Bank of Baroda has received favorable credit rating action from India Ratings and Research (Ind-Ra), which assigned the bank's additional Certificate of Deposits an 'IND A1+' rating while affirming all existing ratings. The rating agency's comprehensive assessment reflects the bank's strong market position and robust financial metrics.

Rating Details and Actions

India Ratings has taken multiple rating actions for Bank of Baroda's various debt instruments:

The rating actions demonstrate continued confidence in the bank's creditworthiness across its various funding instruments.

Key Rating Strengths

Bank of Baroda's ratings are anchored by several fundamental strengths that position it favorably within the public sector banking landscape:

Market Leadership and Systemic Importance: The bank maintains its position as the third-largest public sector bank by deposits and second-largest by net advances, with market shares of 6.5% and 6.6% respectively as of 9MFYE26. Its extensive domestic network comprises 8,500 branches, 11,563 ATMs and cash recyclers, serving approximately 188 million customers.

Strong Capitalization: Bank of Baroda demonstrates robust capital adequacy with a CET-I ratio of 12.45% in 9MFY26, tier-1 ratio of 13.10%, and total capital adequacy ratio of 15.29%. These capital buffers provide adequate support for the bank's targeted credit growth rate of 11%-13% year-on-year.

Superior Asset Quality Metrics: The bank maintains a high provision coverage ratio of 72.2% in 9MFY26, positioning it at the higher end of the public sector bank peer group. Gross NPAs and net NPAs stood at 2.04% and 0.57% respectively, showing improvement from previous periods.

Financial Performance Indicators

The bank's operational metrics reflect stable performance across key parameters:

The bank's return on assets is expected to be maintained at around 1.15% in FY26, consistent with recent performance levels.

Areas of Focus

While the ratings reflect overall strength, India Ratings identified the decline in low-cost liability franchise as a key area requiring attention. The bank's global CASA deposit ratio declined to 36.57% in 9MFY26 from 37.82% in FY25. However, domestic current account balances increased 15.1% year-on-year in 9MFY26, with savings account balances growing 7.4%, leading to 11.1% growth in overall domestic deposits.

Liquidity Assessment

India Ratings assessed Bank of Baroda's liquidity as "Superior," with the bank maintaining an overall funding gap of 9.7% in the cumulative one-year bucket as a percentage of total assets at end-3QFY26. The bank holds 12.0% of its total assets in balances with the Reserve Bank of India and government securities, with a comfortable average consolidated liquidity coverage ratio of 116% in 3QFY26.

Bank of Baroda has received reaffirmation of its CARE AAA; Stable rating for bonds and Green infrastructure bonds, along with CARE A1+ rating for Certificate of Deposits from CARE Ratings on February 27, 2026. The rating agency also enhanced the bank's Certificate of Deposit limit significantly while maintaining confidence in the public sector bank's financial strength and government backing.

Rating Actions and Enhanced Limits

CARE Ratings reaffirmed ratings across multiple instruments with a notable enhancement in Certificate of Deposit limits:

The significant enhancement of Certificate of Deposit limits from ₹20,000 crore to ₹1,10,000 crore demonstrates the rating agency's increased confidence in the bank's short-term funding capabilities and liquidity management.

Government Support and Franchise Strength

The ratings continue to factor in the Government of India's majority ownership of 63.97% stake as of December 31, 2025, and expected continued support given the bank's systemic importance. Bank of Baroda's established franchise spans over 11 decades of operations, making it one of the largest nationalised banks in terms of assets and business outreach.

The bank maintains an extensive network of 8,508 branches (84 international and 8,424 domestic), 9,316 ATMs, 1,671 cash recyclers, and over 75,000 employees as of March 31, 2025. This infrastructure serves over 140 million customers globally, providing substantial deposit mobilisation capabilities at competitive rates.

Strong Financial Performance Metrics

Bank of Baroda demonstrated robust financial performance with consistent growth across key metrics:

Net profit grew by approximately 10% to ₹19,581 crore in FY25 from ₹17,789 crore in FY24, while total income increased to ₹138,089 crore. However, Net Interest Margin witnessed some pressure, declining to 2.56% in 9M FY26 due to faster repricing of advances compared to deposits.

Asset Quality and Capitalisation Improvements

Asset quality parameters showed significant improvement with Gross NPA ratio declining to 2.04% as of December 31, 2025, from 2.92% as of March 31, 2024. Net NPA ratio improved to 0.57% as of December 31, 2025, demonstrating effective asset quality management.

The bank maintains comfortable capitalisation levels with Capital Adequacy Ratio of 17.19% as of March 31, 2025, well above the minimum regulatory requirement of 11.5%. This provides adequate cushion for future growth and potential asset quality pressures.

Growth Strategy and Market Position

Advances growth remained robust at 12.83% in FY25, with the bank focusing on retail, agriculture, and MSME segments that constituted approximately 47% of global gross advances as of March 31, 2025. Total deposits grew by approximately 11% to ₹1,472,035 crore in FY25, outpacing industry growth of 10.4%.

CARE Ratings maintains a stable outlook, expecting Bank of Baroda to continue steady growth in advances and deposits while maintaining stable asset quality and comfortable capitalisation levels. The rating agency expects some pressure on Net Interest Margin in FY26 due to faster repricing of advances compared to deposits.

Source: None/Company/INE028A01039/c4436a2b-732d-4d10-a4b8-a4893b9eba5e.pdf