Bank of Baroda (BANKBARODA) Q2FY27 Concall Transcript - Sep-2026 Qtr
Firoza (Bank of Baroda): Good evening. Good evening, everyone, and welcome to the analysts meet to announce Bank of Baroda's financial results for the quarter ended 30th September 2026. Thank you all for joining us. We have with us today our MD & CEO, Dr. Debadatta Chand, and we are joined also by the bank's executive directors and our CFO. We will start with introductions followed by a short PPT, followed by Chand Sir's opening comments, and then we will move on to the Q&A session. Chand Sir, would request you to please continue.
Debadatta Chand (Bank of Baroda): Thanks, Firoza. Again, good evening to all my analyst friends who have joined on the call today. And thank you very much for joining on for the call for the financial outcome of the bank for September quarter. Let me introduce the management team. I am D. Chand, MD & CEO, Bank of Baroda. With me, we have Mr. Lalit Tyagi. He's the executive director. He looks after the Corporate Credit, International Banking, and Treasury. And we have Mr. Sanjay Mudaliar. He's also executive director. He looks after the IT, the retail asset, and a couple of other functions of the bank. Then we have Mr. Lal Singh, executive director. He looks after the Recovery, the HR vertical, the MSME and Agri vertical of the bank. And we have Madam Beena Vaheed. She looks after most of the compliance, control function, including the finance function, the CFO desk, and also the retail liability of the bank. And as you know, we have the CFO, Mr. IVS Sridhar, with us. So, I would hand it over to Mr. Sridhar for a short PPT, and then I come back with my comments on the result.
IVS Sridhar (Bank of Baroda): Thank you, MD sir. Good evening, everyone. It's my privilege to present before you the financial highlights of Bank of Baroda for the quarter and half-year ended 30th September 2026. As at the end of Q2 FY2027, the bank's global business has crossed the milestone of 32 lakh crore and stands at 32.59 lakh, 58 lakh crore, registering a YoY growth of 17.2%. Our global advances have grown by 18.3%, with domestic advances growing by 13.5% and international advances by 39.7%. Within the advances book Within the advances book, the bank has continued to focus on RAM advances. Our organic retail book grew by 18.6%, agriculture loans by 19%, and organic MSME by 21.3%. Corporate loans have grown by 6.3% YoY. Within the retail segment, we have seen a smart growth across the portfolio, with auto loans growing by 27.8% YoY, mortgage loans by 20.3%, home loans by 14.6%, education loans by 19.9%, and personal loans by 6.8%. In terms of deposit growth, our total deposits have grown by 16.4% YoY, with international deposits grown by 14.9% YoY and domestic deposits by 16.6%. The domestic CASA deposits have grown by 10.4%, and term deposits have registered a growth of 20.5% YoY. As of 30th September 2026, the bank's domestic credit-deposit ratio has reduced by 323 bps and stands at 80.08%. Bank's domestic CASA ratio stands at 36.37%. With regard to our profitability metrics, our operating profit for the quarter stands at 11,433 30 crores, registering a YoY growth of 50.9% YoY. This is the highest ever the operating profit posted by the bank. Our net profit for the quarter grew by 38.8% YoY and stands at 6,532 crore. Again, this is the highest ever quarterly profit posted by the bank. Return on assets stands at 1.2
IVS Sridhar (Bank of Baroda): 6%, improving by 19 bps YoY. Return on equity stands at 19.28% for the Q2 FY 2027, increasing by 363 bps YoY. With regard to our profitability metrics for the half year, our operating profit for the quarter stands at ₹19,557 crore, registering a growth of 23.7% YoY. Our net profit stands at ₹7,810 crore. Return on assets stands at 75 bps for the half year. Return on equity stands at 11.63% for the half year. With regard to the key ratios, our yield on advances increased by 4 bps sequentially and stands at 7.41% for the quarter. It stands at 7.39% for the half year. Bank's cost of deposits for the quarter stands at 4.71%, and the same is at 4.68% for the quarter, for the half year. Our net interest margin stands at 2.74% for the half year and 2.76% for the sorry, for 2.74% for the quarter and 2.76% for the half year. In terms of asset quality, the asset quality of the bank continues to remain robust. Our GNPA ratio has improved by 38 bps YoY and stands at 1.78%. Our net NPA ratio also reduced by 20 bps and stands at 30 0.37%. Bank's balance sheet continues to be