Bank of Baroda's strong credit rating affirmed for Tier II bonds

CareEdge Ratings has reaffirmed its "CARE AAA; Stable" rating for Bank of Baroda’s Tier II Bonds, citing the bank's majority government ownership, strong financial support, and systemic importance. This positive outlook is further supported by the bank's established franchise, pan-India branch network, competitive deposit rates, and a significant international presence, with approximately 17% of total advances as of March 31, 2025.

The bank’s financial performance highlights include a 12.83% growth in gross advances in FY25, reaching ₹1,209,558 crore as of March 31, 2025. Total deposits grew by ~11% to ₹1,472,035 crore, and the bank reported a net profit of ₹19,581 crore for FY25, an increase of ~10% from the previous year. Capital adequacy remains strong, with a CAR of 17.19% and CET I ratio of 13.78% as of March 31, 2025, comfortably above regulatory minimums.

CareEdge Ratings noted improvements in asset quality, with the gross non-performing assets (GNPA) ratio improving to 2.26% and the net non-performing assets (NNPA) ratio to 0.58% as of March 31, 2025. This, coupled with lower slippages and credit costs, contributed to enhanced profitability. The bank expects to maintain a slippage ratio of under 1% going forward, which is key to sustaining stable asset quality.