Bank of Baroda Q1 FY26: Profit +1.9%, GNPA 2.28%

Key takeaway from the June quarter

Bank of Baroda (NSE: BANKBARODA, BSE: 532134) reported a marginal rise in profit for the quarter ended June 30, 2025 (Q1 FY26), even as net interest income (NII) slipped year-on-year. The headline number was a 1.9% YoY increase in standalone net profit to ₹4,541 crore. The quarter was marked by double-digit growth in both advances and deposits across domestic and international operations. Asset quality improved, with the gross NPA ratio declining to 2.28%.

Management commentary highlighted that the bank is trying to sustain margins despite pressure visible in NII for the quarter. Debadatta Chand pointed to strong retail loan growth and stable asset quality as key positives. The results also showed continued expansion in global business, supported by deposit mobilisation and a steady loan book build-up.

Profit rises, but NII dips

Bank of Baroda’s net profit came in at ₹4,541 crore, up 1.9% from the year-ago quarter. In contrast, NII declined to ₹11,435 crore, down 1.4% from ₹11,600 crore in the corresponding quarter last year. The bank said the NII includes the impact of reclassification of interest on income tax refund, according to an exchange filing.

The combination of profit growth with lower NII indicates that non-interest elements and overall balance sheet expansion helped support earnings, even as core interest income faced headwinds. The bank also cited rising interest costs as a factor influencing NII. Management has indicated a focus on sustaining margins, which becomes important in quarters where funding costs move faster than yields.

Global business expands to ₹26.43 lakh crore

The bank reported that its total global business (deposits plus advances) rose 10.7% YoY to ₹26.43 lakh crore as of June 2025. In ₹ crore terms, global business stood at ₹26,42,721 crore, compared with ₹23,87,254 crore a year earlier.

This overall expansion was driven by growth in both sides of the balance sheet. Global deposits rose 9.1% YoY to ₹14.36 lakh crore (₹14,35,634 crore). Global advances rose 12.6% YoY to about ₹12.07 lakh crore (₹12,07,087 crore). With advances growing faster than deposits, the quarter continued the bank’s trend of pushing credit growth while maintaining deposit traction.

Deposits: domestic up 8.1%, international up 14.8%

Total deposits stood at ₹14.35 lakh crore (₹14,35,634 crore), up 9.1% YoY. Within this, domestic deposits rose 8.1% to ₹12.04 lakh crore (₹12,04,283 crore), compared with ₹11.14 lakh crore (₹11,14,039 crore) in Q1 FY25. International deposits increased 14.8% YoY to ₹2.31 lakh crore (₹2,31,351 crore), up from ₹2.01 lakh crore (₹2,01,000 crore) a year earlier.

The bank also reported that domestic CASA deposits increased 5.5% YoY to ₹4,73,637 crore. Management commentary noted that term deposits registered 9.9% YoY growth. The mix of CASA and term deposits matters for funding costs, especially in periods when interest rates and deposit competition influence pricing.

Advances: global up 12.6%, international ahead of domestic

On the credit side, Bank of Baroda reported global advances growth of 12.6% YoY. Disclosures highlighted international advances growth of 13.6% YoY. The bank also reported domestic loan growth of 12.4% YoY, with domestic gross advances rising to ₹9.91 lakh crore (about ₹9,91,000 crore) from ₹8.81 lakh crore (about ₹8,81,000 crore) in the year-ago quarter.

A faster pace in international advances versus domestic advances was also mirrored on the deposits side, where international deposits grew at a higher rate. This mix is relevant for investors tracking currency, geography, and portfolio composition, although the quarter’s release primarily focused on headline growth rates and balance sheet totals.

Retail remains a key driver

Retail advances rose 17.5% YoY to ₹2.61 lakh crore (₹2,61,479 crore), compared with ₹2.22 lakh crore (₹2,22,000 crore) in Q1 FY25. In management remarks referenced in the results coverage, Debadatta Chand highlighted retail loan growth of 20.9% and described asset quality as stable.

The reported retail advances growth and the management commentary both point to strong traction in retail lending. For a large public sector bank, retail expansion can support diversification and help balance the risk profile when accompanied by consistent underwriting and collections performance.

Asset quality improves: GNPA at 2.28%, NNPA at 0.60%

Bank of Baroda reported an improvement in headline asset quality ratios. Gross non-performing assets (GNPA) declined 60 basis points YoY to 2.28% from 2.88% in the year-ago quarter. Net NPA (NNPA) fell 9 basis points to 0.60%.

The combination of lower GNPA and NNPA supports the bank’s claim of stable asset quality during the quarter. These ratios are watched closely because they influence credit cost trends, provisioning needs, and the sustainability of profitability over time.

Key numbers at a glance (₹ crore)

Market impact: what the numbers indicate

The results show a clear divergence between balance sheet growth and NII performance. Deposits and advances grew at 9.1% and 12.6% respectively, indicating that the bank continued to expand its book. But NII fell 1.4% YoY to ₹11,435 crore, with the bank pointing to the reclassification of interest on income tax refund and rising interest costs.

For investors, the quarter provides three measurable signals. First, asset quality improved as GNPA fell to 2.28% and NNPA to 0.60%, supporting the “stable asset quality” message. Second, the bank maintained deposit momentum, including stronger growth in international deposits (14.8%). Third, retail advances rose sharply to ₹2,61,479 crore, reinforcing retail as a growth pillar.

Why the quarter matters

Q1 FY26 underlines how earnings can remain resilient even when core interest income is under pressure, provided balance sheet growth and credit quality remain supportive. The bank’s reported improvement in NPAs provides comfort on the risk front, while the faster growth in advances versus deposits keeps attention on funding and margin management.

Management has signalled a focus on sustaining margins. With NII already down YoY in this quarter, subsequent updates on deposit costs, loan yields, and business mix will be key for assessing whether growth translates into stronger core profitability.

Conclusion

Bank of Baroda’s Q1 FY26 performance combined modest profit growth with strong expansion in deposits and advances, alongside an improvement in asset quality. Net profit rose to ₹4,541 crore, global business reached ₹26,42,721 crore, and GNPA declined to 2.28%, while NII fell to ₹11,435 crore. The bank’s next disclosures will be watched for updates on margin sustainability and the pace of retail-led credit growth.