BANKBARODA

Bank of Baroda (BoB) reported a resilient quarterly performance, with steady growth in profitability driven by improved operational efficiency and higher other income. This growth came despite a decline in net interest income (NII), impacted by elevated deposit costs. While the net interest margin (NIM) remained within the guided range, we expect some compression in the near term due to lower incremental yields, driven by the transmission of repo rate cuts and limited exposure to high-yielding assets. The bank has also strengthened its asset quality on a growing loan book, with credit costs remaining well within guidance—supported by a rising share of secured assets and stricter underwriting policies. With a strategic shift towards the retail loan book, improving asset quality, and continued focus on operational efficiency, we expect the bank to sustain its earnings growth momentum with a CAGR of 12% over FY25- FY27E.