, while net NPAs fell to ₹6,316 crore from ₹7,615 crore.

Managing Director and Chief Executive Officer Debadatta Chand said the bank continued to focus on retail, agriculture and MSME (RAM) advances and described the quarter as one of the strongest in terms of advances and deposit growth over the last 10 quarters.

For

FY27, the lender guided for deposit growth of 10-12% and credit growth of 12-14%, while maintaining its net interest margin outlook at 2.75-2.95%. The bank also guided for return on assets of over 1%, slippage ratio of 1.2-1.25% and credit cost below 0.60%.

Chand said the bank made floating provisions of ₹1,500 crore during the quarter, which pushed up annual credit costs to 0.76%. He added that such provisions are meant for extraordinary situations and can only be utilised with RBI approval.

The lender also said it is currently assessing the potential impact of the proposed Expected Credit Loss (ECL) framework and does not yet have a quantified estimate to share.

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The board recommended a final dividend of ₹8.50 per equity share for FY26, subject to shareholder approval at the upcoming annual general meeting.

Ahead of the earnings announcement, shares of Bank of Baroda closed 2.5% lower at ₹263.50 on the NSE.