The public sector bank Bank of India reported a significant increase in net profit in the first quarter of the financial year 27. Net profit reached 3,068 crore rupees, representing a growth of 36.23% compared to the same period last year, which resulted from healthy credit growth.
Quarterly Financial Performance
Net Interest Income (NII) for the reporting period increased by 12.61% year-on-year, amounting to 6,833 crore rupees compared to 6,068 crore rupees in the first quarter of financial year 26. However, the Net Interest Margin (NIM) slightly decreased to 2.52%, down from 2.55% the previous year.
Non-interest income reached 2,579 crore rupees, showing a year-on-year growth of 19.07%. This growth was driven by an increase in write-off recoveries (up by 89.13% to 609 crore rupees) and profits from foreign exchange operations (increased by 113.21% to 226 crore rupees), despite the profit from sale and revaluation of investments decreasing by 49.51% to 414 crore rupees.
Operational Expenses and Asset Quality
Operating costs were contained and increased by only 3.22% year-on-year, reaching 4,361 crore rupees. Personnel expenses increased by 8.64% to 2,603 crore rupees, but this was partially offset by a reduction in insurance and other expenses. The cost-to-income ratio sharply improved, falling to 46.33% from 51.31% the previous year.
Regarding asset quality, the Gross Non-Performing Assets (NPA) ratio improved to 1.81% from 2.92%, and the Net NPA ratio decreased to 0.51% from 0.75%. The provisioning coverage ratio strengthened to 93.83% from 92.94% the previous year. Furthermore, the slippage ratio improved to 0.24% from 0.33%, and credit costs decreased to 0.15% from 0.17%.
Bank Operations and Plans
Radjnish Karnataka, Managing Director of Bank of India, noted that in the current quarter, gross cash slippage amounted to about 1,800 crore rupees, while gross cash recovery reached approximately 1,900 crore rupees, meaning that recovery exceeded slippage.
In terms of business, global loans grew by 18.64% year-on-year, reaching 797,775 crore rupees. The growth was driven by an increase in retail loans by 20.60% to 166,170 crore rupees and a surge in RAM (Retail, Agriculture, MSME) segment loans by 19.75% to 392,833 crore rupees, which now constitute 58.30% of total domestic loans. Total deposits increased by 14.90% year-on-year, reaching 957,924 crore rupees, pushing the bank's total business beyond 17.55 lakh crore rupees, demonstrating a growth of 16.57%.
Bank of India has set a target to mobilize $1.2 billion in FCNR(B) deposits, having already attracted over $200 million. NRI communities in countries such as Canada, USA, UK, Singapore, Hong Kong, Japan, and Africa are showing interest. The bank operates in 15 countries, including 4 in Africa.
These deposits, currently valued at approximately 6.5%, are more advantageous than large deposits because they do not require maintaining CRR/SLR and have an RBI-managed swap. BoI expects the mobilization of these funds to help reduce the overall cost of deposits by replacing more expensive large deposits (approximately equivalent to 12,000–13,000 crore rupees) to finance credit growth.
The bank also plans to offer customers the option to use leverage against FCNR(B) deposits up to 9 times, offering this directly without third-party involvement. According to RBI timelines, the FCNR(B) leverage component should be ready by September 30, and related overseas borrowings are permitted until December 31. Separately, in accordance with RBI directives on external financing, the bank aims to attract approximately $2 billion by December 31 through Medium Term Notes (MTNs) and associated borrowing, subject to favorable market conditions.
Karnataka added that it plans to raise about $2 billion by December 31 through external borrowing and MTNs, and this is a target dependent on the market. The bank's Capital to Risk-weighted Assets Ratio (CRAR) improved to 18.69% as of June 2026, compared to 17.39% the previous year, with CET-1 capital standing at 15.97%. The bank's Board of Directors approved plans to raise up to 7,500 crore rupees in financial year 27 through Additional Tier 1 bonds (2,500 crore rupees) and Tier II bonds (5,000 crore rupees).
