MUMBAI: Bank of Baroda (BoB) has posted a record net profit of Rs 5,616 crore for the fourth quarter of fiscal year 2026 (Q4FY26), marking an 11.2% increase from Rs 5,048 crore in the same period last year. The strong performance was driven by higher net interest income (NII) and lower tax provisions. For the full fiscal year, the bank's net profit surpassed the Rs 20,000 crore mark, reaching Rs 20,021 crore, which represents a growth of 2.2% compared to the previous year.
Growth Targets Revised Upwards
According to Managing Director and CEO Debadatta Chand, the bank has revised its advances growth target to 12-14% from the earlier 11-13%, and deposit growth target to 10-12% from 9-11%, after exceeding its FY26 goals. He revealed that the bank received an income tax refund of Rs 1,500 crore during the quarter, which was utilized to make floating provisions and improve provision coverage rather than boosting the bottom line. The bank also expects to disburse around Rs 12,000 crore to small businesses under the emergency credit line guarantee scheme. Regarding the impact of the West Asia crisis, Chand noted that the bank has a sizeable business in the Middle East but there is no immediate impact.
Net Interest Income and Loan Growth
Net interest income rose 8.7% year-on-year to Rs 12,494 crore in Q4FY26, supported by a 16.2% increase in the global loan book to Rs 14,29,879 crore. Domestic advances grew 14.5% to Rs 11,69,458 crore, led by a 17.9% rise in retail loans. Within retail, auto loans surged 20.6% and mortgages grew 19.3%. Interest expenses increased 2.7% to Rs 20,148 crore as global deposits rose 12% to Rs 16,48,487 crore. The cost of deposits declined by 34 basis points to 4.78%, while the domestic CASA (current account savings account) ratio stood at 38.89% after a 9.8% rise in CASA deposits.
Non-Interest Income and Operating Profit
Non-interest income fell 16.2% to Rs 3,967 crore from a high base, while total income rose 1.4% to Rs 16,460 crore. Operating profit increased 11.5% to Rs 9,069 crore, helped by an 8.7% decline in operating expenses to Rs 7,391 crore. Staff costs fell to Rs 3,262 crore from Rs 4,347 crore in the year-ago quarter.
Provisions and Tax
Provisions and contingencies, excluding tax, more than doubled to Rs 3,150 crore, including Rs 2,566 crore for bad loans and write-offs, up nearly 98% year-on-year. Net profit was supported by an 80.2% fall in tax provisions to Rs 303 crore from Rs 1,533 crore, after the bank reversed Rs 1,294 crore in tax provisions following favorable appellate orders. The flow from operating profit of Rs 9,069 crore through provisions and lower taxes resulted in a net profit of Rs 5,616 crore.
Asset Quality and Capital Adequacy
Asset quality improved, with the gross NPA ratio declining to 1.89% from 2.26% and the net NPA ratio to 0.45% from 0.58%. Capital adequacy remained at 15.82%, with the CET-1 ratio at 13.16%. The board recommended a dividend of Rs 8.50 per equity share for FY26.
