State-owned Bank of Baroda (BoB) reported a 72 per cent year-on-year decline in standalone net profit to Rs 1,278 crore for the quarter ended June 30, 2026, after absorbing a one-time exceptional charge related to its settlement of litigation involving the collapsed UAE-based healthcare group NMC Health.
The bank booked an exceptional charge of around Rs 5,680 crore following its $600 million out-of-court settlement with the joint administrators of NMC Health, significantly impacting quarterly earnings. Excluding the one-off item, net profit would have stood at Rs 5,528 crore, indicating a stronger underlying operating performance.
Core Banking Performance Remains Robust
Despite the exceptional hit, the lender reported healthy business growth during the quarter.
Net interest income (NII) rose 9.5 per cent year-on-year to Rs 12,525 crore, supported by robust credit expansion, while interest income increased 6.8 per cent to Rs 33,211 crore.
The bank's loan book continued to expand, driven by strong momentum across retail and other key segments, underscoring the resilience of its core banking operations.
Asset Quality Stays Stable
Bank of Baroda maintained stable asset quality despite the earnings impact of the settlement.
Its gross non-performing asset (GNPA) ratio stood at 1.99 per cent at the end of June, compared with 1.89 per cent in the previous quarter, reflecting only a marginal increase. The lender also reported lower provisions excluding the exceptional item.
Settlement Driven By Commercial Considerations
Managing Director and Chief Executive Officer Debadatta Chand said the decision to settle the long-running NMC Health litigation was driven by commercial considerations and the advanced stage of the legal proceedings, rather than any change in the bank's legal position.
He added that the settlement removes a prolonged legal overhang and allows the bank to focus on its growth strategy while maintaining its business guidance for FY27.
Growth Outlook Remains Intact
The lender retained its growth outlook, citing strong credit demand and stable operating fundamentals. Management expressed confidence that the exceptional charge is a one-off event and that the bank remains well-positioned to deliver sustainable growth in the coming quarters. |
