Bank of Baroda , one of India's leading public sector banks, has announced its financial results for the first quarter, revealing a mixed performance with modest profit growth and a slowdown in corporate lending.

Key Highlights

• Net profit increased by 1.90% year-over-year to ₹4,541.00 crore
• Operating profit rose by 15.00% to ₹8,236.00 crore
• Corporate lending declined by over 10.00% sequentially
• Retail lending grew by 17.50% year-on-year to ₹2.61 lakh crore
• MSME loans increased by 13.10% to ₹1.35 lakh crore
• Gross Non-Performing Assets (GNPA) ratio slightly increased to 2.28%

Financial Performance

Bank of Baroda reported a net profit of ₹4,541.00 crore for Q1, marking a 1.90% increase compared to ₹4,458.00 crore in the same quarter last year. The bank's operating profit showed a significant improvement, rising by 15.00% to ₹8,236.00 crore from ₹7,161.00 crore in the corresponding quarter of the previous year.

The bank's total business grew by 10.70% year-over-year, reaching ₹26,42,691.00 crore. Global advances increased by 12.60% to ₹12,07,056.00 crore, while global deposits rose by 9.10% to ₹14,35,634.00 crore.

Corporate Lending Slowdown

Bank of Baroda experienced a significant slowdown in corporate lending during the quarter. The corporate book stood at ₹3.70 lakh crore, up 4.00% year-on-year but down over 10.00% sequentially. The bank attributes this decline to companies accessing cheaper bond market rates and ongoing corporate deleveraging. Despite this setback, the bank maintains its expectation of 9-10% growth in corporate lending for the current financial year.

Retail and MSME Lending

In contrast to the corporate segment, retail lending remained strong with 17.50% year-on-year growth to ₹2.61 lakh crore. MSME loans also showed robust growth, increasing by 13.10% to ₹1.35 lakh crore. The bank expects MSME loan growth to reach 18-19% for the year.

Asset Quality

The Gross Non-Performing Assets (GNPA) ratio slightly increased to 2.28% as of the quarter-end, compared to 2.26% in the previous quarter. The Net Non-Performing Assets (NNPA) ratio rose to 0.60% from 0.58% quarter-over-quarter.

Provisions jumped 95.00% year-on-year to ₹1,967.00 crore, primarily due to a ₹500.00 crore international account being classified as NPA.

Income and Margins

The bank's net interest income (NII) saw a slight decline of 1.40% year-over-year, amounting to ₹11,435.00 crore. The net interest margin (NIM) declined to 2.91% from 2.98% in the prior quarter. The bank expects NIM pressure to persist until the September quarter but anticipates improvement thereafter, targeting a NIM range of 2.8-3% by the end of FY26.

Management Commentary and Outlook

Despite the challenges in corporate lending, Bank of Baroda maintains its overall credit growth guidance of 11-13% for the current financial year. The management remains optimistic about the bank's growth prospects, particularly in the retail and MSME segments.

Conclusion

Bank of Baroda's Q1 results present a mixed picture, with modest profit growth and strong retail and MSME lending offset by a slowdown in corporate lending and increased provisions. The bank's ability to maintain its overall growth targets while navigating challenges in the corporate segment will be crucial for its performance in the coming quarters. Investors and analysts will be closely watching the bank's efforts to manage asset quality, improve margins, and sustain its growth momentum across various lending segments.

Bank of Baroda , one of India's leading public sector banks, has announced a reduction in its overnight Marginal Cost of Funds Based Lending Rate (MCLR). The bank has lowered the rate by 5 basis points (bps) to 8.10%, effective from July 12, 2025.

Key Points of the MCLR Revision

• The overnight MCLR has been reduced from 8.15% to 8.10%.
• This change will come into effect on July 12, 2025.
• Rates for other tenors remain unchanged.

MCLR Rates Across Tenors

Bank of Baroda has provided a detailed breakdown of its MCLR rates across various tenors:

As evident from the table, only the overnight MCLR has been adjusted, while rates for other tenors remain unchanged.

Impact and Context

The reduction in the overnight MCLR could potentially lead to lower short-term borrowing costs for the bank's customers. This move follows the Reserve Bank of India's (RBI) recent 50 bps cut in the key interest rate, indicating a response to broader monetary policy changes in the country.

The MCLR serves as a benchmark for various types of loans, including home loans, personal loans, and vehicle loans. A reduction in MCLR typically translates to lower interest rates on these loan products, although the exact impact may vary depending on the specific loan terms and conditions.

Bank of Baroda has communicated this change to the stock exchanges in compliance with Regulation 30 of SEBI (LODR) Regulations, 2015, ensuring transparency in its operations and keeping investors informed about significant financial decisions.

As the banking sector continues to adapt to changing economic conditions, such rate adjustments play a crucial role in managing liquidity and credit flow in the economy. Borrowers and investors alike will be keenly watching how this change might influence the broader lending landscape in India.