Is Bank Of Baroda Still A Buy? CEO Reveals What's Next After Q1 Earnings | Business News | ET Now Bank of Baroda reported its Q1 FY27 earnings, with margins under pressure but management remaining confident about growth ahead. In this exclusive ET Now interview, CEO Debadatta Chand discusses NIM guidance, ECL implementation, ROA outlook, capital raising plans, CASA growth, FCNR deposits, and the bank's strategy for sustaining credit growth. Watch the full conversation for key insights into one of India's leading PSU banks. #bankofbaroda #q1results #psubanks #bankingstocks #stockmarket #earning...
What Debadatta Chand said
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Debadatta Chand, MD & CEO of Bank of Baroda, discussed Q1 FY27 earnings and outlook. He reaffirmed the net interest margin guidance of 2.75-2.95%, citing strong NII growth of 9.5% and cooling wholesale rates post-FCNR(B) measures. On ROA, he noted 16-17 quarters above 1%, but Q1 was below due to an exceptional item; revised guidance will come post-Q2. He detailed the ECL impact: 110 bps on CET1, offset by a 2,500 crore floating provision, with annual CET1 impact of 20-22 bps, and plans to raise 8,500 crore equity by March 2028 and 6,000 crore Tier-2. Fee income weakness was market-linked, with treasury income down from 2,200 crore to 800 crore. He expects FCNR(B) deposits to cross $2 billion by September, and raised overseas borrowing limits to $10 billion. Credit growth was 17.4%, with full-year guidance at 12-14%.
Key takeaways
Reaffirmed NIM guidance of 2.75-2.95% for FY27, expecting to stay within range.
ECL impact on CET1 estimated at 110 bps, with annual impact of 20-22 bps after netting floating provision.
Plans to raise 8,500 crore equity by March 2028 and 6,000 crore Tier-2 capital.
FCNR(B) deposits expected to cross $2 billion by September 2026.
Full-year credit growth guidance maintained at 12-14%, with Q1 growth at 17.4%.
Okay, all right. So that's the take, but let me take it across. We have Mr. Debadatta Chand who is a CEO and managing director of Bank of Baroda joining us this morning. Sir, last quarter, Mr. Chand, you had indicated that asset repricing would gradually offset sticky deposit cost. Q1 margins are actually lower. So you're continuing to see pressure. What's the outlook going forward?
As far as the margin is concerned, we continue to have the guidance of 2.75 to 2.95. If you look at the June quarter, which is the last quarter, the NII growth has been very strong at 9.5%. Whereas the asset growth has been higher than 9.5%, putting pressure on margin obviously for that factor. But currently, two trends that we're looking into the market: particularly a bit of a corporate non-MCLR linked book, we are looking at a repricing of those. It's happening also. At the same time, post the announcement of the FCNR(B) measures, the wholesale market has also cooled down. So considering both the factors, I think the margin guidance of 2.75 to 2.95, we'll be in a position to be within those guidance.
Right. Excluding the exceptional overseas provision, Mr. Chand, the underlying profitability remains healthy for you. Is it fair to assume that the bank can sustainably deliver 1.1% plus ROA through the cycle?
Look, we have been for the last 16-17 quarters having a ROA in excess of one. And this quarter, because of the exceptional item, it is below one. While we are hopeful that Q2, Q3, Q4 the ROA is going to be more than one. But on a full-year basis, because of this impact, obviously the ROA is under watch by us. Any revised guidance, I said, we'll be announcing post the Q2. Because a couple of onside and one offside also we are looking at. Once those things should crystallize, possibly we'll be in a better position to articulate the ROA guidance. But we are hopeful that quarter to quarter from now onwards we'll be in a position to achieve ROA more than one, but hopefully we'll give a guidance related.
And you had earlier indicated that the final ECL impact would likely be lower than the initial estimates. Now that calculations are more advanced, you've guided for around 110 bps. But give us a sense on impact from a timeline and from a CET1 perspective. Just give us a sense.
So two impacts here now. I mean, the guidelines has been issued. The bank is preparing itself both in terms of technology application and the migration. On the estimate as in today, in terms of the actual calculation, we expect the impact on the CET1 would be almost like 110 bps. Which can be spread over. But again, to remind you that we are also holding a floating provision of 2,500 crore, which can be well adjusted against that. At the same time, on the credit cost side, we are expecting the impact to be 15 to 20 bps. If you look at as in today, my credit cost is 0.29 as in June. And we have given a guidance of 0.6, so I think within the scope of 0.6, the credit cost can be absorbed there. So the bank's capital adequacy is quite comfortable. The CET1 as in today is 13.9. So even if you factor in the amortizing the one-time impact, netting off the floating provision, it can be — I mean, year to year the CET1 impact can be 20 to 22 bps. Which currently the capital is quite adequate. Notwithstanding that, we also articulated for raising capital in the medium-term outlook. Where we almost intend to raise 8,500 crore of equity by March 2028. And also buffer up in terms of a 6,000 crore of the Tier Two instrument. So I think the bank is well capitalized. The ECL migration is going to be smooth. And the bank should have sufficient capital for growth in the future.
Your core fee income was weaker this quarter despite healthy business growth. Was this largely timing related or does it reflect a structural change in the business mix? And when should we expect normalization?
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Chand, D. (2026, July 27). Is Bank Of Baroda Still A Buy? CEO Reveals What's Next After Q1 Earnings | Business News | ET Now [Interview transcript]. ET Now. CEOInterviews.AI. https://ceointerviews.ai/interview/1193022/
MLA
Debadatta Chand. "Is Bank Of Baroda Still A Buy? CEO Reveals What's Next After Q1 Earnings | Business News | ET Now." ET Now, 27 Jul. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1193022/.
BibTeX
@misc{chand2026_1193022,
author = {Debadatta Chand},
title = {Is Bank Of Baroda Still A Buy? CEO Reveals What's Next After Q1 Earnings | Business News | ET Now},
howpublished = {Interview transcript, ET Now. CEOInterviews.AI},
year = {2026},
month = {jul},
url = {https://ceointerviews.ai/interview/1193022/},
note = {Speaker-attributed transcript with timestamps}
}
