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Informist, Friday, Oct. 17, 2025

--Bank of India MD: No communication from govt yet on PSU banks merger 

--CONTEXT: Comments from Bank of India mgmt in Q2 earnings analyst call 

--Bk of India MD: Looking forward to fund mergers from domestic, offshore book

--Bank of India MD: Aim for INR 100 bln of recoveries in FY26 

By Kabir Sharma and Krity Ambey

MUMBAI/NEW DELHI – There is no communication from the government on the merger of small state-owned banks with larger ones, Rajneesh Karnatak, managing director and chief executive officer of Bank of India, said Friday. "We have no idea about that," Karnatak told analysts after the bank announced its earnings for the September quarter. "Whatever we are reading, we are reading from the press... it is the government which has to take the decision."

According to some media reports, the government has been preparing for another round of consolidation in the public banking sector, with plans to merge smaller lenders into larger state-run banks. 

On the new merger financing norms introduced by the Reserve Bank of India, Karnatak said the bank welcomes the move and looks forward to finance mergers from its domestic and offshore books. "...we are definitely interested in financing these merger and acquisition transactions, not only from the domestic book, but also from the international book," he said. "And why only GIFT (Gujarat International Finance Tec-City) City, we may also do it from some of our international branches like New York, London, Singapore, and others." 

The bank aims to touch the INR 100-billion mark in terms of recoveries made in the current financial year, Karnatak said. It recovered INR 16.93 billion in the September quarter alone. The managing director also said the bank's net interest margin will improve hereon. "I think that the NIMs should start improving from the Q4 (Jan-Mar) quarter onwards once this re-pricing in the liability side works over," he said.

Loan growth is expected to be better in the second half of the financial year, Karnatak said. "In all segments, whether it is retail, agriculture, MSME (micro, small, and medium enterprise), corporate, we are seeing healthy growth ... and with this kind of growth, which has already happened in H1 (Apr-Sept), we expect that H2 (Oct-Mar) should be even better. The bank has a global credit pipeline of INR 700 billion out of which more than INR 500 billion is for corporates," he said.

Bank of India's net profit saw steady increase in the September quarter due to slow growth in interest income, even as the lender's provisions halved. The state-owned bank's net profit for the quarter rose 8% to INR 25.55 billion. Sequentially, the bottom line was up 13%. Bank of India's net interest income dipped to INR 59.12 billion in Jul-Sept from INR 59.86 billion a year ago. Friday, its shares closed 1.8% lower at INR 123.11 on the National Stock Exchange. The bank announced its results after market hours.  End

Edited by Rajeev Pai

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