Revenue
Margin
Demand
Guidance
Tone
Bank of India Limited - Q1 FY2027 Earnings Call Summary Friday, July 24, 2026 2:00 PM GMT
Event Participants
Executives
3 P. R. Rajagopal, Rajiv Mishra, Rajneesh Karnatak
Analysts
2 Ashok Kumar Ajmera, Unknown Analysts
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Global business | ₹17.55 lakh crores | +16.57% YoY from ₹15.06 lakh crores; incremental growth of ₹2.49 lakh crores |
| Global deposits | ₹9.58 lakh crores | +14.90% YoY from ₹8.34 lakh crores; incremental ₹1.24 lakh crores |
| Domestic deposits | ₹8.25 lakh crores | +16.5% YoY from ₹7.10 lakh crores |
| CASA ratio | 36.68% | CASA up ₹20,000+ crores YoY to ₹3.02 lakh crores; ratio down ~3% as bulk deposits raised to fund credit growth |
| Global advances | ₹7.98 lakh crores | +18.84% YoY from ₹6.72 lakh crores; incremental ₹1.25 lakh crores |
| Domestic gross advances | ₹6.74 lakh crores | +19.20% YoY from ₹5.65 lakh crores |
| RAM advances | ₹3.93 lakh crores | +19.75% YoY; now 54.30% of total advances |
| GNPA | 1.81% | Improved 111 bps YoY |
| NNPA | 0.51% | Improved 24 bps YoY |
| Provision coverage ratio | 93.63% | Up from 92.94% in June '25 |
| Slippage ratio | 0.24% | Down from 0.33% YoY; fresh slippages ~₹1,800 crores vs ₹2,100 crores year ago despite seasonally high Q1 |
| Credit cost | 0.15% | Down from 0.17% YoY |
| Net profit | ₹3,068 crores | +36% YoY from ₹2,252 crores |
| Operating profit | ₹5,051 crores | +25.99% YoY from ₹4,009 crores |
| Net interest income | ₹6,833 crores | +12.61% YoY from ₹6,068 crores |
| Non-interest income | ₹2,579 crores | +19.07% YoY from ₹2,166 crores |
| Global NIM | 2.52% | Down 3 bps YoY from 2.55%; NIMs under pressure from rate environment |
| ROA | ~1.0% | Touched 1% in Q1; Q4 FY26 delivered 1.01% |
| Cost-to-income | ~46% | Q1 aided by cost controls and ATM rationalization |
| CRAR | 18.69% | Up from 17.39% in June '25 |
Geographic & Segment Commentary
- Domestic Business: Domestic deposits grew 16.5% YoY to ₹8.25 lakh crores and domestic gross advances 19.20% YoY to ₹6.74 lakh crores, ahead of system credit growth. Deposit mix came under pressure with CASA and retail term deposit ratios each down ~3%, offset by lower cost of deposits (-15 bps).
- RAM (Retail, Agriculture, MSME): RAM advances grew 19.75% YoY to ₹3.93 lakh crores, constituting 54.30% of the book. Gold loans at ~₹57,000 crores growing ~25% YoY, yielding ~9.10% with NPA below ₹100 crores; stressed gold NPAs monetized by sale within 90 days of three notices.
- Corporate & International: International business crossed ₹2.56 lakh crores for the first time. 32% of the international loan book is low-margin trade finance, which management is replacing with Indian and local corporate lending to lift NIMs. Combined corporate/international pipeline stands at ~₹70,000 crores; GIFT City is a key strategic hub.
- Personal Loans: Growth deliberately held to ~3% YoY via guardrails on low-ticket and non-salaried personal loans to protect asset quality amid industry stress and the West Asia crisis.
Company-Specific & Strategic Commentary
- Sales Restructuring: Established a dedicated centralized sales vertical with end-to-end responsibility for customer acquisition and revenue; set up a Strategic Business Branch (SBB) in Mumbai for high-value pool buyouts, co-lending, trade and supply chain financing.
- Digital Initiatives: Launched virtual personalized RuPay debit card via BOI Omni Neo; BOI Star Choice current account (custom last-7-digits); central Video-CIP center in Mumbai for fully digital account opening; Kenya mobile banking app live with M-Paisa integration. 22% of domestic credit sanctions are now digital; data lake + CRM Next leads have generated ₹18,000+ crores of business.
