Bank of Baroda has received confirmation from ICRA, which assigned an [ICRA] AAA (Stable) rating to the bank’s Long Term Green Infrastructure Bonds. Existing ratings were also reaffirmed as of February 25, 2026. The rating reflects the bank’s strong sovereign ownership, robust franchise, strong capitalization profile, and improving asset quality indicators, maintaining a stable outlook.
Credit Rating Update Announcement
Bank of Baroda has disclosed crucial information regarding its credit ratings following a review by ICRA on February 25, 2026. The rating agency has assigned an [ICRA] AAA (Stable) rating to the bank’s Long Term Green Infrastructure Bonds and has reaffirmed the existing ratings across various instruments.
Summary of Rating Actions
The total rated amount has increased from Rs. 6,950.00 crore to Rs. 16,500.00 crore, primarily driven by the assignment of a new rating for Infrastructure Bonds. Key actions summarized:
- Basel III Tier-I bonds: [ICRA]AA+ (Stable); reaffirmed.
- Basel III Tier II bonds: [ICRA]AAA (Stable); reaffirmed and withdrawn, as these bonds were fully redeemed.
- Infrastructure bonds (#): [ICRA]AAA (Stable); reaffirmed for Rs. 1,000.00 crore.
- Infrastructure bonds (^ – Green Bonds): [ICRA]AAA (Stable); newly assigned for Rs. 10,000.00 crore.
Rationale for Stable Outlook
The ratings continue to be supported by the bank’s sovereign ownership and leading position as the second largest public sector bank (PSB) by advances as of December 31, 2025. Key strengths cited by ICRA include:
- Capitalization: Strong capital ratios (CET I at 12.45% as of December 31, 2025), supporting self-sufficiency for growth and stress absorption.
- Asset Quality: Continued moderation in overdue and restructured assets, supported by a high provision cover on legacy stressed assets.
- Profitability: Operating profitability moderated slightly in 9M FY2026 due to NIM compression, but remained healthy with Return on Assets (RoA) at 1.05%.
Key Credit Challenges
Asset quality remains a monitorable factor, specifically the bank’s ability to limit slippages from the existing vulnerable book. Additionally, the impact of geopolitical issues and macroeconomic shocks on borrowers, particularly MSMEs, could affect asset quality metrics in the near-to-medium term.
Liquidity and Solvency
The bank’s liquidity position is assessed as Superior, with the daily average Liquidity Coverage Ratio (LCR) standing at 126.04% in Q3 FY2026. The solvency level improved to 6.3% as on December 31, 2025, benefiting from high provision cover and steady core capital accretion. The Stable outlook reflects the expectation of sustained liability profile, asset quality stability, and internal capital generation.
Source: BSE
