Fitch Affirms Bank of Baroda at BBB-; Viability Rating Upgraded to bb

Mumbai, 25 February 2026: Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of Bank of Baroda (BOB) and its wholly-owned subsidiary Bank of Baroda New Zealand at ‘BBB-’ with a Stable Outlook. In addition, Fitch has upgraded BOB’s Viability Rating (VR) from ‘bb-’ to ‘bb’, reflecting improved financial performance.

Key Highlights from Fitch Ratings:

Government Support: BOB’s ratings reflect India’s sovereign rating (BBB-/Stable), highlighting strong government backing due to 64% ownership and the bank’s role as India’s second-largest state-owned bank.
Improved Financial Profile: The VR upgrade is supported by better asset quality, capitalization, and profitability, expected to continue in a strengthening operating environment.
Strong Nationwide Reach: BOB’s large network and robust local franchise provide stability in business and profit generation.
Risk Profile & Asset Quality: The bank has improved underwriting standards, diversified loans, and reduced legacy bad loans. Impaired loans are around 2%, and loan-loss coverage remains healthy at 72%.
Profitability & Capital: Operating profit relative to risk-weighted assets is expected to remain around 2.7%, and the CET1 ratio is expected above 13% by FY27.
Funding & Liquidity: BOB’s loan-to-deposit ratio is 86.9%, with a liquidity coverage ratio of 116%, ensuring strong financial stability.

Subsidiary Impact:

Bank of Baroda New Zealand’s ratings are aligned with the parent bank due to strong shareholder support and legal guarantees from BOB.

Outlook:

Fitch expects that BOB will maintain steady performance in the near term, supported by India’s growing economy and strengthened regulatory environment for banks. Any future upgrades or downgrades will depend on changes in the operating environment, risk profile, and government support.

S. Balakumar, Company Secretary, Bank of Baroda, informed the exchanges that this update reinforces the bank’s position as a well-capitalized, profitable, and well-supported state bank with a stable outlook.

This rating affirmation and VR upgrade reflect BOB’s improved operational strength, strong governance, and ongoing commitment to financial discipline and risk management.