- Foreign Currency Mobilisation: Targeting $1.2 billion FCNR(B) by September 30, 2026 ($200+ million already raised); $2 billion OFCB/MTN by December 31, 2026; ~$1 billion ECB — combined ~$4.3 billion. FCNR rates 6.25-6.50% with ~50 bps clean spread on 5-year tenor; leverage product up to 9x approved.
- ECLGS 5.0: ~₹6,000 crores sanctioned and ₹4,600 crores disbursed; ~₹8,000 crores expected by scheme end, cushioning MSMEs hit by West Asia-driven working capital strain.
- Cost & HR Initiatives: Rationalized ~300 unviable ATMs (OpEx/CapEx review) as part of cost optimization; STAR LIGHT program for upskilling/reskilling with domestic and international training rotations.
- Credit Cards: Revamped card platform; targeting 3 lakh card base by end FY27 (Rajiv Mishra).
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Global advances growth | 15-16% YoY, FY27 | Unchanged from prior guidance; supported by >₹1 lakh crore total pipeline |
| Global deposits growth | 13-14% YoY, FY27 | Unchanged; improving deposit mix via retail term and FCNR mobilization |
| ROA | 1%+ consistently, FY27 | Q1 touched 1%; Q4 FY26 was 1.01%; focus on cost control and treasury income |
| Global NIM | 2.55-2.60%, FY27 | NIMs under challenge from rate scenario and West Asia; supported by FCNR (no CRR/SLR) and better-yielding mid-corporate/international re-pricing |
| Cost-to-income | 48-49%, FY27 | Q1 came in at ~46%; benign compared to guidance due to cost optimization |
| Foreign currency inflows | ~$4.3 billion by Dec 31, 2026 | FCNR window to Sept 30; OFCB/MTN window to Dec 31; ECB in-principle approvals of ~$500 million in 4-5 accounts |
| Credit cards | 3 lakh base by FY27 end | Revamped offering post system overhaul; current base not disclosed |
Risks & Constraints
| Risk | Context |
|---|---|
| West Asia geopolitical stress | Direct impact being monitored in chemicals, ceramics, oil/gas import and export-linked sectors; working capital cycles stretched. SMA (>₹5 crores) at ₹4,070 crores (0.52% of standard book) validates limited stress so far, with ECLGS as the government backstop. |
| Interest rate cycle | 60% of loan book is repo-linked external benchmark — a repo hike would lift loan yields but stress the investment book; the opposite applies on cuts. Management sees yield on advances pausing declines and cost of deposits continuing to fall. |
| Deposit mix erosion | CASA ratio down ~3% and retail term deposits down ~3% as the bank raised bulk deposits (>₹3 crores) to fund 18.84% credit growth; a structural shift of savings toward equity/MF/insurance is acknowledged. |
| Personal loan asset quality | Industry-wide stress in low-ticket and non-salaried personal loans; bank's guardrails cap growth at ~3% YoY, accepting lower business growth to protect quality. |
| Monsoon uncertainty | Uneven monsoon progress may impact food prices and rural demand, with implications for agriculture-linked portfolios. |
| International book NIMs | 32% of international book in low-margin trade finance; re-positioning toward corporate lending could take time before NIM benefit materializes. |
Q&A Highlights
West Asia Stress & ECLGS
- Question: Is there any emerging stress in MSME/small accounts from West Asia, and how is ECLGS 5.0 disbursement progressing? (Ashok Kumar Ajmera, Ajcon Global Services)
- Answer: SMA (>₹5 crores) reduced to ₹4,070 crores (0.52% of standard book) from ₹4,700 crores in March and ₹7,000+ crores a year ago; fresh slippages of ~₹1,800 crores are lower than ₹2,100 crores in Q1 FY26. ECLGS: ₹6,000 crores sanctioned, ₹4,600 crores disbursed, expecting ~₹8,000 crores by scheme end. Closely monitoring chemicals, ceramics, oil/gas import sectors but see no crisis impact yet. (Rajneesh Karnatak)
FCNR(B) & Foreign Currency Mobilisation
- Question: What is the bank's plan under the RBI's FCNR and other foreign deposit windows? (Ashok Kumar Ajmera; Unknown Analyst)
