Bank of Baroda Q1 profit slumps 72% on ₹5,680-crore NMC settlement charge; core business stays resilient

Bank of Baroda on Friday reported a sharp 72% year-on-year decline in net profit for the June quarter after booking a one-time exceptional loss of ₹5,680 crore to settle long-running litigation related to the collapse of UAE-based healthcare firm NMC Group.

The state-owned lender posted a net profit of ₹1,278 crore for the quarter ended June 30, compared with ₹4,541 crore a year ago. However, the headline decline masked a resilient core operating performance, with net interest income (NII) rising 9.5% to ₹12,524 crore from ₹11,435 crore in the corresponding quarter last year.

The bank said it recognised an exceptional loss of $600 million (about ₹5,680 crore) during the quarter following a settlement agreement dated July 1, 2026, with the administrators of NMC Health PLC and related entities. The legal proceedings, initiated before the Abu Dhabi Global Market Court of First Instance and the England & Wales High Court, arose from the insolvency of the NMC Group after alleged fraud by its shareholders and management between 2012 and 2020.

"Without considering the exceptional item, net profit stood at ₹5,528 crore," the bank said in its investor presentation, indicating that the underlying business remained on a healthy footing despite the one-off charge.

Core banking business remains steady

Operating profit remained broadly stable at ₹8,127 crore, compared with ₹8,236 crore in the year-ago quarter, while provisions surged to ₹6,323 crore, largely due to the exceptional settlement.

Asset quality, however, showed mixed trends. On a sequential basis, the gross non-performing asset (GNPA) ratio edged up to 1.99% from 1.89%, while the net NPA ratio rose to 0.50% from 0.45%. On a year-on-year basis, both metrics improved from 2.28% and 0.60%, respectively.

The bank's global business continued to expand, with global deposits rising 13.8% year-on-year to ₹16.34 lakh crore and global advances increasing 17.4% to ₹14.17 lakh crore, reflecting healthy credit demand across domestic and overseas operations.

Separately, Bank of Baroda's board approved an enhancement of its overseas fundraising framework by retaining its $4 billion Medium Term Note (MTN) programme while carving out a $1 billion sub-limit for Green and ESG bond issuances. The board also doubled the borrowing limit under overseas loan facilities, including syndicated and bilateral loans, to $10 billion from $5 billion.