robust with the healthy provision coverage ratio. PCR with the TWO, that is technical write-off, improved by 144 bps YoY and to 94.65%. Our slippage ratio for Q2 2027 has reduced by 22 bps and stands at 0.69%. It has also reduced by 23 bps YoY for the half year and stands at 0.67%. Bank has made prudent provisioning to strengthen the balance sheet. Therefore, the credit cost for the Q2 stands at 55 bps. The credit cost for the half year stands at 42 bps. Credit cost without prudential provisioning for the quarter would have been 18 bps. Then, coming to our SMA and collection efficiency, our SMA-1 and 2 as percentage of our standard advances reduced to 0.06% as of September '26 as against 0.39% for June '25. Our collection efficiency excluding agriculture remains robust at 99.2%. In terms of our capital adequacy, our capital adequacy position continues to be strong with the CET1 at 14.20%, Tier 1 at 14.71%, and CRAR at 16.61%. Our quarterly average LCR remains healthy at approximately 133.6%. Over to you, Chand sir.
Firoza (Bank of Baroda): Thank you, sir. Chand sir, would request you to make your opening remarks, please.
Debadatta Chand (Bank of Baroda): So, once again, thanks to all my analyst friends. And just to give a couple of qualitative, I mean, statements here, you would have seen the the the growth, one of the strongest in many years now. Possibly, would have seen a similar growth somewhere in 2023. Otherwise, I mean, the growth has been one of the strongest. And this growth has been, obviously, with the FCNR(B) window, got a huge boost because of the FCNR(B). So let me give some data without FCNR(B), because that's a number you will be interested to know. The global business, which is at ₹32.58 lakh crore, excluding FCNR(B), both on the liability and asset, it is at ₹31.20 lakh crore, which is still on a scale, giving a growth of 12.3, excluding FCNR(B), both on asset liability. Similarly, if I exclude the FCNR(B) impact both on deposit and advances, still the global deposit growth was at 11.2%, and the global advances growth was at 13.5%, which was clearly in line with the guidance that we have given earlier. FCNR(B), as we said, we have raised almost 8.08 billion USD, and rather, prudently, we have not used the liquidity generated out of FCNR(B) in terms of immediate reduction in the bulk deposit or any other form of deposit. Rather, we prudently parked this deposit, or rather I would use a word called stored deposit to take care of the future requirement of the liquidity for both busy season, December and March quarter. CASA is again
Debadatta Chand (Bank of Baroda): one of the strong point. We have been growing for both the quarters now, June and September, the growth has been more than 10%. The CASA percentage, because I would have been articulating since long to have a high focus on the CASA percentage. And, you'd have seen, the CASA this time at 37.37. Precisely because we have raised a significant FCNR(B) deposit which has gone to the term deposit. So, even if 37.37 is one of the absolute good number in the market, but if you exclude the FCNR(B) it would be in excess of 38.36. So our focus on CASA would continue. By articulating this number, I want to again, put a emphasis that our focus on CASA would continue in terms of service delivery, product bundling, and multiple other, I mean, service delivery points, so that the CASA remains one of the strong point as far as the bank is concerned. the NII growth, if you'd have seen, the NII growth has been positive at 9% and half yearly 9.2%. And this is something I'm trying to, I mean, give you a glide path saying that when I look at the margin of 2. 74 for this quarter and 2.76, since the repo has been increased with the effect from 5th October, already, 38% of the book which is repo-linked has already seen a upsize in terms of the interest income. Non-MCLR book in the corporate also we have significantly repriced this deposit in the recent past like this, September quarter and the full benefit of that is going to be felt in December quarter. Cost of deposit, although may be slightly increased, but still because of the prevailing liquidity scenario I think still it is contained. So, in that scenario, the margin guidance of 2.75 to 2.95, we're I mean, we are hopeful of achieving on the higher band of the margin going forward. The profit again, Mr. Sridhar has told you that the operating profit is, the NII is a positive growth. The operating profit of 11,430 crore is one of the highest ever in the bank. I mean, on the