Bank of Baroda vs PNB (2026): NIM, ROA, NPAs, Growth & Which Is Better?
Two banks. Roughly ₹1.2-1.3 lakh crore of market value each. Two misleading profit headlines.
Bank of Baroda and Punjab National Bank currently sit surprisingly close in market value, but anyone comparing their Q1 FY2027 reported profits without adjustments will reach the wrong conclusion.
Bank of Baroda reported only ₹1,278 crore of standalone profit.
PNB reported ₹5,253 crore.
That makes PNB appear to have earned more than four times as much.
But Bank of Baroda absorbed approximately ₹5,680 crore for settlement of legacy NMC Group litigation.
Management says profit excluding the exceptional item would have been approximately ₹5,528 crore.
PNB has the reverse distortion.
Its 213.6% year-on-year PAT growth partly reflects an unusually weak tax-affected comparison quarter.
Once those distortions are removed, these are not a ₹1,278 crore bank and a ₹5,253 crore bank.
They are two similarly valued PSU banks producing remarkably similar normalised quarterly profit—but through different operating engines.
Before comparing the stocks, answer three accounting questions
The third answer is the most useful starting point for comparing recurring earnings momentum.
Bank of Baroda vs PNB: Q1 FY2027 operating scorecard
| Metric | Bank of Baroda | Punjab National Bank | Current Edge |
|---|---|---|---|
| Reported standalone PAT | ₹1,278 Cr | ₹5,253 Cr | Not directly comparable |
| Normalised earnings context | ₹5,528 Cr excluding NMC settlement | Reported PAT inflated by low tax-affected prior-year base | Both require adjustment |
| NII | ₹12,524 Cr | ₹10,798 Cr | BoB |
| NII growth | +9.5% | +2.1% | BoB |
| Global deposits | ₹16.34 lakh Cr | ₹17.25 lakh Cr | PNB scale |
| Deposit growth | +13.8% | +8.5% | BoB |
| Global advances | ₹14.17 lakh Cr | ₹12.73 lakh Cr | BoB |
| Advance growth | +17.4% | +12.7% | BoB |
| Domestic CASA ratio | 37.72% | 36.7% | BoB slightly |
| Global NIM | 2.77% | 2.50% | BoB |
| Domestic NIM | 2.93% | 2.64% | BoB |
| ROA | 0.25% reported / 1.10% adjusted | 1.04% | BoB adjusted slightly |
| ROE | 3.89% reported / 16.57% adjusted | 17.33% | PNB slightly |
| GNPA | 1.99% | 2.78% | BoB |
| NNPA | 0.50% | ~0.28% | PNB |
| Provision coverage | 93.28% | ~97% incl. technical write-offs | PNB |
| Slippage ratio | 0.91% | 0.68% | PNB |
| Credit cost | 0.29% | ~0.25% | Very close |
| Capital adequacy | 16.30% | 18.13% | PNB |
| CET1 | 13.90% | 13.98% | Essentially tied |
| Credit-deposit ratio | 83.31% domestic | ~73.8% global | PNB funding headroom |
| Late-August P/E | ~6x on market-source basis | ~6-7x | Similar low valuation |
| Late-August P/B | ~0.8x | ~0.9-1.0x | BoB lower on cited market basis |
Bank of Baroda currently has the faster banking engine
The most important advantage is not adjusted PAT. It is growth in the balance sheet and NII.
Global advances grew 17.4%.
PNB advances grew 12.7%.
BoB deposits grew 13.8%.
PNB deposits grew 8.5%.
BoB NII grew 9.5%.
PNB NII grew only 2.1%.
Across all three measures, Bank of Baroda currently has stronger operating momentum.
BoB's loan growth is also broad rather than dependent on one segment
Retail, agriculture, MSME and corporate credit are all expanding.
- Organic retail advances: +18.4%.
- Agriculture: +18.7%.
- Organic MSME: +20.3%.
- Corporate loans: +15.3%.
- Auto loans: +25.3%.
- Mortgages: +27.4%.