- Answer: FCNR(B) target of $1.2 billion by Sept 30 ($200+ million already raised through 250 AD/NRI branches across 13 FGMs and presence in 15+ countries); plus $2 billion OFCB/MTN by Dec 31 and ~$1 billion ECB — combined ~$4.3 billion. Rates: 6.25% (3yr), 6.30% (3-4yr), 6.50% (5yr) with ~50 bps clean spread since RBI bears hedging cost; no CRR/SLR; leverage product approved up to 9x. (Rajneesh Karnatak)
GIFT City & Gold Loans
- Question: What are the plans for GIFT City and scaling gold loans? (Unknown Analyst)
- Answer: Corporate/international pipeline ~₹70,000 crores including GIFT City. Gold loan book stands at ~₹57,000 crores, yield ~9.10%, NPA <₹100 crores, growing ~25% YoY; stressed loans are liquidated within 90 days of three notices. (Rajneesh Karnatak)
Guidance: ROA, NIM, CIR
- Question: Can the bank hold ROA above 1%, NIM of 2.52% and CIR at/below 46.3% in Q2 and FY27? (Niteen, Aurum Capital)
- Answer: FY27 guidance unchanged: ROA of 1%+ on a consistent quarterly basis; global NIM of 2.55-2.60%; CIR of 48-49% (Q1 delivered ~46%). (Rajneesh Karnatak)
Yield & Cost of Deposit Strategy
- Question: What will be the trend for yields versus cost of funds through the year? (Niteen, Aurum Capital)
- Answer: Cost of deposits falling and expected to decline further via RAM growth, retail term deposits and FCNR (no CRR/SLR). Yield on advances expected to pause declines and improve via higher MCLR-linked lending, 19 emerging corporate credit branches targeting ₹25-250 crore advances (better spreads, LCBG commissions, process fees) and reducing low-margin international trade finance. (Rajneesh Karnatak)
Personal Loans & Credit Cards
- Question: Why did personal loans grow only 3% YoY, and how many credit cards were added? (Unknown Analyst)
- Answer: Guardrails were placed on low-ticket and non-salaried personal loans due to industry stress; focus is on salaried service-sector customers with mandates on BOI accounts. Credit card offering was revamped; target of 3 lakh cards by FY27 end. (Rajneesh Karnatak; Rajiv Mishra)
CASA Decline, ATM Rationalization, Mutual Fund
- Question: How did cost of deposits fall 15 bps despite CASA and retail term deposit ratios each falling ~3%? Also on 300 ATMs closed and MF IPO plans. (Unknown Analyst)
- Answer: Deposit traction is in the ₹3-25 crore fixed deposit bucket at finer rates versus jumbo bulk deposits; structural savings shift to equity/MF/insurance is acknowledged. ATMs were rationalized under OpEx/CapEx review where unviable; part of cost optimization. Mutual fund AUM at ₹16,000-17,000 crores is too small for a public issue; no current plans. (Rajneesh Karnatak)
PSL Income & AS-15
- Question: How should PSL income for the remaining quarters be viewed (Q1 base ₹277 crores), and will there be AS-15 reversal? (Lavish, Morgan Stanley)
- Answer: Strong RAM growth should allow PSL income in Q2 and Q3 as well, though quantum not guided. No plans for AS-15 provision reversal. (Rajneesh Karnatak)
Key Takeaway
Bank of India delivered a strong Q1 FY27 with net profit up 36% YoY to ₹3,068 crores, driven by 25.99% operating profit growth, 12.61% NII growth, and credit cost at 0.15%. Asset quality improved further — GNPA at 1.81%, NNPA at 0.51%, PCR at 93.63% — while CRAR at 18.69% provides significant headroom. Strategy is anchored on secular growth: RAM advances up 19.75% (54.30% of book), gold loans growing ~25% to ₹57,000 crores, and international business crossing ₹2.56 lakh crores with low-margin trade finance being replaced by corporate lending. Management retained FY27 guidance of 15-16% global advances growth, 13-14% deposit growth, ROA of 1%+, NIM of 2.55-2.60%, and CIR of 48-49%, with ~$4.3 billion of foreign currency inflows targeted by December. Key watch points are West Asia-driven stress in chemicals/ceramics/import-export sectors (cushioned by ECLGS 5.0 with ₹6,000 crores sanctioned), CASA mix pressure from bulk deposit funding, and deliberately suppressed personal loan growth at 3% YoY on asset quality guardrails.