Bank of India’s net profit for the December quarter rose nearly 8% on year to Rs 2,705 crore, mainly backed by higher income and improvement in asset quality. On a sequential basis the bottom line increased by 6%.
Operating profit of the bank was up 13% on year to Rs 4,193 crore in the reporting quarter. Net interest income (NII) rose 6.4% on year to Rs 6,461 crore and other income jumped sharply by around 31% on year. The net interest margins (NIMs) expanded to 2.57% from 2.41% a quarter ago. The bank said that by the end of the financial year, they expect NIM at 2.60%.
In terms of business growth, the bank’s global advances grew 13.63% on year while the global deposits rose 11.64%. Rajneesh Karnatak, managing director and CEO of the bank said that they are “pursuing a calibrated approach towards credit growth.”
The bank has revised its global loan growth guidance upwards to 13-14% from 12-13% earlier and the deposit growth guidance to 11-12% from 10-11%.
Robust Disbursement Pipeline
Karnatak said that the bank has a robust pipeline of Rs 80,000 crores which would be disbursed within Q4 and the first half of the next financial year. Out of this total amount, around Rs 60,000-65,000 crore is towards the corporate segment and the remaining 15,000 crore is to the retail, agriculture and MSME (RAM) segment.
However, he added that the growth in RAM book would be faster as compared to the corporate book.
In the reporting quarter, RAM advances rose 18.05% on year while corporate book was up 11% on year. “According to our plan for 2031, we aspire to have the retail to corporate mix at 65:35,” Karnatak said. Currently, RAM forms 58.54% of total advances as on December 31.
Within total deposits, the share of current account and savings account (CASA) deposits to total deposits declined to 37.97% from 41.05% a year ago. “In order to optimize the CD ratio, (loan to deposit ratio) and also maintain the LCR as per the RBI guidelines, our strategy will be to grow more on the deposit side,” Karnatak said.
The provisions and contingencies of the bank stood at Rs 576 crore in the reporting quarter, up 89% on year. The provisions to non-performing assets too inched up to Rs 605 crore from Rs 472 crore as on September-end. Provision coverage ratio stood at 93.60% as on December end.
Improving Asset Quality
The asset quality of the bank improved on a sequential basis. The gross non-performing asset (NPA) ratio stood at 2.26% as on December 31 from 2.54% a quarter ago and the net NPA ratio declined to 0.60% from 0.65% a quarter ago. Credit cost declined on a year-on-year basis to 0.34% but was higher than 0.28% reported a quarter ago.
Fresh slippages during the quarter did see an uptick of Rs 203 crore to Rs 1,090 crore. “The rise in slippages is mainly due to one account in the road segment which amounted to Rs 108 crore,” Karnatak said.
On the impact of the expected credit loss (ECL) guidelines, the bank has estimated a 2% impact on its capital adequacy ratio. The Basel-III capital adequacy ratio stood at 17.09% as on December 31.
On branch expansion, the bank has board approval to open 200 branches in the next financial year. In FY26, out of the 200 branches, 140 branches have been opened. The remaining 60 branches will be opened in Q4FY26.” On Wednesday, shares of Bank of India closed 1.5% lower at Rs 157.45 on NSE.