Bank of India — Q3 FY26 earnings call

Call held 21 Jan 2026

Management summary

Bank of India reported a strong Q3 FY26 with a 7% YoY increase in Net Profit to Rs. 2,705 crore, driven by a 6% rise in Net Interest Income and a 30% surge in Non-Interest Income. Asset quality showed significant improvement, with Gross NPA falling by 143 bps YoY to 2.26% and PCR reaching 93.60%. While global business and advances grew robustly, the bank noted a slight increase in fresh slippages, primarily due to a single corporate account, and a decline in the CASA ratio.

Highlights

  • Net Profit increased by 7% YoY to Rs. 2,705 crore for Q3FY26.

  • Global NIM improved by 16 bps sequentially to 2.57% in Q3FY26.

  • Gross NPA ratio improved by 143 bps YoY to 2.26% for Q3FY26.

  • Provision Coverage Ratio (PCR) improved to 93.60% in Dec25.

  • Global business grew by 12.54% YoY to Rs. 16,27,602 crore in Dec’25.

Concerns

  • CASA ratio declined to near 38% from 41% 12 months ago.

  • Fresh slippages increased by Rs. 200 crores to Rs. 1,100 crores in Q3 FY26.

  • One corporate road account slipped into NPA, contributing to the increase in slippages.

Key financials

  1. Global Business ₹16.28L Cr +12.5%YoY
  2. Global Gross Advances ₹7.40L Cr +13.6%YoY
  3. Global Deposits ₹8.87L Cr +11.6%YoY
  4. Domestic Gross Advances ₹6.29L Cr +15.2%YoY
  5. RAM Advances ₹3.68L Cr +18.1%YoY
  6. Domestic Deposits ₹7.65L Cr +12.8%YoY
  7. CASA Ratio 38%
  8. Operating Profit ₹4,193 Cr +13%YoY
  9. Net Profit ₹2,705 Cr +7%YoY
  10. Net Interest Income (NII) ₹6,461 Cr +6%YoY
  11. Global NIM 2.6% +0.16%QoQ
  12. Non-Interest Income ₹2,279 Cr +30%YoY
  13. Slippage Ratio 0.16%
  14. Credit Cost 0.34%
  15. Gross NPA Ratio 2.3% -1.4%YoY
  16. Net NPA Ratio 0.6% -0.25%YoY
  17. Provision Coverage Ratio (PCR) 93.6%
  18. CRAR 17.1%

What they filed

Q1 FY27: revenue up 8.7%, net profit up 36.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue17,355 18,211 18,323 18,352 18,406 +6%18,927 +4%19,476 +6%19,949 +9%
Net profit2,374 2,517 2,626 2,252 2,555 +8%2,705 +7%3,016 +15%3,068 +36%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Profitability

  • NIM Profitability · annualized FY26 · High confidence around 2.50%
    for the annualized FY26 we hope that we should be maintaining a NIM of around 2.50 %

    — Shri Rajneesh Karnatak, MD & CEO

  • NIM Profitability · Q4 FY26 · High confidence around 2.60%
    for the Q4, we should be somewhere around 2.60%.

    — Shri Rajneesh Karnatak, MD & CEO

Asset Quality

  • Total Recovery Asset Quality · FY26 (twelve months) · High confidence Rs. 7,200-7,300 crore
    we should be ending at around somewhere around Rs. 7,200 crore Rs.7,300 crore of total recovery during the twelve months.

    — Shri Rajneesh Karnatak, MD & CEO

  • Written Off Account Recovery (Quarterly) Asset Quality · per quarter · High confidence Rs. 750 crore
    we are targeting that we should have a number of around Rs. 750 crore per quarter

    — Shri Rajneesh Karnatak, MD & CEO

  • Written Off Account Recovery (Annual) Asset Quality · next four quarters · High confidence Rs. 3,000 crore
    which would translate to a number of around Rs.3,000 crore in the next four quarters on the written off account recovery.

    — Shri Rajneesh Karnatak, MD & CEO

Branch Expansion

  • Total New Branches Branch Expansion · FY25-26-27 (three years) · High confidence 600
    So, 600 branches will be opened in the three years. FY 25-26-27.

    — Shri Rajneesh Karnatak, MD & CEO

  • New Branches Branch Expansion · FY27 · High confidence 200
    for the next year also, for FY27, the Board has given approval for 200 more branches.

    — Shri Rajneesh Karnatak, MD & CEO

  • New Branches Branch Expansion · Q4 FY26 · High confidence 50-55
    The next remaining 50-55 branches we will be opening in this quarter itself.

    — Shri Rajneesh Karnatak, MD & CEO

Credit Growth

  • SME Book for Shakti Scheme Credit Growth · Medium confidence Rs. 500-1,000 crore
    on SMEs especially on Sakti side, close to Rs.500 to Rs.1,000 crore kind of book we are looking for.

