Bank of India guides for 14-15% credit growth in FY25, NIM of 2.85-2.90%
This story was originally published at 19:59 IST on 24 January 2025
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--Bank of India: See FY25 NIM around 2.85-2.90%
--CONTEXT:Remarks by Bank of India officials in post-earnings press briefing
--Bank of India: Targeting gross recoveries double the slippages
--Bank of India: On track to meet FY25 gross recovery target of INR 80 bln
--Bank of India: Microfinance book not very large, around 1% of global book
--Bank of India: Don't see stress in our microfinance book
--Bank of India: See FY25 credit growth at 14-15%, deposit growth at 13-14%
NEW DELHI – Public sector lender Bank of India expects its loans to grow 14-15% in 2024-25 (Apr-Mar) and has guided for 13-14% growth in deposits. Speaking to reporters on Friday after announcing its quarterly results, Rajneesh Karnatak, the bank's managing director and chief executive officer, also said he sees the full-year net interest margin around 2.85-2.90%.
Earlier on Friday, the bank reported a 34.6% year-on-year growth in its net profit to INR 25.17 billion for Oct-Dec, aided by a sharp fall in provisions and a jump in other income. The bank declared its earnings post market hours, with its shares having closed 1.3% lower at INR 98.37 on the National Stock Exchange. As on Dec. 31, the bank's global advances were up 15.3% on year at INR 6.52 trillion, while global deposits stood at INR 7.95 trillion, 12.3% higher from a year ago. The net interest margin declined marginally in Oct-Dec to 2.80%, although for Apr-Dec it was 2.90%.
"...yield on advances has improved from 8.45% to 8.55% and our cost of deposits has marginally (gone up) by only 1 basis point from 4.95% to 4.96%. So the gap...is now a very healthy number of 3.59%, which is helping us improve the net interest income and overall net interest margin," Karnatak said. Commenting on the full-year profit, he expressed confidence about the bank meeting the guidance of INR 80 billion considering the Apr-Dec net profit figure is at INR 65.93 billion. The bank chief also dismissed concerns about issues in the microfinance book, saying there is no stress as such and that the book was not very large and only made up around 1% of the global book.
Karnatak also said the bank has set itself an internal target of making recoveries that are double the slippage amount.
"Internally, the top management and the bank, we have decided that we will be targeting a number of 2x. So whatever is the fresh slippage, we will be doing the gross cash recovery of two times of that," Karnatak said. In Oct-Dec, Bank of India saw fresh slippages of INR 10.45 billion with gross cash recovery at INR 18.36 billion.
"We have already given a guidance of around INR 73 billion of fresh slippage during this year. That number we maintain. We will be within that number for FY25. As far as recovery is concerned, there also we have a guidance of nearly INR 80 billion during the year and we are on target for that," he added. End
Reported by Siddharth Upasani
Edited by Deepshikha Bhardwaj
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