Indian Bank vs Bank of Baroda (2026): ROA, NIM, Scale, Valuation & Which Is Better?

Indian Bank vs Bank of Baroda: Q1 FY2027 scoreboard

Bank of Baroda itself disclosed the normalized comparison

Excluding the exceptional item, the bank disclosed:

• Adjusted PAT: ₹5,528 crore.
• Adjusted ROA: 1.10%.
• Adjusted ROE: 16.57%.

Those are the relevant figures for comparing recurring profitability with Indian Bank.

But there is an equally important caveat:

the ₹5,680 crore settlement was a real economic cost.

Normalising the quarter helps compare future earning power. It does not mean shareholders should pretend the settlement never happened.

This distinction matters especially for valuation

Trailing P/E ratios mechanically react to reported earnings.

A one-off charge can temporarily make a fundamentally profitable bank look much more expensive—or distort comparisons depending on the data window used.

For Bank of Baroda in Q1 FY2027, price-to-book and normalized ROA/ROE provide cleaner comparative signals than relying on a single reported quarterly profit number.

The liability franchise helps explain the margin gap

Indian Bank domestic CASA is approximately 39.73%.

Bank of Baroda is at 37.72%.

The difference is not enormous, but Indian Bank also reported a global cost of deposits around 4.80% in Q1.

Bank of Baroda's global cost of deposits was approximately 4.66%—actually slightly lower.

This is an important nuance.

Indian Bank's wider NIM cannot be explained simply by cheaper deposits.

Indian Bank is monetising the asset side more effectively

If Bank of Baroda has a slightly lower global deposit cost yet produces a materially lower NIM, the difference must be found in broader asset-liability economics:

• loan yields.
• business mix.
• domestic versus international assets.
• investment portfolio.
• pricing discipline.

This makes Indian Bank's NIM advantage a stronger operating-quality signal than a simple CASA comparison would suggest.

ROA converts that spread advantage into a shareholder-relevant outcome

Indian Bank:

1.31%.

Bank of Baroda adjusted:

1.10%.

The 21-basis-point difference is meaningful.

Indian Bank currently earns roughly 19% more profit from each rupee of assets on a relative basis.

And Indian Bank achieves the higher ROA on a smaller balance sheet

This is the core of the "profit density" argument.

Bank of Baroda has approximately twice the banking assets and almost twice the deposits.

Indian Bank uses a much smaller base to generate a relatively high return.

The market therefore assigns significantly more value to each rupee of Indian Bank's book equity.

ROE tells the same story

Indian Bank:

19.48%.

Bank of Baroda adjusted:

16.57%.

Both are healthy.

Indian Bank currently compounds common shareholder equity more quickly.

This is one of the strongest fundamental justifications for its 1.5x-plus book valuation.

Operating efficiency reinforces Indian Bank's quality premium

Cost-to-income:

Indian Bank 44.80%.

Bank of Baroda 49.19%.

A difference of more than four percentage points is meaningful.

Indian Bank keeps more of each rupee of operating income before provisions and taxes.

Bank of Baroda's Q1 cost structure was not deteriorating dramatically

Operating expenses were almost flat year on year.

The weak operating-profit growth was instead influenced heavily by non-interest income.

Bank of Baroda's non-interest income fell approximately 25.8%, including much lower treasury income and fee income.

This matters because it prevents an overly simplistic conclusion that the bank suddenly became inefficient.

But Indian Bank's recurring operating bridge was cleaner

Indian Bank NII:

+16.92%.

Operating profit:

+16.50%.

The two rates move almost together.

That is what investors want to see from an efficient bank: core revenue growth flowing through to pre-provision operating profit with limited leakage.

The growth is broad

Bank of Baroda reported:

• Retail organic advances +18.4%.
• Agriculture +18.7%.
• MSME +20.3%.
• Corporate +15.3%.
• International advances +23.3%.

This is not a one-product surge.

The bank is expanding across most major lending engines.

Retail subsegments add another layer of momentum

Home loans increased around 14.7%.

Auto loans increased 25.3%.

Mortgage loans increased 27.4%.

Gold loans expanded much faster from a smaller base.

The bank therefore has exposure to multiple household-credit categories while maintaining a large corporate franchise.

Indian Bank is growing more moderately—but not slowly

Advances increased 13.89%.

Retail increased approximately 18.74%.

MSME grew around 17.03%.

Agriculture increased approximately 9.96%.

Corporate credit grew around low double digits.

Indian Bank is therefore choosing a somewhat slower balance-sheet expansion profile while preserving superior current returns.

The distinction resembles growth quantity versus return quality

Bank of Baroda:

more incremental assets.

Indian Bank:

higher return from existing assets.

There is no universal winner between those models.

The answer depends on whether Bank of Baroda can improve ROA as it scales, and whether Indian Bank can preserve its high returns without needing materially faster growth.

Asset quality gives Indian Bank another edge

GNPA:

Indian Bank 1.86%.

Bank of Baroda 1.99%.

The gross difference is modest.

Net NPA is not.

Indian Bank is at only 0.15%.

Bank of Baroda is at 0.50%.

0.15% NNPA is an unusually clean residual-risk position

Indian Bank has already absorbed almost all recognised bad-loan exposure through provisions and write-offs.

That does not eliminate future slippage risk.

It does reduce the burden from historical recognised stress.

For a bank valued above book, that clean residual balance sheet is important.

Bank of Baroda's asset quality is still strong in absolute terms

GNPA below 2% and NNPA at 0.50% would have looked exceptionally strong relative to the PSU-bank system several years ago.

