More Stories

Informist, Friday, Jul. 24, 2026

--Bank of Baroda: Credit growth FY27 seen at 12-14%, deposit growth 10-12% 

--CONTEXT: Comments by mgmt of Bank of Baroda in post-earnings analyst call 

--Bank of Baroda: Co's IT budget for FY27 is in excess of INR 40 bln 

By Meera Nair and Anand JC 

MUMBAI – Bank of Baroda expects return on assets to recover to above 1% from the September quarter after taking the full impact of the $600-million settlement in the long-pending NMC Group litigation in the June quarter, Managing Director and Chief Executive Officer Debadatta Chand said in the post-earnings analysts' call Friday.

Chand reiterated that the settlement closes a legacy cross-border litigation and allows the bank to focus on growth while preserving certainty over a prolonged legal process. However, he said the bank's recovery proceedings against the principal individual involved in the case would continue both in India and overseas. 

The bank maintained its guidance of 12-14% credit growth, 10-12% deposit growth and net interest margin of 2.75-2.95% – all for 2026-27 (Apr-Mar)- despite reporting stronger-than-guided business growth in the June quarter.

While global advances rose 17.4% on year and deposits grew 13.8%, Chand said the bank preferred to retain a cautious stance because of geopolitical uncertainties.

"We continue to hold the same credit growth guidance of 12-14%. Although we are outperforming, geopolitical developments make us slightly cautious at this point," he said.

Chand said the budget for information technology-related expenses for FY27 is in excess of INR 40 billion. He then added that the bank has already announced plans to raise up to INR 85 billion of equity by March 2028 and remains comfortably capitalised with a capital adequacy ratio of 16.3%.

"So, currently, as on today, 16.3%, I do not feel there is an immediate requirement. But since the bank is growing strongly because 16-17% advance growth is something... sustaining that on the capital fund is difficult. So, bank may raise capital. But that would depend upon the timing of our equity raise and the price at which we can raise the market," Chand said. 

The management also indicated that banks may eventually have to reprice loans to reflect the higher cost arising from the implementation of the expected credit loss norms, although any changes are expected to depend on regulatory guidelines which govern repricing of loans.

"We have to see the regulatory guidelines because there are certain conditions at which you can change the spread before that three years norms that we have. So, we have to see on that", Chand said. 

Chand later said the lender has been improving pricing on corporate loans which are not linked to marginal cost of funds-based lending rate by shifting them closer to MCLR-based pricing while also benefiting from easing wholesale funding costs after the launch of the foreign currency non-resident (bank) deposit scheme.

"In terms of incremental bulk deposit, I think the average cost is now lower than that of March. So, considering those two scenarios, but the asset continued to grow faster, asset growth of 16-17% would put pressure on margin and also on the capital adequacy, which we are managing it well," Chand said with regard to the pricing of non-MCLR-linked corporate loans.  The bank expects these factors to help offset pressure from rapid balance sheet expansion. 

On Friday, shares of Bank of Baroda closed 1.4% higher at INR 246.45 on the National Stock Exchange.  End

Edited by Deepshikha Bhardwaj

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 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.