This lowers dependence on a single loan category.
It also means future asset quality must be monitored across multiple borrower pools rather than one concentrated risk pocket.
PNB's credit growth is slower, but its mix is becoming more granular
The 12.7% headline does not mean nothing is changing underneath.
PNB has been pushing harder into:
- Retail.
- Vehicles.
- MSME.
- Agriculture.
- Small-ticket business banking.
That is strategically important because a granular loan book can reduce corporate concentration and improve fee opportunities.
Why does Bank of Baroda generate stronger NII growth?
It combines faster loan growth with a wider current margin.
Global NIM is 2.77%.
PNB is 2.50%.
Domestic NIM is 2.93% for BoB versus 2.64% for PNB.
A 25-30 basis point spread difference across trillion-rupee balance sheets produces material earnings divergence.
PNB's margin is improving sequentially but remains below its earlier level
Global NIM moved from roughly 2.47% in Q4 FY2026 to 2.50% in Q1 FY2027.
Domestic NIM moved from around 2.61% to 2.64%.
Sequential improvement matters.
Year on year, margins remain lower.
PNB's rerating needs that sequential recovery to continue.
Deposit repricing is one of PNB's easiest earnings levers
Cost of deposits declined to approximately 4.36% from 4.70% a year earlier.
That is encouraging.
As older high-cost deposits mature and are replaced at lower rates, NIM can improve even if lending yields do not increase.
This type of margin expansion carries less credit risk than chasing higher-yield borrowers.
Bank of Baroda's deposit cost is also declining
Cost of deposits was around 4.66%, down sequentially.
BoB therefore has the same repricing catalyst.
Its starting NIM is already higher.
This gives the bank more room to preserve profitability if loan yields remain under pressure.
PNB wins one important funding comparison: it has far more unused deposit capacity
Its global credit-deposit ratio is only around 73.8%.
Bank of Baroda's domestic ratio is approximately 83.31%.
The definitions differ, so these numbers should not be treated as perfectly comparable.
The economic message is still useful.
PNB has more deposits sitting outside the loan book.
That can become a future growth asset
A large deposit pool is valuable if management can deploy it into loans earning acceptable risk-adjusted spreads.
PNB therefore does not face the same immediate funding constraint as some faster-growing banks.
The real challenge is:
Can it deploy more without recreating the credit mistakes that produced the historical NPA cycle?
PNB's current balance sheet gives a much better starting point than history suggests
GNPA has fallen by roughly one percentage point in only a year.
It moved from 3.78% to 2.78%.
NNPA is around 0.28%.
Provision coverage is close to 97% including technical write-offs.
That is a heavily provisioned legacy stressed book.
Why does PNB have worse GNPA but better NNPA than BoB?
Because more of PNB's bad-loan stock has already been covered through provisions.
BoB:
- GNPA: 1.99%.
- NNPA: 0.50%.
- PCR: 93.28%.
PNB:
- GNPA: 2.78%.
- NNPA: ~0.28%.
- PCR: ~97% including technical write-offs.
BoB has fewer gross problem loans.
PNB has less residual unprovided exposure after recognising losses.
For future earnings, fresh slippages matter more than old GNPA
PNB's slippage ratio is around 0.68%.
BoB's is around 0.91%.
This gives PNB the current edge on new stress formation.
If PNB can maintain sub-1% slippages while expanding credit, its gross NPA ratio can continue falling quickly.
BoB's early-warning indicators are also exceptionally clean
Its CRILC SMA-1 and SMA-2 exposure as a percentage of standard advances has fallen sharply.
That reduces concern that a large wave of stress is sitting immediately behind the reported NPA ratio.
Credit cost of only 0.29% supports the same conclusion.
Credit cost is effectively no longer the differentiator
BoB is around 0.29% and PNB around 0.25%.
Both are exceptionally low compared with the historical PSU-bank cycle.
Future earnings therefore depend more on:
- Credit growth.
- NIM.
- Operating expenses.
- Fee income.
rather than large NPA provisions.
