Bank of India Q3 Net Profit Rises 7% To ₹2,705 Crore On Higher Non-Interest Income, Targets 14% Loan Growth In FY26

Mumbai: State-owned Bank of India on Wednesday reported a 7 per cent rise in December quarter net profit at Rs 2,705 crore, helped by a rise in non-core income. The bank's core net interest income rose 6 per cent on-year to Rs 6,461 crore in the reporting quarter on the back of a 14 per cent growth in advances and the net interest margin compressing to 2.57 per cent from 2.80 per cent.

Its managing director and chief executive, Rajneesh Karnatak, said BoI is targeting to maintain loan growth at 13-14 per cent in FY26, but conceded that the NIMs will be challenging as the entire impact of RBI's 1.25 per cent rate cut plays out on its loan book. He said the bank will aim to maintain the NIMs and will exit FY26 with a 2.60 per cent NIM. The non-interest income rose 30 per cent to Rs 2,279 crore during the quarter, helped by a 78 per cent jump in profit from revaluation of investments at Rs 473 crore.

Karnatak said with the geopolitical tensions, the bank will focus on growing the domestic advances and added that it has a pipeline of Rs 80,000 crore of advances at various levels of sanction or disbursal. This includes Rs 65,000 crore of corporate advances, he said, adding that 60 per cent of them are term loan proposals, which will be deployed for new investments. The fresh slippages were stable on-year at Rs 1,100 crore for the reporting quarter, the MD said, adding that they included a single exposure of Rs 108 crore to the road sector. The gross non-performing assets ratio improved to 2.26 per cent from the quarter ago's 2.54 per cent.

Provisions for bad and doubtful debt were stable at Rs 205 crore for the quarter. The overall deposit growth came at 11.64 per cent, and Karnatak said that the banking system is facing challenges to grow the book, given a structural shift to park savings in other assets perceived to be high-yielding, like mutual funds and equity markets.

The share of the low-cost current and savings account deposits declined to 37.97 per cent as against 41.05 per cent in the year ago period, and Karnatak rued that People are only maintaining an optimum level of balance with banks as they chase alternative avenues. The overall capital adequacy for the bank stood at 17.09 per cent as of December 31, 2025, and the lender is not looking for any equity fund raise now. Karnatak said the bank will suffer a 2 percentage point hit on its capital buffers over five years on the implementation of the expected credit loss provisioning system.

It is estimated that the transition to the new system will lead to Rs 9,200 crore in provisions, he said. The Bank of India scrip closed 1.32 per cent down at Rs 157.55 apiece on the BSE on Wednesday, as against a 0.33 per cent correction on the benchmark. 

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