Summary
Bank of India - Q3 FY26 Earnings Call Summary Tuesday, January 21, 2026 4:00 PM
Event Participants
Executives 4 P R Rajagopal (Executive Director), Pramod Kumar Dwibedi (Executive Director), Rajneesh Karnatak (MD & CEO), Subrat Kumar (Executive Director)
Analysts 5 Aditya Mundra (My Temple Capital), Ashok Ajmera (Individual), Jiten Bhatia (Ajmera), Rohit Shinde (Market Memories), Sushil Choksey (Indus Equity)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Global Deposits | ₹8.87 lakh crores | +11.64% YoY; Incremental growth of ₹92,500 crores, driven by retail term deposits (+14%). |
| Global Gross Advances | ₹7.40 lakh crores | +13.63% YoY; Incremental growth of ₹88,000 crores. |
| Domestic Advances | ₹6.29 lakh crores | +15.16% YoY; RAM segment remains the primary growth driver (+18.05% YoY). |
| CASA Ratio | 37.97% | -303 bps YoY; Reflects shift from idle deposits to investment avenues. |
| Net Interest Income (NII) | ₹6,461 crores | +6% YoY; Growth supported by credit expansion despite Repo rate cuts (-125 bps in 2025). |
| Global NIM | 2.57% | +16 bps QoQ; Improvement due to portfolio churning and shedding low-yielding assets. |
| Net Profit | ₹2,705 crores | +7% YoY; Nine-month FY26 profit reached ₹7,500 crores. |
| Gross NPA (GNPA) | 2.26% | -143 bps YoY; Significant improvement in asset quality despite a one-off corporate road slippage. |
| Net NPA (NNPA) | 0.60% | -25 bps YoY; Management targeting credit cost containment. |
| PCR | 93.60% | +112 bps YoY; Strong provision buffer maintained. |
| CRAR | 17.09% | +109 bps YoY; Well-capitalized to absorb future ECL impacts. |
Geographic & Segment Commentary
- RAM (Retail, Agri, MSME): This segment grew 18.05% YoY to ₹3.68 lakh crores, now constituting 58.54% of domestic advances. Retail led with 20% growth, followed by Agri (16%) and MSME (15%). Management aims to shift the long-term mix to 65% RAM and 35% Corporate.
- International Business: Global business stood at ₹16.27 lakh crores (+12.54% YoY). International advances contribute ~15% (₹1.10 lakh crores) of the book. The bank remains cautious on overseas corporate lending due to geopolitical uncertainty, focusing primarily on Indian corporates abroad.
- Gold Loans: The portfolio reached ₹47,000 crores as of Dec-25 with negligible NPAs of ₹70-75 crores. In response to rising gold prices, the bank tightened guardrails by reducing Loan-to-Value (LTV) to 75% (from 85-90%).
Company-Specific & Strategic Commentary
- BOI 125 Strategy: A long-term roadmap to reach ₹31 lakh crore total business by 2031 (the bank’s 125th year). The plan emphasizes a 65:35 RAM-to-Corporate credit mix to diversify risk and capture higher yields.
- Portfolio Churning: Management exited low-yielding AAA PSU Repo-linked loans (fetching ~6%) in favor of AA-rated corporate and retail assets, boosting NIMs by 25-40 bps on specific transactions.
- Digital Transformation: The bank is investing ~10% of total operating expenses into IT. 29 digital journeys are live, with a “Data Lake” (Project Star Aditya) implementing AI/ML for underwriting and transaction monitoring.
- Product Launches: Introduced “BOI Surya Shakti” (Solar financing), “Star Gig Grow/GearUP” for gig workers, and specialized “Celestia” and “Women’s” credit card variants.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Global Advances Growth | 13% - 14% for FY26 | Supported by a ₹80,000 crore credit pipeline (₹65,000 crore Corporate). |
| Global Deposit Growth | 11% - 12% for FY26 | Strategy focuses on mobilizing retail term deposits to counter CASA pressure. |
| Net Interest Margin (NIM) | ~2.60% for Q4 FY26 | Management expects protection of margins through repricing and RAM growth. |
| Recovery Targets | ₹7,200 - 7,300 crores for FY26 | Includes an aggressive focus on recovering ₹3,000 crores annually from written-off accounts. |
Risks & Constraints
| Risk | Context |
|---|---|
| Asset Quality (Slippages) | Fresh slippages rose to ₹1,100 crores (from ₹910 crores) due to a single “stressed road asset.” While management views this as one-off, SME and Agri segments remain the primary sources of routine slippage. |
| ECL Transition | The estimated impact of Expected Credit Loss (ECL) is ~₹10,000 crores (2% of CRAR). Management plans to spread this over 5 years (40 bps annually), which is comfortably covered by current profitability. |
| CASA Compression | CASA ratio declined as customers migrate funds to mutual funds, equity, and real estate. This increases reliance on more expensive retail term and bulk deposits. |
Q&A Highlights
Asset Quality & Monitoring
- Question: (Ashok Ajmera) Why did SMA-2 figures double to ₹4,120 crores?
- Answer: The increase is primarily due to three State Government-guaranteed accounts (totaling ~₹3,500 crores) that rolled over into SMA-2. Management expects no delinquency as these have sovereign backing. (Rajneesh Karnatak)
Lending Strategy
- Question: (Sushil Choksey) Are you shedding low-yielding advances like NABARD or SIDBI?
- Answer: Yes, the bank churned its portfolio away from Repo-linked AAA PSUs to assets yielding 25-40 bps higher. This helped improve Global NIM from 2.41% to 2.57%. (Rajneesh Karnatak)
Digital & IT
- Question: (Ashok Ajmera) What is the status of the digital transformation and IT spend?
- Answer: IT Opex now accounts for 10% of total OpEx. Automation has saved 50,000 man-hours over nine months. 29 digital journeys are active across loans and liabilities. (Rajneesh Karnatak)
New Products (Gig Workers)
- Question: (Rohit Shinde) What are the terms for the new Gig Worker and Shakti loans?
- Answer: Gig worker loans range from ₹2-5 lakhs with interest rates between 9.5-10.5%. The “Shakti” scheme (Agri) targets a book size of ₹500-1,000 crores with a 9% interest rate. (Ashok Pathak)
Key Takeaway
Bank of India delivered a resilient Q3 FY26 performance, characterized by 13.63% YoY credit growth and a significant 143 bps reduction in GNPA to 2.26%. Despite the system-wide challenge of maturing CASA deposits (ratio fell to 37.97%), the bank successfully improved its Global NIM to 2.57% through disciplined portfolio churning and 18.05% growth in the high-yield RAM segment. Strategically, the bank is pivoting toward its “BOI 125” roadmap, aiming for a 65% RAM credit mix and significant IT modernization, with 10% of OpEx now dedicated to digital initiatives. While a one-off corporate road slippage marginally increased quarterly slippages, strong capitalization (17.09% CRAR) and a robust recovery pipeline of ₹7,200+ crores provide a safety buffer against macro volatility. Management remains confident in achieving 13-14% credit growth for FY26 while maintaining a Q4 NIM of approximately 2.60%.
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