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Informist, Friday, May 8, 2026

--Bank of India: Expect return on assets to touch 1% for FY27 

--Bank of India: Focus is on retail advances as these have better margin 

--CONTEXT: Comments by Bank of India's mgmt in post-earnings analyst call 

--Bank of India: Expect domestic NIM to be around 3% in FY27 

--Bk of India: Don't see more than 10 bps impact of ECL norms on credit cost 

By Vaishali Tyagi and Nandini Sinha 

NEW DELHI/MUMBAI – Bank of India expects its domestic net interest margin to be around 3% in 2026-27 (Apr-Mar), the bank's management told analysts in a conference call after announcing the March quarter earnings. The lender's net interest margin fell to 2.58% in the March quarter from 2.57% in the trailing quarter. In Jan-Mar 2025, the bank's margin was 2.61%.

"As far as the domestic NIM is concerned, definitely we are targeting to get as close to 3% as possible," the management said. "As far as the raising of resources is concerned, we are very confident that we will be able to protect our NIMs in FY27 with certain strategies. One of them is that we want to increase our MCLR (marginal cost of funds based lending rate) advances. Second, that we want to increase more of our RAM (retail, agriculture, and micro, small and medium enterprises advances) because there the margins are much better.

Further, the management also said they plan to grow mid-corporate advances through their emerging corporate credit branches, as NIMs are higher in that segment.

The company announced its earnings after market hours on Friday. The lender's net profit was at INR 30.16 billion for Jan-Mar, up nearly 15% on year. Sequentially, it grew nearly 12%. 

Bank of India expects to improve its return on assets and touch 1% in FY27, the management said. The bank's RoA rose to 1.01% in the March quarter. However, RoA for the full year stood at 0.93%, up from 0.90% a year ago, the management said. "So there has been an improvement...because of the net interest income issue (pressure on net interest income), we could not improve our RoA to the desired number which it should have been...but we expect for 1% RoA by March 2027," the management said. 

Asked about the impact of the new expected credit loss guidelines, the bank's management said there will be some impact on credit cost. "We have already done lot of homework and preparation since the draft guidelines have come," the management said. "We have already onboarded one of the big fours for the transitioning towards the ECL regime and already the teams have already been made in our head offices." The bank's management said they do not expect these norms to impact credit cost by more than 10 basis points. The bank's credit cost was at 0.65% as on Mar. 31, up from 0.34% as on Dec. 31, but down from 0.84% reported a year ago.  

On Friday, shares of Bank of India closed 0.4% lower at INR 139.77 on the National Stock Exchange.  End

Edited by Deepshikha Bhardwaj

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