Bank of India expects NIMs to improve from Q4, says MD Karnatak
This story was originally published at 19:09 IST on 17 October 2025
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--Bank of India MD: Not planning to raise infra bonds immediately
--Bank of India MD: Expect NIMs to improve Q4 onwards
--CONTEXT: Comments from Bank of India mgmt in Jul-Sept earnings media call
NEW DELHI – State-owned Bank of India expects the pressure on its net interest margins to ease from the Jan-Mar quarter, its Managing Director and Chief Executive Officer Rajneesh Karnatak said on Friday. "Certain repricing of the deposit is yet to take place and once that happens in Q3 (Oct-Dec), the NIM should start improving, I would say from Q4 (Jan-Mar) onwards," Karnatak said, addressing a post-earnings press conference.
Bank of India reported a NIM of 2.41% in the September quarter, down from 2.81% a year ago and 2.55% in the previous quarter. "The 1% repo rate cut, which the RBI had done, has been fully taken into account in the Q2 quarter. So the last cut was in the month of June 2025 and this entire quarter from July to September has absorbed that cut," he said.
The bank's NIM shrinkage was in line with the rest of the industry due to the impact of the interest rate cuts, which are likely to be fully passed on in the September quarter. The Reserve Bank of India's Monetary Policy Committee has cut the benchmark repo rate by 100 basis points since February.
Bank of India posted a modest rise in net profit in the September quarter, owing to muted growth in income, even as the lender's provisions halved. The state-owned bank's net profit rose 8% to INR 25.55 billion in the reporting quarter. Sequentially, the bottom line was up 13%. Its net interest income dipped to INR 59.12 billion in Jul-Sept from INR 59.86 billion in the corresponding quarter a year ago.
Karnatak said the bank has no immediate plans to raise funds via infrastructure bonds. "We have no plans to raise (funds via) infra bonds. At least in Q3, we will not be raising." The board of Bank of India had in June approved issuance of long-term infrastructure bonds of up to INR 200 billion in 2025-26 (Apr-Mar).
"We will see how the market pans out and then we will decide on raising infra bonds. Last year, we raised the infra bonds. And another thing is that the present deposit rate, which is there in the market, is much lower than the rate at which the infra bond is going," he said.
On Friday, shares of Bank of India closed 1.8% lower at INR 123.11 on the National Stock Exchange. The bank announced its results after market hours. End
Reported by Sagar Sen and Kabir Sharma
Edited by Saji George Titus
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