Analyst Concall
Bank of Baroda MD sees healthy treasury income in FY26 as well
This story was originally published at 14:12 IST on 7 May 2025
Register to read our real-time news.Informist, Wednesday, May 7, 2025
Please click here to read all liners published on this story
--Bk of Baroda MD:See steady growth in MSME book, don't see risk of slippage
--Bank of Baroda MD: Will maintain LCR of around 120% in FY26
--Bk of Baroda MD:May revise FY26 advances, deposits view based on liquidity
--Bank of Baroda MD: See advances growing 11-13% in FY26, deposits 9-11%
--Bank of Baroda MD: Have absolutely no risk of asset quality deterioration
--Bank of Baroda MD: Expect much better NIM in Oct-Mar
--Bank of Baroda MD: Want to focus more on retail savings
--Bk of Baroda MD: Reckon NII growth muted, would like it to grow better
--Bk of Baroda MD: See healthy treasury income FY26 based on mkt conditions
--CONTEXT: Comments by Bank of Baroda's mgmt in post-earnings analyst call
--Bank of Baroda MD: Want to lower dependence on bulk deposits
By Priyasmita Dutta and Vaishali Tyagi
NEW DELHI/MUMBAI – Treasury income, a saving grace for Bank of Baroda in the March quarter, is expected to be healthy in 2025-26 (Apr-Mar) as well, Managing Director and Chief Executive Officer Debadatta Chand said Wednesday. "Going by the current market condition on the bond market or the rate side, this year (FY26) will also be a good year for treasury," Chand said at post-earnings analyst meet.
Bank of Baroda's financial results announced Tuesday showed a healthy jump in other income helped the bank make a profit for the March quarter, albeit muted, with net interest income falling and provisioning going up at the same time. The public sector bank posted a net profit of INR 50.48 billion for the March quarter, up 3.3% on year. Sequentially, it was up 4.4%. The bank's other income during the quarter went up over 24% to INR 52.10 billion, led by treasury income of INR 15.59 billion, over double the year-ago figure.
Following the release of the financial results, shares of the bank were down nearly 10% on Tuesday and at 1224 IST on Wednesday, they traded at INR 224 on the National Stock Exchange, flat from the previous close. "..overall treasury will continue to give good performance in terms of profits, as well as mentoring the cost," the bank's senior management said. Their optimistic view on the treasury income factors in two interest cuts by the Reserve Bank of India by the end of FY26.
Speaking about the March quarter, Chand said that the bank reckoned the muted net interest income and that they would like to grow better. "The underlying market conditions particlaurly on the liability side...cost structure on deposit side is still elevated impacting the NII in Jan-Mar," he said. The net interest margin of the bank moderated to 2.86% in the March quarter from 2.94% a quarter ago. Bank of Baroda's net interest margin in FY25 was 3.02%, lower than 3.18% in FY24.
Chand said that the pressures on margins will remain in Apr-Sept, with the bank being on a "watch-mode" particularly during April to June. "We expect it to be much better in Oct-Mar," the state-owned bank's chief said, adding that the bank aimed to keep margins at 3% but will give a full-year guidance for FY26 only in Oct-Dec. "With a downward rate cycle, protecting spread is one way of protecting margin and we are mindful of that," he said.
Operationally, in order to boost margins, Chand said the bank wanted to lower dependance on bulk deposits and focus more on retail savings. For FY26, he projected advances to grow 11-13% on year and deposits to grow 9-11% on year, maintaining the growth trajectory seen in FY25. Going forward in the year, the projections may be revised based on the liquidity available, he said. "We may upsize." While the bank's liquidity coverage ratio was at a "healthy" 123% at the end of FY25, they would like to maintain it around 120% in FY26.
The bank's business performance was steady at the end of FY25, with global advances and global deposits rising nearly 13% on year and over 10% on year, respectively, to INR 12.30 trillion and INR 14.72 trillion as of Mar. 31.
The public sector bank's chief also said he expected a steady growth in the micro, small and medium enterprises loan book in FY26, without any risk of slippage in this particular segment. The MSME book increased over 14% on year to INR 1.36 trillion at the end of March. The corporate book grew 8.6% on year to INR 4.12 trillion, which Chand said could increase to 10% in FY26 if liquidity conditions support.
On the asset quality on the whole, Chand said he has "absolutely no risk" of deterioration. Bank of Baroda's net non-performing assets ratio fell to 0.58% by the end of March, while gross non-performing assets ratio fell to 2.26%. "There is no concern with regard to any incipient or any inherent, slippage or any stress building in the book," he said. "Absolutely no doubt should be on that." End
Edited by Avishek Dutta and Akul Nishant Akhoury
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
