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Informist, Wednesday, Jan. 28, 2026

By Shweta

MUMBAI – State-owned Bank of Baroda is expected to post a single-digit year-on-year fall in net profit for the December quarter due to higher provisions and a lower net interest margin, according to analysts tracking the company. The bank is likely to make higher provisions as it prepares for the Reserve Bank of India's new norms on provisions for expected credit loss.

The bank's net profit is likely to fall over 3% on year to INR 46.74 billion, as per the average of estimates from 11 broking firms. The public-sector bank had reported a net profit of INR 48.37 billion for the year-ago quarter and of INR 48.09 billion for the September quarter. The highest estimate for the company's net profit is INR 52.18 billion by Emkay Global Financial Services Ltd. The lowest estimate is INR 35.13 billion by Prabhudas Lilladher Pvt. Ltd., factoring in a decline in other income and higher provisions. The bank will detail its December quarter earnings Friday.

The Vadodara-headquartered bank's net interest income is expected to grow more than 6% on year to INR 121.55 billion for the December quarter, according to the average of estimates. The bank had posted a net interest income of INR 119.54 billion for the September quarter. The highest estimate for the company's December quarter net interest income is INR 126.03 billion from Nirmal Bang Equities Pvt. Ltd. and the lowest is INR 114.50 billion from Prabhudas Lilladher.

The rise in net interest income is driven by loan growth, with vehicle loan disbursements rising due to festival season demand and the cut in goods and services tax, according to Emkay Global.

The bank's global advances rose 14.6% on year to INR 13.44 trillion as on Dec. 31. Its domestic advances rose 13.5% on year to INR 10.96 trillion. Global deposits rose 10.3% on year to INR 15.47 trillion as on Dec. 31 and domestic deposits rose 11.1% on year to INR 13.07 trillion. Though the bank's loan book is expected to grow by nearly 15% on year, its net interest income is likely to rise only 6% on year for the reporting quarter.

The state-owned bank's net interest margin is expected to fall up to 11 basis points to 2.9% on year in the December quarter, "reflecting the impact of the RBI's 125 bps repo rate cut between February-December 2025", according to a report by YES Securities (India) Ltd. The lender had reported a net interest margin of 2.96% in the trailing quarter.

The bank's provisions for the reporting quarter are likely to increase as it had said it may need to set aside more funds to adopt the RBI's new norms on provisioning for expected credit loss. The bank had set aside INR 4 billion as provisions in the September quarter for the expected credit loss framework, Managing Director and Chief Executive Officer Debadatta Chand had told analysts after the September quarter results.

The lender is expected to make provisions of INR 13.89 billion for the December quarter, according to estimates from six brokerages. At the higher end, according to Prabhudas Lilladher, the bank is expected to make provisions that are 48% higher on year. The bank had made total provisions of INR 10.82 billion for the December quarter in FY25.

Among key metrics, slippages for the quarter are expected to rise on year due to agriculture-related loans, according to Elara Securities (India) Pvt. Ltd. Asset quality trends, continued business momentum, trajectory of return on equity and transition impact on expected credit loss, both on outstanding and flow basis, are the other metrics to track during the December earnings announcement, the brokerage said.

During the quarter, Bank of Baroda had received $29.39 million from the voluntary liquidation of India International Bank Malaysia, in which the public-sector lender held 40% stake.

Shares of the bank have risen over 5% since its September quarter earnings announcement. Wednesday, the shares ended 1% higher at INR 306.20 on the National Stock Exchange.

Of the 22 brokerage reports on the bank available with Informist, 19 have a "buy" recommendation on the stock with a target price of INR 313 per share. This is over 2% higher than the current share price. Two brokerages have a "hold" recommendation with an average target price of INR 305 per share, while one has a "sell" recommendation.

Following are the December quarter earnings estimates from 11 brokerages, in INR billion, for Bank of Baroda in descending order of the net profit estimate:

End

US$1 = INR 91.78

Edited by Rajeev Pai

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