In this study, a novel processing technique for microstructural refinement of Ni-Cr-5Al2O3 composite coating developed using high velocity oxy-fuel (HVOF) technique is demonstrated. The processing technique, known as stationary friction processing (SFP) is an adaptation of the well-known friction stir processing (FSP). The as-sprayed coating showed a typical lamellar microstructure along with non-homogeneous elemental distribution. The SFP treatment resulted in significant microstructural refinement with complete elimination of splat boundaries and pores together with fully homogeneous elemental distribution. The performance of as-sprayed and processed coatings was evaluated in slurry erosion, erosion-corrosion and pure corrosion in 3.5\% NaCl solution. At oblique impingement angle, the SFP treated sample showed minimum erosion rate of nearly 0.1 mm3/h which is 3–5 times lower than the as-sprayed coating and the substrate. For normal impingement, the erosion rate of SFP specimen was nearly 30\% lower compared to the as-sprayed coating and the substrate. This is attributed to higher hardness as well as fracture toughness of the SFP treated coating as a result of microstructural refinement. In addition, the SFP treated coating was able to demonstrate superior resistance under erosion-corrosion conditions as well. Further, the processed sample showed lowest corrosion rate of 0.079 μA/cm2, 5–6 times lower than the as-sprayed coating (0.39 μA/cm2). The enhancement in the corrosion resistance of the coating after processing is attributed to complete homogenization of the coating with removal of all splats, splat boundaries, pores and regions of elemental segregation. © 2020 Elsevier B.V.