profit side, there is also one-off impact on the NSE sells. The NSE sell of 1,349 crore was a cash profit that we got. At the same time, there is a valuation gain. So, if you exclude the entire impact of the NSE on the profitability, still the operating profit is at a strong at 7,749 crore. I mean, in that way, the bank, we have I mean if you look at the net profit again, 6,652 crore, 532 crore. This is after the as Mr. Sridhar said, there is a prudential provisioning we have done the balance sheet to buffer the balance sheet for future impact of ECL and similar other impact. So, roughly around 1,300 crore of provisioning we have taken in on the NPA and standard assets which are the need-based, specific, prudential provisioning. Plus roughly 3,000 crore of provisioning we have taken in the contingency provisioning typically to take care of the fluctuation in the bond prices and the equity prices in the investment book. So, I think, 2,500 crore is a already floating provision we are holding in the books. So, this is our efforts to strengthen the balance sheet both in terms of availability of provision so that future impact, maybe of ECL or any other impact, the bank is in a position to take it. The asset quality continue to be very strong if you look at all the numbers. I'm not going to, tell, but then this number, whether it is a slippage ratio, credit cost, excluding, I mean, the prudential provisioning is 0.18. The CRILC data, I mean the CRILC, SMA-1 and 2 at.06. The collection efficiency has improved. The slippage has been lower than the the last quarter, the Q1, and also the same quarter last year. The recovery has been better than the the, the, the last, I mean, the same, I mean, same quarter last year, and also the previous quarter. So, asset quality continue to be a pristine in that way. But the provision increase, as I said, is not because of the asset quality issue. It is because of the prudential provisioning. And let us be very clear on that. Otherwise, the bank's asset quality is very strong and I mean, this quarter also, the asset quality is very strong. But then, the provision I mean increase is because of the prudential provisioning. Couple of things that I would like to highlight before I close is bob World 2 is a new app that I mean, earlier also we talked about. And this app has multiple new features, powered by AI. Also, there is a voice, feature over there that is unique to mobile banking as on today. At the same time, also there is a personal finance manager. I think the app has come on a, on a, on a totally a different and also it's a persona-based. So in that way, this is one of the development that between the quarter I wanted to highlight. At the same time for cyber security, we have a mascot called CyberVeeru and it's also creating the right, juice
Debadatta Chand (Bank of Baroda): digital literacy within the customer class. At the same time, we also venture into two new entity that we announced earlier also, the BOB the Securities and Gilts Limited on the PD business and DCM business, and also the pension fund business. Let me again articulate articulate the guidance now. The credit guidance earlier we had given 12% to 14%, we upsized the guidance to 13% to 15%. So as against 12% to 14%, we are now projecting at 13% to 15%. Deposit earlier we said 10% to 12%. We are now projecting at 11% to 13%. The NIM, we continue to maintain the same 2.75 to 2.95, but as I articulated, I think there is upside on the margin going forward as far as Q3 and Q4 are concerned based on prevailing the interest and also the asset liability structure we do have. The credit cost continued to be less than.6. This quarter is.55. Excluding the the prudential provisioning, it is at.18. Slippage is better than the the Q1 of FY '27 at.69, but we continue to hold 1 to 1.25. ROA, let me again articulate. Last time I put the ROA guidance on hold, considering June we had a significant dip on profitability because of the settlement issue. This quarter the ROA is 1.26. I think the next two more quarters, Q2, Q3, and Q4, I mean three quarters, we are expecting ROA to be more than one. On a full-year basis, because June we had a lower ROA, we still be hopeful of a near-one kind of an ROA. But as we go forward, we articulate more on the ROA, but Q2, Q3, Q4, based on the current profitability metrics, I think we'll be above one. And the ROE continued to be Although we are at 19.28, but the guidance is at 15 to 16. So with this, I end my initial remark. Now we are open for question and answers.