The NMC settlement should be charged once—not ignored and not annualised
₹5,680 crore is a real economic cost.
It reduced shareholder value.
Cash was paid.
The litigation arose from legacy international banking exposure.
Calling it "one-off" does not mean pretending the money never existed.
But using ₹1,278 crore as BoB's future quarterly profit is equally wrong
The settlement is not a recurring operating expense expected every quarter.
For forecasting future banking earnings:
reported PAT should be adjusted.
For measuring historical shareholder cost:
the settlement should remain fully acknowledged.
Both statements can be true simultaneously.
PNB's 214% PAT growth needs exactly the opposite adjustment
The current profit is real.
The growth rate is exaggerated by a weak prior-year tax base.
PNB's operating profit grew approximately 6.2%.
NII grew 2.1%.
Those numbers are much closer to the recurring earnings trend.
This creates a useful earnings-quality ranking
BoB's reported PAT understates the recurring quarter.
PNB's reported PAT growth overstates the recurring growth rate.
After normalisation, Bank of Baroda looks materially stronger than the headline comparison suggests.
ROA shows how close the two banks really are
BoB adjusted ROA: approximately 1.10%.
PNB ROA: approximately 1.04%.
Six basis points is not a giant gap.
This is one reason their market values have converged.
ROE gives PNB a narrow current advantage
PNB reported approximately 17.33% ROE.
Bank of Baroda's adjusted ROE is approximately 16.57%.
The difference is small.
PNB also carries a higher total capital ratio.
That combination is economically respectable.
Capital strength currently favours PNB
PNB CRAR is around 18.13% versus BoB at 16.30%.
CET1 is nearly identical around 14%.
The difference in total capital therefore comes mainly from additional Tier-1 and Tier-2 instruments rather than a radically larger common-equity cushion.
The market values these banks almost identically
Bull Run's current PSU-bank peer data places BoB around ₹1.28 lakh crore of market value and PNB around ₹1.22 lakh crore.
That is remarkable because:
BoB has the larger loan book.
PNB has the larger deposit book.
BoB has better gross NPAs.
PNB has better net NPAs.
BoB grows faster.
PNB has more unused funding capacity.
BoB trades below book despite mid-teens adjusted ROE
Late-August market sources place the stock around 0.8x book.
That is a low multiple for a bank capable of generating adjusted ROE around 16% if the current earnings quality proves sustainable.
The market discount likely reflects:
- PSU ownership.
- Legacy international litigation.
- Lower historical consistency than private peers.
- Concern that current credit cost represents a cyclical low.
PNB also trades near or below book for similar but not identical reasons
Its historical NPA cycle was more severe.
Investors therefore require more evidence that today's clean net NPA and 17% ROE can persist through a full cycle.
The market also sees only 2% NII growth in the latest quarter.
A bank cannot rerate permanently through provisioning improvement alone.
The next stage of PNB's rerating must come from revenue
Most of the obvious NPA repair has already happened.
Future rerating now needs:
- Faster NII growth.
- Higher NIM.
- Greater use of the deposit base.
- Stable credit cost.
- Better fee income.
BoB's rerating needs less repair and more consistency
The core operating numbers already look reasonably strong.
Investors need confidence that:
- 17% loan growth is sustainable.
- Domestic CASA remains around high-30s.
- NIM stabilises near 3% domestically.
- No further legacy international surprises emerge.
- ROA remains above 1% after the settlement quarter.
Which bank has the better deposit franchise?
PNB has more deposits. Bank of Baroda currently monetises deposits better.
PNB's global deposits exceed ₹17.2 lakh crore.
BoB is around ₹16.3 lakh crore.
But BoB has:
- Higher CASA ratio.
- Higher NIM.
- Faster deposit growth.
- Faster credit deployment.
Which bank has the safer balance sheet?
The answer depends on the definition of safety.
BoB: lower gross NPA.
PNB: lower net NPA and higher provision coverage.
PNB: more total capital.
PNB: lower credit-deposit ratio.
BoB: slightly wider earnings spread.
