Bank of Baroda: Soft core performance; PAT cushioned by lower credit costs

研报英文原文证据摘录

Bank of Baroda: Soft core performance; PAT cushioned by lower credit costs

Global Markets Research

Bank of Baroda BOB.NS BOB IN 27 July 2026

EQUITY: BANKS

Soft core performance; PAT cushioned by lower credit costs Rating Remains Neutral

Target price

Maintain Neutral with lower TP Reduced from INR INR 280 300

BOB's 1QFY27 results were soft, with core-PPOP at INR64.8bn (+13% y-y, -19% q-q), 4% Closing price INR 246 24 July 2026below our estimate. The miss was driven by lower fee income, while core-NIM held stable q-q

and opex came in lower. The bank fully absorbed a legacy litigation settlement with NMC

Implied upsideGroup of INR56.8bn during the quarter. Credit costs were sharply lower at 18bp (vs a 45bp +13.8%

average over the previous four quarters, and our 40bp estimate), despite gross slippages

Market Cap (USD mn) 13,201.3

staying largely stable. PCR declined 160bp q-q to 75%. As a result, PAT (adjusted for one- ADT (USD mn) 38.3

offs) stood at INR55.3bn (down 2% q-q), 11% above our estimate. On ECL implementation (in

FY28F), the one-time impact on net worth is expected by management to be 110bp, with credit Relative performance chart

cost run-rate rising 15-20bp. On FX mobilization under the recent RBI schemes, BOB has

raised USD0.6bn so far and expects to mobilize USD4-5bn. We cut FY27F EPS by 13%, led

by the NMC settlement, while lower fee income is largely offset by lower opex, leaving FY28F

EPS broadly unchanged. We maintain our Neutral rating.

Soft sequential loan and deposit growth

Gross loan growth was healthy at 18% y-y, but declined sequentially (-1% q-q) in 1Q27 as the

bank let go of certain finely priced corporate loans (-7% q-q). RAM segment growth was led by

Retail (2%/18%) and MSME (2%/20%), while Agri (0.5%/19%) growth was muted

sequentially.