    — Shri Ashok Pathak, Chief General Manager

Market context

  • Global Advances Growth Credit Growth · FY26 · High confidence 13-14%
    guidance for global advances growth will be around 13-14%

    — Shri Rajneesh Karnatak, MD & CEO

  • Global Deposit Growth Deposit Growth · FY26 · High confidence 11-12%
    global deposit growth around will be around 11-12% for FY26.

    — Shri Rajneesh Karnatak, MD & CEO

  • International Book Share of Global Advances Loan Portfolio Mix · BOI at 125 (2031) · Medium confidence 15-16%
    our international book should be at around 15 to 16 % of the global book on the advances side.

    — Shri Rajneesh Karnatak, MD & CEO

What to watch in Q4 FY26

NIM for Q4 FY26

Q4 FY26
Current 2.57% (Q3 FY26)
Target ~2.60%

Why it matters

NIM is a key profitability driver for banks, and achieving the targeted sequential improvement is crucial for overall financial performance.

for the Q4, we should be somewhere around 2.60%.

Risks & concerns

  • Global uncertainty and geopolitical tensions

    medium

    Global GDP growth is expected to moderate to 2.60% in 2025, impacting the overall economic environment.

    Management acknowledged

  • CASA ratio decline and deposit pressure

    medium

    CASA percentage to total deposit came down to near 38% due to structural shifts where depositors are parking funds in alternative investment avenues.

    Management acknowledged

  • Yield on Advances compression due to Repo rate cuts

    medium

    Yield on Advances came down from Dec 2024 to Dec 2025 as 64% of the book is linked to EBLR advances, directly impacted by 125 bps repo rate cuts in 2025.

    Management acknowledged

  • Increase in fresh slippages

    medium

    Fresh slippages increased by Rs. 200 crores to Rs. 1,100 crores this quarter, primarily due to one corporate road account in a consortium.

    Management acknowledged, explained as one-off

  • Gold loan valuation risk

    low

    Rising gold prices and commodity prices may pose a risk to valuations, leading the bank to reduce loan-to-value to 75% and keep a 25% margin on fresh advances.

    Management acknowledged, proactive measures taken

Q&A highlights

8 direct
Growth guidance vs actual performance Direct
As far as the growth is concerned, if you see our numbers, we have been growing our global business at around 12 %. And if you see within that the credit growth has been at around 13 % plus on a YOY basis and deposit growth has been at around 11% on a YOY basis. If you see the domestic numbers, the credit growth has been as good as 15% plus on the domestic advances side.

Clarifies the bank's strong growth across various segments, exceeding general guidance, and highlights confidence in future growth pipelines.

Asked by Mr. Sushil Choksey

Churning of low-yielding advances and NIM improvement Direct
Yes, that is the basic idea. We have churned our portfolio. We have scanned our portfolio and what we saw was that among the low yielding advances they were external linked lending rates, typically Repo linked... So that kind of churning we have done in our portfolio that has helped us improve the margins. So overall, if you see the global NIM also for the Bank, it has improved from a number of 2.41 % in September’25 to a number of 2.57% as on December ‘25.

Explains the strategy behind NIM improvement, attributing it to a conscious shift away from low-yielding, repo-linked advances.

Asked by Mr. Sushil Choksey

Gold Loan portfolio and asset quality Direct
As far as the color on the gold loan is concerned, we have a book of around Rs. 47,000 crores in gold loan as on 31st December, 2025. So, if I give you the numbers, the NPA amount is around Rs. 70-75 crores only... So, what we have done is we have reduced the loan to value to 75% now. So, any fresh advances in the gold loan category, we are keeping a margin of 25% as against earlier of 10% or 15%.

Provides specific details on the gold loan book size, very low NPA, and proactive risk management measures taken by the bank in light of rising gold prices.

Asked by Mr. Sushil Choksey

Increase in SMA-2 accounts Direct
As regards the SMA-2 number is there as we have already presented that the majority of that in the SMA-2 categories are three State Government accounts which are there which are backed by the State Government guarantee also which have rolled over from SMA-1 or SMA 0 to the SMA 2 category, but nonetheless we are monitoring these advances and we are hoping that there will not be any delinquency in these accounts.

Addresses a potential red flag (doubling of SMA-2) by clarifying that it's largely due to specific, government-backed accounts and not a systemic deterioration across other segments.

Asked by Mr. Ashok Ajmera

Details on Shakti scheme and Gig worker's loan Direct
So, this gig worker is for retail side for individuals and small enterprises for SME side and typically rate of interest is between 9.5% - 10.5%... For Gig workers, we have recently launched the project for individual side it is only up to Rs.2 lacs and on SME side it is up to 5 lacs.

Provides granular details on new product offerings, including target segments, interest rates, and ticket sizes, indicating strategic focus on specific growth areas.

Asked by Mr. Rohit Shinde

Competitive environment, CASA, and Yield on Advances Direct
As far as the liability side is concerned, see there is a transformational shift, structural shift which is happening on the deposit side across the system... Our CASA percentage to total deposit has also come down to now near to 38%... As regards, the other part is concerned on the loan book side, there we have been able to improve our Yield on Advances though you rightly observed that the Yield on Advances have come down from December 2024 to December 2025. For the simple reason that if you see our book, 64 % of our book is linked to the EBLR advances, which are the Repo linked advances.

