Net interest income-difference between interest paid to depositors and interest earned on loans-fell nearly 7% YoY to ₹11,020 crore in the fourth quarter. NII climbed 2% for the full financial year, while NIM moderated to 3.02% from 3.18% a year ago. However, non-interest income, which includes treasury gains, surged 24% in the March quarter to ₹5,210 crore, boosting the bank’s bottom line.
Debadatta Chand, MD of Bank of Baroda, said muted NII growth was because of higher cost of deposits, which is in line with market trends. The cost of deposits peaked in the March quarter and have moderated since then. However, the pressure on NIM is expected to continue for June and September quarters as repricing of deposit rate plays out.
“Q3 and Q4 (second half of FY26), NIM would pick up as the liability structure aligns with the lower deposit rate, where the fresh deposit gets repriced at lower rate. I am fairly confident of maintaining NIM around 3%,” he said at the post earnings press meet.
Chand said the bank will share guidance of NIM along with June quarters earnings because it would like to see how central bank’s 50 bps cut in policy repo rate since February plays out amid surplus liquidity conditions. He said that easy liquidity conditions may boost loan and deposit growth by 100-200 basis points over the guided range. For FY26, the bank has maintained the loan growth guidance of 11-13% and 9-11% for deposit growth.
Bank of Baroda’s total loans grew nearly 13% YoY to ₹12.3 lakh crore as the end of March, while total deposits rose over 10% to ₹14.7 lakh crore.