This is no longer a distressed balance sheet.

The difference is that Indian Bank has moved even further into a high-provisioning, low-net-NPA position.

Capital also favours Indian Bank slightly

Indian Bank total capital adequacy:

17.58%.

Bank of Baroda:

16.30%.

Both have reasonable regulatory buffers.

Indian Bank currently has more room relative to minimum requirements while still generating higher ROE.

That is an attractive combination

High capital sometimes suppresses ROE because more shareholder equity supports the same asset base.

Indian Bank nevertheless produces close to 20% ROE.

This strengthens the argument that its profitability comes from genuine business economics rather than unusually high leverage.

The P/B gap is much larger than the ROE gap

Indian Bank adjusted/current ROE:

19.48%.

Bank of Baroda normalized ROE:

16.57%.

Indian Bank earns roughly 18% more ROE on a relative basis.

Its P/B multiple is more than twice as high.

This does not prove Bank of Baroda is undervalued.

It shows the market applies a very large durability premium to Indian Bank's returns.

Why might Bank of Baroda remain below book despite normalized 16.6% ROE?

Possible explanations include:

• The NMC settlement reminds investors that legacy international exposures can still create large economic costs.
• Global NIM remains below 3%.
• CASA has declined year on year.
• Non-interest income can be volatile.
• Reported Q1 earnings are distorted by the exceptional item.

The market is pricing uncertainty around the quality and durability of normalized earnings.

Why can Indian Bank command 1.5x-plus book?

Because its Q1 profile contains very few obvious weak spots:

• 3.29% global NIM.
• 1.31% ROA.
• 19.48% ROE.
• 44.8% cost-to-income.
• 0.15% NNPA.
• double-digit deposit and credit growth.

That is the operating profile the market normally rewards.

But the higher-quality stock has a different kind of risk

Indian Bank does not need an earnings collapse to underperform.

If ROA merely normalises from 1.31% toward 1.1%, or ROE falls from nearly 20% toward the mid-teens, investors may decide 1.54x book is too high.

Operational risk is lower. Valuation sensitivity is higher.

Bank of Baroda has more room for multiple expansion

A bank at 0.74x book can generate shareholder returns from two separate engines:

book value itself grows

and

the market pays a larger multiple for that book.

If normalized ROA stays above 1%, ROE remains mid-teens and the NMC settlement proves genuinely non-recurring, the valuation can theoretically move closer to book without requiring Indian Bank-level profitability.

Bank of Baroda does not need to reach 1.31% ROA for the rerating thesis to work

A more realistic milestone would be:

• ROA consistently above 1.1%.
• ROE in the 16%-17% range.
• NIM stabilising near or above 2.8% globally.
• GNPA remaining below 2%.
• CASA stabilising.
• mid-teens credit growth without higher credit cost.

That would make a permanent sub-book valuation increasingly difficult to justify.

Indian Bank's route is simpler

It needs to keep doing roughly what it is already doing.

The investment case does not require:

• a turnaround.
• a major cost restructuring.
• a large NPA cleanup.
• a dramatic liability transformation.

It requires durability.

The Bull Run market snapshot shows investors already distinguish the two stories

The one-year return gap is enormous

Indian Bank gained more than 31% in Bull Run's dated snapshot.

Bank of Baroda was roughly flat.

This is a clear indication that the market has already rewarded Indian Bank's superior operating metrics.

It also means Bank of Baroda's cheaper valuation comes with far weaker recent investor confidence.

Indian Bank was also near a technically stretched zone

Its RSI was approximately 70.45 on August 25.

Bank of Baroda was around 46.70.

Technical indicators should not determine fundamental value.

They do show that Indian Bank entered late August with much stronger short-term momentum and correspondingly higher market expectations.

Indian Bank vs Bank of Baroda FAQs

Which bank is larger?

Bank of Baroda by almost two times on deposits and advances.

Which bank is growing loans faster?

Bank of Baroda, with global advances growth of approximately 17.4% versus Indian Bank at 13.89%.

Which bank has higher NIM?

Indian Bank, at approximately 3.29% globally versus Bank of Baroda at 2.77%.

Which bank has higher ROA?

Indian Bank at 1.31%. Bank of Baroda's reported 0.25% was distorted by the NMC exceptional charge; its disclosed adjusted ROA was 1.10%.

Which bank has higher ROE?

Indian Bank at 19.48% versus Bank of Baroda's adjusted 16.57%.

Which bank has better CASA?

Indian Bank, with domestic CASA around 39.73% versus Bank of Baroda at 37.72%.

Which has better asset quality?

Indian Bank currently has lower GNPA and much lower NNPA.

Was Bank of Baroda's ₹5,680 crore exceptional charge a real cost?

Yes. Excluding it is useful for comparing recurring earning power, but it was still a real economic settlement recorded by the bank.

Which stock is cheaper?

Bank of Baroda is substantially cheaper on price-to-book in late August 2026.

Where can investors compare them on Bull Run?

Use the Indian Bank stock page, Bank of Baroda stock page and Public Sector Bank sector page.

Research sources

• Bull Run — Indian Bank
• Bull Run — Bank of Baroda
• Bull Run — Public Sector Bank sector research
• Indian Bank official Q1 FY2027 financial results
• Indian Bank official investor presentations
• Bank of Baroda official Q1 FY2027 financial results
• Bank of Baroda official analyst presentations
• Indian Bank late-August valuation data
• Bank of Baroda late-August valuation data