Bank of Baroda Reports 8% Profit Drop on Weak Treasury Income, But Beats Estimates

Bank of Baroda (BoB) reported a net profit of ₹4,809 crore for Q2 FY26, down 8% YoY from ₹5,238 crore, due to a 32% fall in non-interest income—mainly lower treasury gains. Net interest income rose 2.7% to ₹11,954 crore, while operating profit declined 20% to ₹7,576 crore. Despite the drop, BoB beat analyst estimates of ₹4,050 crore, with its stock rising 2% to ₹278.30 and hitting a 52-week high. CEO Debadutta Chand attributed the softer top-line to normalized treasury performance and absence of last year’s one-off NCLT recovery, noting that adjusted profit grew 22% YoY and 6% QoQ. Core business strength remains robust: RAM book (Retail, Agri, MSME) now at 62% of total loans (up 300 bps YoY), targeting 65%. Retail, agri, and MSME grew 17.6%, 17.4%, and 13.9% respectively. Asset quality improved: GNPA at 2.16%, NNPA at 0.57%. Provisions halved to ₹1,232 crore; floating provision buffer raised to ₹1,000 crore. Net Interest Margin dipped to 2.96% from 3.11% a year ago. Deposits grew 9.3% YoY to ₹15 lakh crore. The weak treasury income was driven by rising bond yields (10-year up 25 bps) and higher MTM losses, as BoB’s portfolio had greater exposure to AFS/HFT categories with longer duration, unlike peers like SBI and Canara Bank that managed gains better through active trading and HTM shifting. While BoB faces near-term headwinds in other income, its strong core lending growth and asset quality reinforce underlying resilience.