Bank of Baroda (BoB) has announced a reduction in its home loan interest rates from 8.40% to 8.00% per annum, effective May 6, 2025. This change applies to new home loans and home improvement loans of ₹15 lakh and above, with rates linked to the borrower’s credit score.
The bank's executive director, Sanjay Mudaliar, emphasized the importance of this move, stating, "Bank of Baroda’s new reduced home loan rates will further make home ownership more affordable. We are also offering special concessions for specific important segments." The revised rates include a concession of 0.05% for women borrowers and 0.10% for borrowers under 40 years of age.
BoB's new rates are applicable for fully completed properties, balance transfers, and government projects, adhering to minimum rate guidelines. The bank has also enhanced its digital application process to expedite loan approvals, allowing existing borrowers from other banks and non-bank lenders to transfer their loans with minimal documentation.
This strategic move comes as public and private lenders are vying for a larger share of the home loan market. Data from Policybazaar reveals competitive rates among major lenders, with Union Bank of India starting at 7.85%, State Bank of India at 8%, and HDFC Bank beginning at 8.50%.
In related news, Indian benchmark indices started the week on a positive note, with the BSE Sensex increasing by 294.85 points (0.37%) to close at 80,796.84, and the NSE Nifty50 gaining 114.45 points (0.47%) to finish at 24,461.15 on May 5, 2025. This uptick was supported by sustained foreign institutional investor (FII) inflows and a record GST collection in April.
Despite the positive overall market sentiment, Bank of Baroda's stock faced challenges following its quarterly results. On the same day, the bank reported a net profit of ₹5,048 crore for Q4 FY25, marking a 3% increase year-on-year. However, its net interest income (NII) fell by 7% to ₹11,020 crore, leading to a significant drop in its share price, which fell over 7% on May 6, 2025.
On the stock market front, Bank of Baroda's shares ended trading at ₹223.65 on the BSE, down 10.27%, and at ₹221.95 on the NSE, marking a decline of 10.91%. This decline followed the bank's announcement of its Q4 results, which showed a decrease in net interest margin (NIM) to 2.86%, down from 2.94% in the preceding quarter and significantly lower than the 3.27% recorded in Q4 FY24.
The bank also announced a dividend of ₹8.35 per share, with a record date set for June 6, 2025. This dividend announcement is part of the bank's effort to provide returns to its shareholders despite the fluctuating stock performance.
In terms of asset quality, Bank of Baroda reported improvements, with both net non-performing assets (NPA) and gross NPA ratios showing a decline in Q4. The bank's total provisions rose by 19% year-on-year to ₹1,552 crore, indicating a proactive approach to managing potential loan defaults.
As the market continues to react to these developments, traders are advised to approach Bank of Baroda shares with caution. Jigar S Patel, a technical research analyst at Anand Rathi Shares and Stock Brokers, has recommended booking profits in the stock in the ₹250-260 range, citing bearish divergence signals following a 36% rally over the past two months. Patel noted that this price zone coincides with Fibonacci resistance levels, suggesting a potential pullback before considering new entries.
Meanwhile, other notable stocks in the market include Paytm and Housing and Urban Development Corporation (Hudco), which are also drawing attention from traders. Paytm is expected to test a resistance zone of ₹915-920, while Hudco is being recommended for purchase above ₹228, targeting ₹246 with a stop-loss below ₹218.
Overall, the financial landscape is marked by competitive interest rates for home loans, strategic adjustments by banks like Bank of Baroda, and a dynamic stock market reacting to quarterly results and broader economic indicators. As the week progresses, investors will be closely monitoring these developments to make informed decisions.
