Analyst Concall
Bank of India MD says NII, NIM to improve in Q2, Q3
This story was originally published at 21:13 IST on 29 July 2025
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--Bank of India MD: See credit cost around 0.7% for FY26
--CONTEXT: Comments by Bank of India's mgmt in post-earnings analyst call
--Bank of India MD: See net NPA around 0.7% for FY26
--Bank of India MD: Aim to keep CASA ratio at 40% by end FY26
--Bank of India MD: Don't see further repo rate cuts in short-term
--Bank of India MD: Budgeted INR 20 bln to spend on IT in FY26
--Bank of India MD: Expect gross cash recovery of INR 95 bln in FY26
--Bank of India: See NIM at 2.5-2.6% for FY26
--Bank of India MD: Expect interest income to improve in Q2, Q3
By Shubham Rana and Vaishali Tyagi
NEW DELHI – Bank of India expects its net interest income and net interest margin to improve in the September and December quarters after a poor performance in the first quarter of 2025-26 (Apr-Mar), the bank's Managing Director and Chief Executive Officer Rajneesh Karnatak said Tuesday.
The bank's net interest income fell 3% on year to INR 60.68 billion in Apr-Jun. The net interest margin moderated to 2.55% from 2.61% a quarter ago and 3.07% a year ago. The net interest margin has bottomed out for the bank at 2.55% and is seen at 2.5-2.6% for FY26, Karnatak said at a post-earnings conference call with analysts.
"We have not done well on the net interest income side. We expect that Q2 and Q3 will be much better as far as the interest income for the bank is concerned," Karnatak said. "So once the interest income for the bank improves and the outstanding in the advances improves, obviously the net interest income and finally the net interest margins will improve."
Bank of India Tuesday reported a net profit of INR 22.52 billion for the June quarter, up 32% on year. The rise in net profit was led by a five-fold rise in trading gains during the quarter.
Karnatak said the bank does not expect the Reserve Bank of India to further lower the repo rate in the short term. The RBI's Monetary Policy Committee has lowered the repo rate by 100 basis points in the current calendar year to 5.50%.
Bank of India's credit cost fell to 0.68% in Apr-Jun from 0.84% a quarter ago and 0.85% a year ago. The bank expects credit cost to stay around 0.7% during FY26, Karnatak said. Net non-performing asset ratio is also seen at around 0.7% during FY26. It was 0.75% as of Jun. 30. Bank of India expects gross cash recovery of INR 95 billion in FY26.
The bank's current account savings account ratio fell to 39.88% as of Jun. 30 from 40.29% a quarter ago. The bank's management said it aims to keep the CASA ratio at 40% by the end of FY26. The bank has a budget of INR 20 billion to spend on information technology in FY26, Karnatak said. End
Edited by Tanima Banerjee
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