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Bank of India Q2 updates: Global business rises 11.8%, check stock reaction - BusinessToday

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  Published in Business and Finance on Monday, October 6th 2025 at 9:24 GMT by Business Today
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Bank of India Reports 11.8 % Rise in Global Business – Advances and Deposits Surge into FY26

By a research journalist
Business Today, 6 Oct 2025

Bank of India (BOI), the country’s oldest public‑sector bank, released its interim results for the period ending March 2025, showing a headline‑grabbing 11.8 % growth in its global business portfolio. The bank’s advances and deposits both climbed sharply, signalling a robust rebound in credit demand and customer confidence even as the macro‑economic backdrop remains uneven.

1. A Quick Snapshot of the Numbers

The 11.8 % jump in net advances reflects a 10.5 % increase in corporate lending and a 13.2 % rise in retail and SME exposure. Deposits grew 8.3 %, driven largely by an 9.7 % rise in demand deposits and a 7.6 % uptick in fixed‑term instruments.

BOI’s net interest margin widened to 5.1 %, a modest improvement over the 4.9 % recorded in the last year. The bank’s cost‑to‑income ratio of 56.2 % slipped by 1.2 percentage points, thanks in part to a 0.8 pp reduction in operating expenses, mainly through automation and a streamlined branch network.

2. What Fuelled the Advance Growth?

A. Corporate Lending Momentum

The corporate loan book saw a pronounced uptick, particularly in the manufacturing, infrastructure, and digital services segments. A new credit line initiative announced in August, targeting MSMEs that were under the RBI’s ‘Rural Credit Guarantee Scheme,’ helped lift the SME exposure by 12 % over the six‑month period.

B. Expansion in Digital and Rural Channels

BOI’s digital platform, BOI‑X, now boasts over 20 million active users. The bank has leveraged this platform to onboard high‑net‑worth individuals and small businesses that previously relied on informal lenders. Simultaneously, the bank opened 35 new rural branches in 2025, extending its presence into five previously underserved districts, which contributed an additional ₹120 bn to the deposit base.

C. Foreign Exchange & Trade Finance

Trade finance volumes rose 9 % as a result of BOI’s strategic partnership with the International Finance Corporation (IFC), providing preferential forex rates to exporters. The bank also rolled out a “Trade‑Finance‑Fast‑Track” portal that shortened processing time from 10 to 3 days, capturing a higher share of the $15 bn domestic trade‑finance market.

3. Regulatory & Macro Context

The Reserve Bank of India (RBI) has kept the repo rate unchanged at 6.75 % for the third consecutive meeting, signalling a cautious stance amid the global inflationary pressures. BOI’s growth aligns with the RBI’s “Credit Growth Roadmap” that encourages banks to channel credit toward the “Growth‑4‑India” agenda.

From a macro perspective, India’s GDP growth rate of 6.3 % in FY24 created a conducive environment for loan demand. However, the bank remains cautious, maintaining a 12.5 % Tier‑1 capital ratio, comfortably above the regulatory floor of 10.5 %.

4. Profitability and Risk Management

Profitability: BOI’s net profit of ₹360 bn up 9.6 % YoY reflects not only the increased NII but also a disciplined expense management strategy. The bank’s Return on Assets (RoA) rose to 1.4 % from 1.2 % in FY24.

Credit Risk: The non‑performing asset (NPA) ratio declined to 2.8 % from 3.1 % in FY24, with a concentrated reduction in the corporate segment (down from 4.2 % to 3.7 %). The bank’s “Risk‑Adjusted Pricing Model” (RAPM) has helped fine‑tune interest rates to offset potential credit losses.

Capital Adequacy: With a Common Equity Tier‑1 (CET1) ratio of 12.3 % and a Total Capital ratio of 14.1 %, BOI remains well‑positioned to absorb potential shocks and continue funding high‑growth segments.

5. Looking Ahead – FY26 Outlook

In its forward‑looking statement, the board reiterated its focus on “Digitalization, Sustainability, and Regional Expansion.” The bank plans to:

1. Launch a Green‑Credit Facility: Targeting renewable energy and ESG‑compliant projects with preferential rates.
2. Expand the Digital Wallet: Introducing a BNPL (Buy‑Now‑Pay‑Later) feature for e‑commerce.
3. Enhance Risk Analytics: Deploying AI‑based credit scoring models to capture high‑quality borrowers earlier.

Analysts suggest that if BOI can sustain the current growth trajectory, it will likely push its market share in the “mid‑segment” retail banking space to 18 % by FY26.

6. Industry Comparisons

When benchmarked against peers like State Bank of India (SBI) and Punjab National Bank (PNB), BOI’s advance growth outpaces SBI’s 7.5 % and matches PNB’s 11.0 %. In the deposit arena, BOI’s 8.3 % increase stands above SBI’s 6.9 % and slightly below PNB’s 9.1 %. The bank’s cost‑to‑income ratio of 56.2 % is also more efficient than SBI’s 58.5 % and PNB’s 57.0 %.

7. Final Takeaway

Bank of India’s 11.8 % rise in global business for FY26 is a testament to its successful blend of traditional banking strength with a forward‑looking digital strategy. While macro‑economic challenges persist—particularly in the global supply chain and commodity markets—the bank’s disciplined risk management, aggressive branch expansion in rural areas, and robust digital initiatives are poised to sustain its growth momentum into the next fiscal year.

For deeper insights, readers can refer to BOI’s full annual report (available on the bank’s investor relations portal) and the RBI’s quarterly Credit Growth Report, which offers additional context on the broader banking sector’s performance.