Bank of Baroda Kenya lifts nine-month profit 8.3% to KSh4.39bn as bad loans ease

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Bank of Baroda (Kenya) made a profit after tax of KSh4.39bn in the nine months to September 30, 2026, up 8.3% from KSh4.05bn a year earlier, as cheaper deposits lifted its lending margins and its stock of bad loans shrank.

Profit before tax and exceptional items grew faster, rising 20.4% to KSh6.97bn, which the lender said reflects better underlying operating performance. The bank, which has operated in Kenya since 1953, released the figures on Thursday.

Lower deposit costs drive the gain

Total operating income rose 23.5%, helped by a 24.9% jump in net interest income. The third quarter alone produced net interest income of KSh3.34bn, the bank’s best quarter of the year.

The main driver was the cost of money. Interest expense fell 29.1% as rates paid on customer deposits came down with the wider easing in Kenyan interest rates. Interest income also slipped, by 5.7%, in line with lower market rates, but the drop in costs was far larger, widening the gap the bank earns between what it pays savers and what it charges borrowers.

That pattern matches what other Kenyan lenders have reported this year as rates have eased. Our earlier look at bank earnings and the sector’s top stock picks showed the same shift in margins across the larger banks.

Lending, trade finance and bad loans

Gross loans to customers grew 5.1% year on year. Non-funded business, mainly trade finance such as letters of credit and guarantees, grew much faster, up 59.6%, as more import and export deals passed through the bank.

Asset quality improved during the quarter. The gross non-performing loan ratio fell to 12.26% from 12.91% at the end of June 2026. Net non-performing loans dropped 13.9% year on year and 17% quarter on quarter to KSh3.75bn, while the provision coverage ratio rose to 60.05% from 50.90% a year earlier, meaning the bank has set aside more against loans that may not be repaid.

Capital and liquidity well above the minimum

Core capital rose 6.4% to KSh35.35bn and total capital 6.3% to KSh35.43bn. Its core capital to risk-weighted assets ratio stood at 33%, against the Central Bank of Kenya’s minimum of 10.5%, and the total capital ratio was 33.08%, against a 14.5% minimum.

The liquidity ratio closed the period at 80.41%, four times the 20% statutory floor. Net worth grew 5.5% to KSh39.28bn, even after the bank paid out KSh4.45bn in dividends declared for 2025.

What the bank says comes next

Managing director Astitva Bhardwaj said the results reflect “the strength of our banking franchise in Kenya and the trust our customers continue to place in us,” adding that the bank is “progressively strengthening service delivery across our branches, including through digital channels.”

The lender said it is pushing customers towards digital and self-service banking, including adding more cash recyclers, machines that both take deposits and pay out cash, across its branches.

For customers, the high capital and liquidity buffers mean the bank is well placed to keep lending as rates fall. Borrowers comparing offers can check our guide on how to get a mortgage in Kenya, and those who deposit through M-Pesa can find every lender’s number in our list of bank paybill numbers in Kenya.