Bank of Baroda has received regulatory approval from the Reserve Bank of India to establish a wholly-owned subsidiary for conducting standalone primary dealer business. The bank has formally disclosed this development under Regulation 30 of the SEBI (LODR) Regulations, 2015, marking a significant step in its strategy to expand treasury and government securities operations.

Regulatory Approval and Compliance

The RBI has granted permission for the establishment of this specialized subsidiary, which will operate as an independent primary dealer entity. The approval comes with specific regulatory framework requirements and conditions that the bank must adhere to for successful implementation. The bank has made this disclosure in continuation to its earlier intimation dated January 9, 2026.

Capital Infusion Structure

Bank of Baroda has committed to infuse capital of up to ₹2000 crores into the new subsidiary. This substantial capital commitment demonstrates the bank's confidence in the primary dealer business segment and its potential for growth. The capital infusion will be executed subject to specified conditions as mandated by the regulatory framework.

Strategic Business Implications

The establishment of a dedicated primary dealer subsidiary will enable Bank of Baroda to participate more actively in government securities markets. Primary dealers play a crucial role in the government securities market by underwriting government debt issuances and providing liquidity in secondary market trading.

This move positions the bank to leverage opportunities in the government securities segment while maintaining operational focus through a specialized entity. The subsidiary structure will allow for dedicated resources and expertise development in primary dealer operations, enhancing the bank's overall treasury capabilities.

Bank of Baroda announced its financial results for the quarter and nine months ended December 31, 2025, demonstrating consistent growth momentum supported by stable asset quality and strong profitability metrics. The bank's performance exceeded market expectations across key financial parameters.

Q3 Financial Performance Overview

The bank reported net profit of ₹5,050 crore for Q3, significantly outperforming analyst estimates of ₹4,694 crore and marking a growth from ₹4,837 crore in the previous year. Revenue for the quarter reached ₹31,750 crore, up from ₹31,280 crore year-on-year. For the nine-month period ending December 31, 2025, net profit reached ₹14,405 crore with operating profit at ₹23,190 crore.

Asset Quality Metrics Show Continued Improvement

Bank of Baroda maintained strong asset quality with the Gross NPA ratio improving to 2.04% from 2.16% on a quarter-on-quarter basis, while also showing year-on-year improvement from 2.43%. The Net NPA ratio remained stable at 0.57% quarter-on-quarter, representing a 2 basis points improvement year-on-year from 0.59%.

Business Growth and Operational Metrics

Global advances registered strong growth of 14.7% year-on-year, reaching ₹13,44,904 crore, while domestic advances grew by 13.6% to ₹10,96,557 crore. The bank's retail portfolio demonstrated robust performance with 17.4% growth, driven by strong performance across mortgage loans (21.0%), auto loans (17.4%), and home loans (16.0%).

Capital Adequacy and Profitability

The bank maintained strong capital adequacy with CRAR at 15.29%, comprising Tier-I capital of 13.10% and Tier-II capital of 2.19%. Return on Assets remained consistently above 1% at 1.09% for the quarter, while Return on Equity stood at 15.59%. Global Net Interest Margin was 2.79% with domestic NIM at 2.93%, supported by a cost of deposits at 4.75%.