There is no single safety metric that settles the comparison.
Which bank has more earnings momentum?
Bank of Baroda clearly.
That conclusion comes from recurring metrics rather than reported PAT:
- NII +9.5% vs +2.1%.
- Advances +17.4% vs +12.7%.
- Deposits +13.8% vs +8.5%.
- Higher NIM.
Which bank has more unused balance-sheet optionality?
PNB.
Its low credit-deposit ratio means the bank has room to accelerate credit without immediately matching every incremental loan with a new deposit.
The challenge is maintaining underwriting quality when deployment accelerates.
What can break the Bank of Baroda thesis?
BoB risks
- Legacy overseas issues create another exceptional charge.
- 17% credit growth causes future slippages.
- NIM compresses materially.
- Domestic CASA trends lower.
- Current 0.29% credit cost proves unsustainably low.
BoB confirmation signals
- ROA returns above 1% after the settlement quarter.
- NII remains high-single-digit or better.
- GNPA falls below 2% sustainably.
- Retail/MSME growth stays disciplined.
- No new material legacy litigation surprises.
What can break the PNB thesis?
PNB risks
- Investors extrapolate 214% PAT growth that cannot recur.
- NII remains near low-single-digit growth.
- NIM recovery stalls.
- Credit deployment creates new MSME/agriculture stress.
- Low P/B proves justified by structurally weaker returns.
PNB confirmation signals
- NIM moves toward 2.7%.
- Loan growth accelerates into mid-teens.
- ROA stays above 1%.
- GNPA falls toward 2%.
- ROE remains comfortably above the cost of equity.
Bank of Baroda vs PNB: current conclusion
Bank of Baroda currently has the stronger operating franchise.
Its loans grow faster.
Deposits grow faster.
NII grows faster.
NIM is higher.
Gross NPA is lower.
PNB currently has the stronger provisioning-and-headroom profile.
Net NPA is lower.
Provision coverage is higher.
Total capital is higher.
The credit-deposit ratio leaves more room for future deployment.
Bank of Baroda vs PNB FAQs
Which bank is larger?
PNB has the larger deposit base, while Bank of Baroda has the larger advance book.
Which is growing loans faster?
Bank of Baroda at approximately 17.4%, versus PNB around 12.7%.
Which is growing deposits faster?
Bank of Baroda at approximately 13.8%, versus PNB at 8.5%.
Which has higher NIM?
Bank of Baroda, both on global and domestic measures.
Which has better asset quality?
BoB has lower GNPA; PNB has lower NNPA and higher provision coverage.
Which has higher ROA?
After adjusting BoB for the NMC settlement, BoB is around 1.10% versus PNB around 1.04%.
Which has higher ROE?
PNB reported about 17.33%; Bank of Baroda's adjusted figure is approximately 16.57%.
Why was Bank of Baroda PAT so low?
The quarter included a roughly ₹5,680 crore exceptional charge relating to settlement of legacy NMC Group litigation.
Why did PNB PAT grow more than 200%?
The prior-year comparison contained a large one-time tax charge, making the percentage growth much larger than the growth in recurring banking income.
Where can investors compare them on Bull Run?
Use the Bank of Baroda stock page, PNB stock page and Public Sector Bank sector page.
Research sources
Disclaimer
This article is educational and informational only. Bank of Baroda's Q1 FY2027 reported PAT, ROA and ROE were materially affected by the exceptional NMC Group settlement; adjusted numbers use management's disclosed figures and do not erase the real shareholder cost of the settlement. PNB's year-on-year PAT growth was materially affected by the unusually high tax charge in the prior-year base. Some deposit, NIM and credit-deposit metrics are disclosed on domestic versus global bases and are labelled accordingly. Current credit costs across both banks are unusually low by historical PSU-bank standards and should not be assumed permanent. Market valuation figures are point-in-time late-August 2026 observations. Nothing here recommends buying, selling or holding Bank of Baroda, PNB or any security. Bull Run is not a SEBI-registered Research Analyst or Investment Adviser.