CRISIL Ratings has reaffirmed its ratings on Bank of Baroda’s debt instruments at ‘Crisil AAA/Stable’ and ‘Crisil AA+/Stable’. These ratings reflect the expectation of strong government support, an established franchise, a strong market position in the Indian banking sector, and adequate capitalization. The ratings also consider improving asset quality, though this remains elevated in the MSME and agriculture sectors. The ratings considered the bank’s moderate profitability metrics.
Ratings Reaffirmed
CRISIL Ratings has reaffirmed its ratings on the debt instruments of Bank of Baroda (BoB) at ‘Crisil AAA/Crisil AA+/Stable’. The ratings factor in the expectation of strong support from the majority owner, the Government of India (Gol). The ratings also benefit from BoB’s established franchise and strong market position within India’s banking sector.
Key Strengths
The ratings continue to reflect expectations of strong government support, both ongoing and in times of distress, given that the government is the majority shareholder. The stability of the banking sector is a priority for the government, underscored by its support for Public Sector Banks (PSBs).
Asset Quality
BoB has reported improvements in asset quality, with gross non-performing assets (GNPA) improving to 2.2% as of September 30, 2025, compared to 2.3% as of March 31, 2025, and 2.9% as of March 31, 2024. Improvements are noted in the corporate book, while asset quality in the MSME and agriculture segments remains elevated at 7.1% and 4.8%, respectively, as of September 30, 2025.
Financial Performance
The standalone profit after tax (PAT) was reported as Rs 19,581 crore (consolidated: Rs 20,459 crore) in fiscal year 2025 and Rs 17,789 crore (consolidated: Rs 18,410 crore) in fiscal 2024. The standalone return on assets (ROA) has been upwards of 1.0%. However, the net interest margin (NIM) contracted to 2.58% for H1 fiscal 2026 from 2.71% in fiscal 2025.
Capitalization & Liquidity
BoB maintains adequate capitalization. The Tier I and overall CAR (under Basel III) stood at 14.15% and 16.54%, respectively, as of September 30, 2025. The liquidity coverage ratio was 121% on a consolidated basis as of September 30, 2025, exceeding the regulatory minimum.
ESG Initiatives
Bank of Baroda has set an aspiration to achieve Net Zero by 2057. In fiscal year 2024-25, a dedicated Climate Risk Cell was established for overseeing green finance and sustainability efforts. Over 210 branches are run on solar energy and water conservation efforts save approximately 30 lakh liters of water a year.
Outlook
The outlook for Bank of Baroda is stable, with the expectation that the bank will maintain its market position and continue to benefit from strong government support.
Source: BSE