Firoza (Bank of Baroda): Thank you, sir. If you have a question, please raise your hand, and we'll come to you. You may also type your question in the Q&A box. In the interest of time, we'd request you to please keep your limit your questions to two, and we will come back to you if there is more time. The first question is from Mr. Ashok Ajmera.
Ashok Ajmera: Thank you for giving me the opportunity, and congratulations Chand saab and the entire management of Bank of Baroda for the fantastic quarter. I mean, very good set of numbers. Prima facie on record, I mean, even if you take FCNR (B), even if you take the NSE profit, whatever you say. But the profit which looks on the paper is to be believed, 11,430 crores of the operating profit, one of the highest, and total business is also going to 32.57 lakh crores. I mean, the first public sector bank next to State Bank of India in terms of the branch, and the gap between the next bank and our bank has increased substantially. So barring that last quarter, that one-time that provisioning that hit you had to take, the results for the entire quarter and the half-year are fantastic. Congratulations for the same. Having said that sir, I have got some few observations and some more clarifications, some elaborations on some of the points which you have covered in your initial address. One is that's it's very good to know that you'll increase your credit growth target to 13% to 15%. So if I take 15% growth for the whole FY '27, then 2,14,000 crores of credit growth should be there. So out of that, what we have done is because the first quarter was little sort of a minus or negative only as compared to the credit growth, so what we have done is 82,000 crore growth. So in order to achieve this target on the higher band, you need to look at 1,30,000 crores of the credit growth in the remaining six months period. So number one, how prepared we are for that if we achieve this 15% growth, what is the pipeline, sanction pipeline and from where do you see this business coming in, and how comfortable you are on the credit adequacy and this to achieve this numbers. similar thing is on the reported size also, because of the first quarter this little lagging, what we have achieved is only 96,000 crore. So there also will have to do substantial work to reach this target of 13%. So there also if you can little bit Now looking at the the numbers which you have given that, but for NSE, so I believe that total the profit from the NSE, I mean on the revaluation in the profit is around 3,680
Ashok Ajmera: would have otherwise would have been the operating profit. So is that correct, that 3,680 crore we got either by way of revaluation or by way of profit booked from the NSE transaction? And because of the listing of the National Stock Exchange, this is my first little bit observation and some clarifications I would like to have from you, sir.
Debadatta Chand (Bank of Baroda): So first of all, thank you so so much Ajmera sir for complimenting the bank, its growth, I mean a consistent business model and the performance excluding the last quarter that you already said. So thank you so so much for that. On the credit growth, as you said 1,30,000 is the the kind of incremental credit that we need to do. And you would have seen the numbers both for the Q3 and Q4 of last year, it was almost a similar number. So in terms of ability on the RAM book we are expecting almost 60 odd thousand crore of incremental book. At the same time the corporate book already the pipeline is 60 odd thousand. So as we go on a busy season both for December and March, I think this is achievable, quite achievable. And secondly I used a word on liquidity that the entire, the liquidity generated out of FCNR (B) is not utilized as on today. This is a stole liquidity for us as on today. So in terms of funding credit I think there is enough resources which was not the case in earlier years. So I think in both the front, I think the bank is quite comfortable to achieve the numbers that we are guiding and upsizing the growth guidance. NSE the the full impact of both the cash profit and also valuation, you said right, it's roughly around 3,100 some odd crore, taking it 3,200 crore. Out of 3,200 crore, 1,600 is a prudential provisioning that we have done in this quarter to buffer the balance sheet for future impact of ECL and similar other activity. So in that way the balance sheet is cushioned. So we have not taken the full benefit. The post tax of the remaining portion would have been significantly lower. In that way, both on the operating profit scale and the net profit also from the core operating business model continues to be strong. And as I said earlier, the consistency and the sustainability is something the bank is working for last many years. So in that way, I think the bank is well-positioned, Ajmera sir. And I think the business model is consistent. And the asset quality continues to be strong and that is one of the strong point that I think the bank would be in a position to achieve its target. Thank you.
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