Fitch affirms Bank of Baroda's rating at 'BBB-'

Fitch Ratings affirmed Bank of Baroda's (BOB) long-term issuer default ratings (IDR) at 'BBB-' with a Stable Outlook, effective March 28, 2025. The affirmation reflects Fitch's assessment of the high probability of extraordinary state support for BOB, considering the Indian government's 64% ownership and BOB's position as India's second-largest state bank. Key drivers include the government support rating, BOB's strong nationwide reach, and improving asset quality. The bank's viability rating (VR) was affirmed at 'bb-'. Loan growth slightly decelerated to 11.8% in the nine months to the financial year ending March 2025, as compared to 12.5% in FY24. The bank’s common equity Tier 1 (CET1) ratio increased to 14.1% in 9MFY25. Fitch revised the outlook for the asset-quality score to positive, and expects BOB to retain the improvement in its impaired-loan ratio and forecasts the ratio at around 2.5% by FY27.