Bank of Baroda MD says pressure on NII, margins seen easing from Dec quarter
This story was originally published at 19:59 IST on 25 July 2025
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--Bank of Baroda: Hopeful corporate loan book will grow 9-10% by end of FY26
--CONTEXT: Comments by Bank of Baroda mgmt at post-earnings press conference
--Bank of Baroda: Expect cost of deposits to fall below 5% in Jul-Sept
--Bank of Baroda: Prepared to increase co-lending exposure significantly
--Bank of Baroda: Pressure on NII to continue in Jul-Sept
--Bank of Baroda: Expect margin, NII to grow from Oct-Dec
--Bank of Baroda: See advances growing 11-13%, deposit growth seen 9-11%
NEW DELHI – Bank of Baroda expects pressure on margins and net interest income to continue in the September quarter but will likely improve from the December quarter, its Managing Director and Chief Executive Officer Debadatta Chand said Friday.
The public sector lender's net interest income fell 1% on year to INR 114.35 billion in the June quarter and the global net interest margin moderated to 2.91% from 2.98% a quarter ago and 3.18% a year ago.
"I think there will be a bit of pressure both on the margin and NII in the September quarter," Chand said at a post-earnings press conference. "We have a positive outlook both for margin and NII for Q3 and Q4 (Oct-Dec and Jan-Mar)."
Bank of Baroda Friday reported a net profit of INR 45.41 billion for the June quarter, up just 2% on year. The rise in net profit was limited by provisions nearly doubling in the quarter from a year ago to INR 19.67 billion.
The bank expects corporate loan growth to pick up going ahead after moderating in the June quarter. Advances to corporates rose 4.2% on year to INR 3.70 trillion as of end June. Chand said corporate loan growth moderated because of seasonal factors and a similar trend was seen in the same quarter last year.
"If you look at the corporate loan book in June 2024, the growth was 2.5%. As compared to that, we are at 4.2%," Chand said. "In spite of the corporate book in June 2024 rising 2.5%, the full-year growth was almost 9%. So we are hopeful that as far as corporate loan is concerned for the full year, we'll be in the range of 9 to 10%."
Bank of Baroda retained its guidance for overall loan growth and deposit growth for the current financial year. The bank expects advances to grow 11-13% in FY26 and deposits to rise 9-11%. As of Jun. 30, the bank's advances were up 12.6% on year and deposits up 9.1%.
Chand expects the cost of deposits to fall below 5% in the September quarter. Bank of Baroda's global cost of deposits eased to 5.05% in Apr-Jun from 5.12% a quarter ago.
The bank is looking to increase its co-lending exposure significantly moving ahead, Chand said. "Initially, there were challenges in terms of technical integration, clarity on some aspects of accounting," the MD said. "Now all these are clarified. So, we are working to increase co-lending exposure vis-a-vis NBFC."
Friday, the bank's shares ended 1.4% lower at INR 243.45 on the National Stock Exchange. The bank announced its earnings after market hours. End
Reported by Shubham Rana and Ashutosh Pati
Edited by Saji George Titus
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