Mumbai: Public sector lender Bank of Baroda has received a ‘BBB+/Stable’ long-term foreign currency issuer rating from CareEdge Global. The rating also extends to the bank’s USD 4 billion Global Medium-Term Notes (GMTN) programme, reflecting strong sovereign support and stable financial fundamentals.
The rating was disclosed by the bank under Regulation 30 of SEBI (LODR) norms.
Stable Outlook Linked to India’s Sovereign Rating
The stable outlook assigned to Bank of Baroda is aligned with the sovereign rating outlook of India. The agency noted that:
- Any downgrade in India’s sovereign rating could negatively impact the bank’s rating
- An upgrade in sovereign rating could lead to an upward revision
- The bank’s credit profile is strongly linked to expected government support
CareEdge highlighted that the government held around 63.97% stake in the bank as of March 31, 2026.
Strong Sovereign Backing and Systemic Importance
The rating agency emphasized the bank’s strong linkage with the Government of India and its systemic importance:
- Second-largest public sector bank in India by advances
- ~5.5% share in domestic lending market
- Critical role in financial inclusion and policy transmission
This strong government backing remains a key pillar supporting the rating.
Strong Business Franchise and Network
Bank of Baroda continues to maintain a strong domestic and international presence:
- Total assets: ₹21.02 trillion (FY26)
- Over 8,600 domestic branches
- More than 9,500 ATMs
- Operations in 15 countries through 80 overseas offices
The bank also reported a healthy funding base with:
- Deposit growth of ~12% YoY to ₹16.49 trillion
- CASA ratio of 37.2%
Capital and Liquidity Position Remains Strong
The lender’s capital adequacy and liquidity indicators remain robust:
- Capital Adequacy Ratio (CAR): 15.8%
- CET-1 Ratio: 13.2%
- Liquidity Coverage Ratio (LCR): 127%
These metrics indicate strong buffer levels to absorb financial stress.
Asset Quality Shows Continued Improvement
CareEdge Global noted steady improvement in asset quality performance:
- Gross NPA (GNPA): 1.9% (as of March 31, 2026)
- Net NPA (NNPA): 0.4%
- Provision Coverage Ratio: ~77%
However, the agency flagged moderate risks in MSME and agricultural loan portfolios, where stress levels remain comparatively higher.
Profitability Slightly Moderates in FY26
Bank of Baroda reported a slight decline in profitability:
- FY26 Profit After Tax: ₹198 billion (vs ₹207 billion in FY25)
- Return on Assets (RoA): 1.0% (down from 1.2%)
The moderation was attributed to margin pressure and lower non-interest income, although lower credit costs supported earnings stability.
Outlook Remains Stable on Government Support
CareEdge Global stated that the stable outlook reflects:
- Continued sovereign backing
- Strong systemic importance
- Stable franchise and funding profile
Any change in India’s sovereign rating outlook may directly influence the bank’s credit rating trajectory.
About Bank of Baroda
Bank of Baroda is one of India’s leading public sector banks with a strong domestic and global presence. It offers a wide range of banking and financial services across retail, corporate, and international banking segments, and plays a key role in supporting India’s credit growth and financial inclusion initiatives.
Read also: Bank of Baroda Targets 10% Corporate Loan Growth with ₹50,000 Crore Lending Pipeline in FY27