Explains the broader industry trends impacting CASA and yields, linking them to systemic shifts in depositor behavior and the impact of RBI's repo rate changes on EBLR-linked advances.

Asked by Mr. Sharad Chandra

Fresh slippages and recovery targets Direct
As far as the fresh slippages are concerned, see the fresh slippages have increased by nearly Rs. 200 crores in this quarter. So last quarter it was around Rs.910 crores, so this time it is around Rs.1,100 crores. One of the main reasons is that there was one corporate road account which slipped into NPA... As regards to recovery is concerned... we should be ending at around somewhere around Rs. 7,200 crore Rs.7,300 crore of total recovery during the twelve months.

Provides specific figures for fresh slippages and recovery targets, offering transparency on asset quality management and future expectations.

Asked by Mr. Ashok Ajmera

ECL framework impact on CRAR Direct
ECL is a work in progress frankly speaking because the draft guidelines of RBI are already out. We have done the calculation as far as the present numbers which are concerned, so we feel that the ECL impact should be at around 2 % on our CRAR. So, if you see our CRAR is around 17.09 % and1 % of this translates to around Rs. 4,600 to Rs.4,700 crores... So, there should not be any impact on the CRAR with this kind of number.

Quantifies the potential impact of the new ECL framework on CRAR and reassures investors that the bank's strong profitability will mitigate any adverse effects.

Asked by Participant

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Detailed narrative

Initiatives and Product Launches

Bank of India implemented CTS Continuous Clearing for faster cheque processing. New products include the BOI Surya Shakti Scheme for agriculture, and a bouquet of products for Gig Workers (Star Gig Grow Loan, GIG GearUP Loan). Two new credit card variants were introduced: Celestia Credit Card (Rupay Platinum Contactless Metal) for high-end customers and Rupay Women's Credit Card. The bank also partnered with Social Foundation Trust for its CSR initiatives.

Business Growth Overview

Global business grew by 12.54% YoY to Rs. 16,27,602 crore in Dec’25, with incremental growth of Rs. 1,81,000 crore. Global Gross Advances increased by 13.63% YoY to Rs. 7,40,314 crore, while Global Deposits rose by 11.64% YoY to Rs. 8.87 lakh crore. Domestic Gross Advances saw a 15.16% YoY increase to Rs. 6.29 lakh crore, with RAM advances growing 18.05% YoY to Rs. 3.68 lakh crore, constituting 58.54% of total advances.

Profitability and Asset Quality Improvement

Operating Profit increased by 13% YoY to Rs. 4,193 crore, and Net Profit grew by 7% YoY to Rs. 2,705 crore for Q3 FY26. Net Interest Income (NII) rose by 6% YoY to Rs. 6,461 crore, and Non-Interest Income surged by 30% YoY to Rs. 2,279 crore. Global NIM improved by 16 bps sequentially to 2.57%. Asset quality showed significant improvement, with Gross NPA ratio falling by 143 bps YoY to 2.26% and Net NPA ratio improving by 25 bps YoY to 0.60%. The Provision Coverage Ratio (PCR) increased to 93.60% in Dec’25 from 92.48% in Dec’24.

Deposit and Lending Dynamics

Domestic Deposits increased by 12.80% YoY to Rs. 7.65 lakh crore. However, the CASA ratio stood at 37.97%, with management noting a structural shift in deposits towards alternative investment avenues. The bank has actively churned its portfolio, moving away from low-yielding, Repo-linked advances to improve margins. Yield on Advances saw some compression due to 125 bps Repo rate cuts in 2025, impacting the 64% of the book linked to EBLR.

Digital Transformation and IT Investments

The bank is heavily investing in IT infrastructure, digital initiatives, and cybersecurity. Currently, 29 business journeys are live, with 24 on the loan side and 5 on the liability side. Automation efforts have saved approximately 50,000 man-hours during the nine months. Project Star Aditya, focusing on data lake, AI, ML, and generative AI, is generating use cases for business leads, underwriting, and control functions. About 10% of total operating expenses are allocated to IT Opex, alongside significant Capex on the IT side.

Future Outlook and Strategic Focus

For FY26, the bank guides for global advances growth of 13-14% and global deposit growth of 11-12%. It aims to maintain a NIM of around 2.50% for FY26, targeting 2.60% for Q4. The strategy includes mobilizing low-cost deposits, accelerating high-yielding advances, and prudent credit underwriting. The bank plans to open 600 branches over FY25-27, with 50-55 remaining for Q4 FY26 and 200 approved for FY27. The international book is targeted to be 15-16% of the global advances.

ECL Framework Impact

The bank has calculated the potential impact of the proposed Expected Credit Loss (ECL) framework. It estimates an impact of around 2% on its CRAR, translating to Rs. 4,600-4,700 crore. However, management believes that with the bank's strong profitability, projected at around Rs. 10,000 crore for the financial year, there should not be any material impact on the CRAR. The impact is expected to be spread across five years.

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