Bank of Baroda Maintains 11–13% Credit Growth Guidance For FY26

Public sector lender Bank of Baroda remains optimistic on credit growth for FY26, maintaining its guidance of 11–13% for the full fiscal. The PSU bank expects the credit growth to be driven largely by the retail and MSME segments.

Speaking to NDTV Profit on July 29, the bank’s MD and CEO, Debadatta Chand, noted that overall advances grew 12.6% year-on-year in Q1, led by a strong 18% rise in the RAM (Retail, Agri and MSME) segment.

Explaining the slowdown in corporate lending, Chand said seasonal factors impacted growth in the segment. “Talking about corporate growth, I think a seasonal factor has played in. As of June, our year-on-year growth in the corporate segment was 2.5%. But on a full-year basis, we could achieve around 10% growth in corporate. That puts our overall advance growth at around 13% or even higher for the full year,” he noted.

According to the MD, the spike in slippages seen in Q1 was mainly due to one international account. While the lender typically reports a Rs 2,800-2,900 crore slippage run rate, in the June quarter, it rose by Rs 500 crore.

“If you look at the slippages for the bank this quarter, they are around Rs 500 crore higher than the last quarter. Our average slippage run rate is almost Rs 2800 to 2900 crore per quarter. This is due to an international account that has slipped. Excluding that, my slippage ratio stands at 0.99%, which is better than previous quarters,” he said.

Chand explained that this international account was restructured during the COVID period and subsequently upgraded because of the account’s contract. However, it started showing signs of stress. For now, it has entered into a resolution process and the outcome of this resolution will be known “within 210 days” at the latest, he noted.

“Excluding this 40% provision on the international account, the credit cost is 0.47%, which is in line with our credit cost in earlier quarters. This is only a one-off related to the international account. The book is quite robust. So, this one account has slightly elevated the credit cost, but otherwise, we are well within our guidance of below 0.75%,” he said.

Chand acknowledged that Q1 recoveries were softer, partly due to seasonality. However, he remains confident about full-year recoveries and sees no major concern beyond this isolated account.

“You said right, we have a full-year recovery target of Rs 10,000 crore. That means the average recovery per quarter will be Rs 2,500 crore. This quarter was marginally lower than that because of the seasonal factor. However, the slippage that happened this quarter has already seen a lot of pullback. So going forward, recovery will be much stronger than in Q1,” Chand added.

Bank of Baroda reported a slight dip in Net Interest Income (NII) in Q1FY26 at Rs 11,435 crore, down 1.4% from Rs 11,600 crore in Q1FY25. However, net profit improved by 1.9% to Rs 4,541 crore compared to Rs 4,458 crore a year ago. The bank’s Gross Non-Performing Assets (GNPA) ratio stood at 2.28% versus 2.88% in the same quarter last year. Meanwhile, the Net NPA (NNPA) ratio was reported at 0.6% versus 0.69% in Q1FY25.

Bank of Baroda shares were trading 0.96% higher at Rs 242.65 apiece on the NSE at 2:08 p.m., compared to a 0.48% rise in the benchmark Nifty50 at 24,759.25.