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Informist, Wednesday, Jan. 21, 2026

By Shubham Rana and Shweta

NEW DELHI – Bank of India expects credit growth to rise even higher in the next financial year starting April from current 14%, supported by a large pipeline of INR 800 billion, the bank's Managing Director and Chief Executive Officer Rajneesh Karnatak said. 

"So with the kind of pipeline that we are having of nearly 80,000 crore (INR 800 billion) of pipeline, of which the corporate pipeline is around 65,000 crores (INR 650 billion), it will help us grow in credit in the Q4 (Jan-Mar) and the Q1 of the next financial year," Karnatak said at a post-earnings call with analysts. "We are very confident that the growth numbers will be much better for the next financial year than what we are showing at this present time."

Bank of India Wednesday reported a net profit of INR 27.05 billion for the December quarter, up 7% on year. The bank's global advances rose 14% on year to INR 7.40 trillion as of Dec. 31. Domestic advances rose 15% on year to INR 6.29 trillion, with loans to the retail, agriculture, and micro, small, and medium enterprises portfolio rising 18% on year to INR 3.68 trillion. The bank sees loan growth of 13-14% in FY26.

Disbursement of the INR-650-billion corporate loan pipeline will happen over the next six months, in the March quarter and the June quarter, Karnatak said.

The bank is buoyant over its retail, agriculture, and micro, small, and medium enterprises portfolio and expects "very good" growth in FY27, Karnatak said. The segment makes up for nearly 60% of Bank of India's domestic loan book. The bank has changed its strategy for lending towards the agriculture sector, the managing director said. Rather than traditional agricultural areas such tractors and Kisan Credit Card, the bank is focused on allied agriculture and food processing, Karnatak said, adding that these segments have much better asset quality and margins.

Karnatak said the bank aims to increase the share of retail, agriculture, and micro, small, and medium enterprises portfolio to 65% over the next five years, when the total business should be at around INR 31 trillion. The retail, agriculture, and micro, small, and medium enterprises portfolio offers better margins and there is huge scope for increasing the MSME book, the managing director said. 

The management said it does not see further deterioration in asset quality in the March quarter and it "will be able to hold the run rate on the slippage side". The bank's fresh slippages increased to INR 10.90 billion in the December quarter from INR 10.45 billion a year ago and INR 8.87 billion a quarter ago. 

The bank's net non-performing assets ratio fell to 0.60% as of Dec. 31 from 0.65% as of Sept. 30 and 0.85% a year ago. The gross non-performing assets ratio of the bank also improved to 2.26% from 2.54% at the end of September. The bank's gross non-performing assets ratio was 3.69% as of Dec. 31, 2024. 

The bank expects its net interest margin to grow slightly in the March quarter. The lender's net interest margin improved to 2.57% in the December quarter from 2.41% in the trailing quarter. In the year ago quarter, the bank's net interest margin was 2.80%. "For the annualised FY26, we hope that we should be maintaining a NIM of around 2.50% and for the Q4 we should be somewhere around 2.60%," Karnatak said.

Asked about the impact of Reserve Bank of India's draft expected credit loss norms, Karnatak said there should not be any impact on the capital adequacy of the bank. The RBI's draft norms on the expected credit loss framework mandate that banks set aside more funds for potential bad loans on implementation. It also mandates that banks classify non-performing financial assets into three categories based on the period for which the asset has remained non-performing and the "realisability of the dues", while continuing to apply existing rules for classifying non-performing assets. The norms are proposed to come into effect from Apr. 1, 2027.

Karnatak said the expected credit loss norms could have an impact of around 2% on the bank's capital adequacy ratio, which was 17.09% as of Dec. 31. This would translate to a cost of less than INR 100 billion, spread across the next five years. "If you see the profitability which the bank is having, around 7500 crore (INR 75 billion) of net profit in the nine months, and which at this run rate should be around 10,000 crore (INR 100 billion) in this financial year itself, the managing director said. "So, there should not be any impact on the CRAR (capital adequacy ratio) with this kind of number." 

Shares of Bank of India Wednesday closed 1.4% lower at INR 157.48 on the National Stock Exchange.  End

Edited by Deepshikha Bhardwaj

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