Bank of Baroda's Financial Performance in Q1 FY26

Mumbai: Bank of Baroda has announced a slight increase in its net profit for the first quarter of the fiscal year 2026, marking a 1.9% rise to Rs 4,541.4 crore from Rs 4,458.2 crore in the previous year. This growth comes despite challenges including a dip in net interest income and higher provisions.

Key Factors Influencing the Quarter's Results

The bank's ability to report a profit was significantly supported by an 88% year-on-year jump in other income, primarily driven by treasury income as bond yields fell. However, net interest income saw a marginal decrease, and provisions nearly doubled, highlighting the pressures on the bank's margins.

Deposits and Advances Growth

Global deposits and advances showed healthy growth, with deposits rising by 9.1% and advances by 13.2% year-on-year. Despite this, the rise in interest expended outpaced the growth in interest earned, compressing margins.

Future Outlook

Debadatta Chand, the bank's MD & CEO, mentioned that margins are expected to remain under pressure in the next quarter. The bank is targeting an 11-13% growth in advances and a 9-11% increase in deposits for the year, focusing on agriculture, retail, and MSME sectors.

Asset Quality Improvement

Despite higher provisioning, the bank improved its asset quality, with gross NPAs declining by 10.7%. The results reflect a continued balance sheet expansion amidst tighter interest margins and rising costs.