BOB vs SBI: These days, if any public sector bank in the Indian banking sector is living up to investors’ expectations, it’s Bank of Baroda (BOB). After delivering impressive Q3 FY26 results, BOB has proven that it’s not just a “government bank,” but a rapidly growing and efficiently run institution. Strong NIMs (net interest margins) and its increasing focus on international business set it apart from other PSU banks.
Record Performance in NIMs and Profits
Bank of Baroda surprised everyone in the third quarter. The bank’s net profit increased by 25% to over ₹4,500 crore, far exceeding analyst estimates. BOB has maintained its NIMs at around 3.40%, a commendable performance despite interest rate volatility. This means the bank has been able to maintain a healthy gap between its lending and deposit-taking costs. International business contributes approximately 20-22% to BOB’s total profits, diversifying its income and protecting it from domestic market fluctuations.
International Expansion
Bank of Baroda is one of the few public sector banks in India with a strong overseas presence. It has branches and subsidiaries in major global financial centers such as London, New York, Dubai, and Singapore. This international network not only helps the bank generate foreign exchange earnings but also provides a stable and low-cost deposit base by attracting Indian Non-Resident (NRI) customers.
Management now aims to further strengthen its international operations, especially in the areas of trade finance and remittances. This unique advantage gives it a clear advantage over other domestic PSU banks that do not have such a large global reach.
Asset Quality and Credit Growth
BOB has consistently improved its asset quality. Its gross NPA has now fallen to 3.07%, while net NPA is just 0.75%. This indicates that the bank has effectively managed its bad loans and built a strong balance sheet for the future.
The bank has also performed well on the credit growth front. Over 25% growth in retail loans and 18% growth in the SME segment reflect a healthy expansion of its loan book. Management has maintained its loan growth guidance for FY2026 at 14-16%, indicating a strong outlook for the future.
Is it the next best to SBI
Bank of Baroda is certainly the frontrunner in the race to become India’s best and most efficiently run public sector bank after SBI. Its strong NIMs, diversified income sources (especially from international business), and steadily improving asset quality make it an attractive option for investors.
However, it still faces some challenges to achieve the “Best” crown, such as further improving digital engagement and accelerating customer acquisition at scale. However, given its current performance and future strategy, BOB certainly deserves a “Hold” or “Accumulate” rating, especially for investors seeking diversification into the public sector banking sector.