CARE Ratings has reaffirmed its existing credit ratings for Bank of Baroda’s debt instruments. The Tier II bonds and Green infrastructure bonds maintained the highest rating of CARE AAA; Stable. Additionally, the rating for the Certificate of Deposit was reaffirmed at CARE A1+. These affirmations reflect the continued expectation of strong systemic support from the Government of India, which holds a majority stake, and the bank’s robust capital structure and market franchise.
Credit Rating Reaffirmation Announcement
Bank of Baroda (BOB) announced that CARE Ratings has reaffirmed the existing credit ratings for its key long-term instruments and short-term instruments as of February 27, 2026. The ratings continue to be anchored by the majority ownership and expected support from the Government of India (GoI), recognizing BOB’s status as one of India’s largest Public Sector Banks (PSBs).
Key Rating Outcomes
The reaffirmation process assessed various facilities, confirming stable performance metrics:
- Green infrastructure bonds (₹10,000.00 crore): Reaffirmed at CARE AAA; Stable.
- Tier II bonds (various issuances totaling ₹3,400.00 crore): Reaffirmed at CARE AAA; Stable.
- Certificate of Deposit (₹1,10,000.00 crore, enhanced from ₹20,000.00 crore): Reaffirmed at CARE A1+.
Rationale for Stability
Ratings strength is derived primarily from the GoI’s majority ownership (63.97% as of December 31, 2025) and systemic importance. The bank maintains a long track record, a strong pan-India franchise, and a significant international presence, with net advances reaching ₹1,209,558 crore by March 31, 2025.
Financial Health and Capitalization
BOB maintains comfortable capitalization levels. As of March 31, 2025, the Capital Adequacy Ratio (CAR) stood at 17.19%, significantly above the regulatory minimum of 11.5% (including the buffer). Profitability showed improvement, with a Return on Total Assets (ROTA) of 1.17% in FY25. However, the Net Interest Margin (NIM) is expected to see some pressure in FY26, contracting to 2.56% for 9MFY26 against 2.83% for 9MFY25.
Asset Quality Improvement
Asset quality has been moderating favorably. The Gross NPA (GNPA) ratio improved to 2.26% as of March 31, 2025 (down from 2.92% previously), settling at 2.04% by December 31, 2025. The Net NPA (NNPA) ratio stood at a low 0.58% on March 31, 2025. The bank’s ability to keep the slippage ratio under 1% going forward remains a key monitorable.
Liquidity Profile
The bank’s liquidity profile is deemed Strong, supported by a stable retail and CASA depositor base. Key liquidity metrics as of December 31, 2025, showed a Liquidity Coverage Ratio (LCR) of ~117.25% and a Net Stable Funding Ratio (NSFR) of ~118.34%, both exceeding the 100% regulatory requirement.
Source: BSE
