Bank of Baroda's Ratings Reaffirmed by CARE Ratings with Stable Outlook
Bank of Baroda's credit ratings reaffirmed by CARE Ratings with a stable outlook. Infrastructure bonds (₹10,000 crore) and Tier II bonds (₹2,500 crore) rated CARE AAA; Stable. Certificate of Deposit rated CARE A1+. FY26 PAT ₹20,021 crore. Q1FY27 PAT ₹1,278 crore after ₹5,680 crore provision for NMC settlement.
Credit rating reaffirmations with a stable outlook are important for investor confidence and borrowing costs. While positive, it doesn't represent a significant new development or a drastic change in the bank's financial standing.
The credit ratings have been reaffirmed with a stable outlook, indicating continued confidence in the bank's financial health and stability. Key financial metrics and asset quality improvements are positive indicators.
Bank of Baroda (BOB) announced that CARE Ratings has reaffirmed its credit ratings for the bank's various instruments, maintaining a stable outlook. The ratings cover infrastructure bonds of ₹10,000 crore and Tier II bonds totaling ₹2,500 crore, all reaffirmed at CARE AAA with a Stable outlook. Additionally, the Certificate of Deposit rating was reaffirmed at CARE A1+.
The rating rationale highlights the majority ownership by the Government of India and the expectation of continued support, given BOB's systemic importance. The established franchise, pan-India branch network, and substantial international presence were also cited as strengths. The bank's comfortable capitalization levels and improvement in asset quality ratios, leading to lower credit costs and supported profitability, were also factored in.
CARE Ratings expects moderation in BOB's profitability in FY27, primarily due to a one-time provision of ₹5,680 crore related to an out-of-court settlement concerning NMC Health PLC. Ratings for Tier-II Bonds (ISIN: INE077A08098) were withdrawn due to redemption on the due date.
The report also detailed BOB's financial performance, including a net profit of ₹20,021 crore for FY26 and a net profit of ₹1,278 crore for Q1FY27. The bank's gross advances grew by approximately 16% in FY26. Asset quality saw improvement, with the Gross NPA ratio at 1.89% as of March 31, 2026, and the Net NPA ratio at 0.45%. The bank's liquidity profile is strong, supported by its retail and CASA depositor base, with a Liquidity Coverage Ratio of approximately 127% and a Net Stable Funding Ratio of around 120% as of June 30, 2026.
Regarding ESG risks, the bank reported a potential business email compromise incident but does not expect a material impact on operations. The bank's board comprises 10 directors, including three independent directors and two female directors.
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