Bank of Baroda FY27 outlook: 12-14% loan growth

What changed for FY27

Bank of Baroda (BoB) has raised its FY27 credit growth guidance to 12-14%, up from its earlier 11-13% range. Management linked the higher ambition to an improving deposit environment, a stronger-than-guided FY26 performance, and some optimism on the timeline of geopolitical uncertainties. The bank also indicated that deposit growth in the system is coming back, which has increased its comfort on sustaining loan growth. In the same commentary, management said it remains positive on the gold loan business. However, it also flagged that the cost of deposits is sticky, citing the current geopolitical situation. For investors, the key takeaway is that growth is expected to stay in double digits, but funding costs may not soften quickly.

Q4 FY26 profit hits a record

For the January to March quarter (Q4 FY26), BoB reported a net profit of ₹5,616 crore, up 11.2% year-on-year and also 11% quarter-on-quarter as per the reported numbers. The quarter was described as the bank’s highest-ever quarterly profit in the supplied information. Operating profit for Q4 FY26 rose 11.5% YoY to ₹9,069 crore. Net interest income (NII) increased about 9% YoY to ₹12,494 crore, supported by strong advances growth and contained interest expenses.

Full-year FY26 crosses ₹20,000 crore profit milestone

For FY26, BoB reported net profit of ₹20,021 crore, crossing the ₹20,000 crore mark. Full-year operating profit stood at ₹32,259 crore. FY26 NII was reported at ₹47,682 crore, and non-interest income for the year was ₹15,757 crore. These numbers show profitability stayed firm even as the bank dealt with a changing rate and liquidity environment. The FY26 performance also explains why management sounded more confident on stepping up FY27 guidance.

NIM trends and FY27 margin band

BoB’s reported net interest margin (NIM) in Q4 FY26 was 2.89%. The data provided notes a 10 bps sequential expansion to 2.89%, while also indicating it was lower than 2.98% in the year-ago quarter. Looking ahead, the bank guided that NIM may stay in a 2.75%-2.95% range in FY27. This range is important because it sets expectations for profitability even if deposit pricing stays firm. Management also said it expects the cost of deposits to stay around current levels, reflecting the stickiness in funding costs.

Loan growth: retail strong, corporate rebound

BoB’s loan book surged 16.5% YoY (6.3% QoQ) in the quarter data cited. Retail loans rose 17.9% YoY (5.9% QoQ), while corporate loans increased 10.7% YoY (9% QoQ). Management commentary also referenced corporate growth bouncing back to 10% plus after a flat patch, and reiterated a broad expectation of around 10% corporate loan growth.

Separately, as of March 31, 2026, BoB’s global advances were reported at ₹14,29,879 crore (up 16.2% YoY). Domestic advances were ₹11,69,458 crore (up 14.5% YoY) and international advances were ₹2,60,421 crore (up 24.4% YoY). Organic retail advances were ₹3,02,598 crore (up 17.9%). Within retail, the data points highlighted auto loans at ₹56,157 crore (up 20.6%), home loans at ₹1,50,305 crore (up 14.6%), and gold loans at ₹14,010 crore (up 98.0%).

Deposits, CASA, and why funding matters in FY27

Deposits increased 12% YoY (6.6% QoQ) in the quarter data cited. As of March 31, 2026, global deposits were reported at ₹16,48,487 crore (up 12.0% YoY), with domestic deposits at ₹14,01,290 crore (up 12.8% YoY). The bank’s management repeatedly pointed to deposits becoming more supportive, with “money coming back to the banking system.”

On the CASA side, management said it has strengthened CASA through product, process, and service. The CASA ratio as on March 31 was 38.9%. Another data point reported CASA deposits at ₹5,45,000 crore (up 9.8%). CASA strength typically lowers the blended cost of funds, but BoB’s guidance still reflects caution on deposit cost relief.

Asset quality improves despite higher slippages

The bank reported slippages of around ₹3,400 crore. Even so, stronger recoveries and upgrades and steady write-offs helped improve headline asset quality. The gross NPA ratio declined to 1.89%, and the net NPA ratio improved to 0.45%. Another set of numbers in the provided text indicates GNPA improved from 2.26% a year earlier to 1.89%, and NNPA from 0.58% to 0.45%.

Provisioning was also notable. Provisions in Q4 FY26 were reported at ₹3,150 crore versus ₹1,555 crore a year earlier, and the bank made a ₹1,500 crore floating provision. Management said this helped lift the provision coverage ratio to 94%.

Efficiency and income mix signals

Cost control improved year-on-year, with the cost-to-income ratio for Q4 FY26 at 44.90%, compared with 49.89% in Q4 FY25. Total interest income for Q4 FY26 was ₹32,642 crore, up 4.9% YoY, driven by interest on advances of ₹24,745 crore.

At the same time, non-interest income was weaker in the quarter: it stood at ₹3,967 crore, down 16.2% YoY. This mix matters because fee and other income can cushion earnings when margins face pressure.

Capital raising plan for FY27

BoB’s board approved a ₹6,000 crore capital raising plan in FY27 through additional tier 1 and/or tier II bonds. For a growing balance sheet, this provides flexibility to support credit expansion and maintain regulatory buffers.

Key numbers at a glance

Brokerage view and what investors will track

Systematix maintained a ‘Buy’ rating on Bank of Baroda with an unchanged target price of ₹330, as cited in the provided text. For FY27, investors are likely to track whether the bank can deliver the higher 12-14% credit growth while keeping margins within the 2.75%-2.95% band. Deposit growth guidance was also shared as 10-12% for FY27, and management’s view on sticky deposit costs suggests competition for liabilities remains a key variable. Asset quality trends, especially the relationship between slippages and recoveries, will also be important given the quarter’s slippage number.

Conclusion

Bank of Baroda has entered FY27 with upgraded loan growth guidance, supported by a rebound in deposits, strong FY26 execution, and improved asset quality metrics. The next key monitorables are the bank’s ability to hold NIM within its guided band and manage deposit costs while sustaining double-digit loan growth. The bank’s FY27 capital raising plan of ₹6,000 crore is a defined next step that can support growth as the year progresses.