💰 Financial Performance

Revenue Growth by Segment

Global Gross Advances grew 13.74% YoY to INR 6,66,047 Cr in FY25. Domestic credit grew 14.45% to INR 5,63,550 Cr. RAM (Retail, Agriculture, MSME) segment grew 17.02% YoY in Q2 FY26. Corporate credit pipeline exceeds INR 50,000 Cr, while RAM pipeline is approximately INR 20,000 Cr.

Geographic Revenue Split

Domestic operations contribute the majority of revenue through 5,375 branches (65% in rural/semi-urban areas). The international portfolio, spanning 15 countries and 22 branches, constitutes 15.76% of total advances as of September 30, 2025.

Profitability Margins

Net Interest Margin (NIM) stood at 2.48% for H1 FY26, down from 2.94% in H1 FY25. Return on Average Assets (ROA) was 0.91% in H1 FY26 compared to 0.95% in FY25. Net Profit for H1 FY26 was INR 4,807 Cr, an 18% increase YoY.

EBITDA Margin

Operating Profit for Q2 FY26 was INR 3,821 Cr, reflecting an 8% YoY decline from INR 4,147 Cr. Pre-provisioning operating profit (PPOP) for FY25 increased 17% to INR 16,412 Cr from INR 14,069 Cr in FY24.

Capital Expenditure

Not disclosed in absolute INR Cr for future periods; however, the bank is making requisite investments in digital banking infrastructure and has set up a new Supply Chain Finance (SCF) Cell at the Head Office to scale business across 76 identified branches.

Credit Rating & Borrowing

The bank maintains healthy capitalization with a CRAR of 16.69% and CET I of 13.89% as of September 2025. Cost of Deposits was 4.85% and Cost of Funds was 4.67% in H1 FY26, benefiting from a granular retail deposit franchise.

⚙️ Operational Drivers

Raw Materials

Cost of Funds (4.67%) and Cost of Deposits (4.85%) serve as the primary 'raw material' costs for banking operations.

Import Sources

Not applicable for banking; sourcing is domestic and international through a granular deposit base across 5,399 branches.

Key Suppliers

Not applicable; the bank relies on a diversified depositor base. Major domestic associates include STCI Finance Ltd (29.96% holding) and ASREC (India) Ltd.

Capacity Expansion

Current network includes 5,399 domestic branches and 22 overseas branches. Expansion is focused on digital channels and specialized cells like the Supply Chain Finance (SCF) Cell.

Raw Material Costs

Interest expended on deposits and borrowings. Cost of deposits remained stable at 4.85% in H1 FY26. The bank's strategy focuses on mobilizing low-cost CASA deposits (39.39% ratio) to safeguard NIM.

Manufacturing Efficiency

Yield on Advances was 7.91% in H1 FY26 compared to 8.51% in H1 FY25. Yield on Investments stood at 6.89%.

Logistics & Distribution

Distribution is handled via 5,399 branches and digital platforms. Operating expenses grew 13% YoY in FY25 to support this network.

📈 Strategic Growth

Expected Growth Rate

12-13%

Growth Strategy

Growth will be driven by a 12-13% target in global advances and 10-11% in global deposits for FY26. Key strategies include focusing on high-yield RAM segments (58.21% of domestic advances), scaling Supply Chain Finance, and utilizing the 'Grameen Credit Score' for rural market penetration.

Products & Services

Retail loans, agricultural credit, MSME loans, corporate credit, supply chain finance, merchant banking, mutual funds, and depository services.

Brand Portfolio

Bank of India (BOI), BOI Merchant Bankers Ltd, BOI Shareholding Ltd, Bank of India Investment Managers Pvt Ltd.

New Products/Services

Launch of Supply Chain Finance (SCF) through 76 branches; exploration of M&A financing, share advance financing, and IPO financing following recent RBI enablers.

Market Expansion

Focus on increasing the RAM segment's share of domestic advances and expanding digital interface to reduce operating costs.

Market Share & Ranking

Sixth-largest Public Sector Bank (PSB) in India in terms of advances as of September 30, 2025.

Strategic Alliances

Joint ventures and associates include STCI Finance Ltd, ASREC (India) Ltd, and international subsidiaries like Bank of India (Uganda) Ltd and PT Bank of India Indonesia, Tbk.

🌍 External Factors

Industry Trends

The industry is shifting toward digital banking and enhanced financial inclusion. BOI is positioning itself by adopting the 'Grameen Credit Score' and revamping Central KYC systems to drive exponential growth.

Competitive Landscape

Competes with other large PSBs and private banks; currently ranks as the 6th largest PSB by advances.

Competitive Moat

Moat is derived from strong Government of India parentage, a massive 5,399-branch network, and a granular retail deposit base (CASA of INR 2.86 lakh Cr). These provide a sustainable competitive advantage in cost of funds.

Macro Economic Sensitivity

Highly sensitive to interest rate cycles and global economic growth, which dictates the 12-13% advances growth guidance.

Consumer Behavior

Increasing shift toward digital banking and demand for specialized credit products like Supply Chain Finance.

Geopolitical Risks

Exposure to 15 countries makes the bank vulnerable to global trade barriers and macroeconomic shifts affecting international corporate clients.

⚖️ Regulatory & Governance

Industry Regulations

Transitioning to Expected Credit Loss (ECL) based provisioning; compliance with RBI's Net Stable Funding Ratio (113.88% achieved) and Statutory Liquidity Ratio (excess SLR of INR 39,076 Cr).

Environmental Compliance

Direct exposure to environmental risks is limited, but credit risk is monitored for asset classes adversely impacted by environmental factors.

Taxation Policy Impact

Taxation for Q2 FY26 was INR 825 Cr, up 13% YoY from INR 731 Cr.

Legal Contingencies

Not disclosed in specific case values; however, the bank monitors asset quality risks and potential legal/business risks through its Risk Management Committee.

⚠️ Risk Analysis

Key Uncertainties

Asset quality remains a monitorable risk with a GNPA of 2.54% and Net Stressed Assets at 15.27% of net worth as of March 2025. Slippage ratio was 1.36% in FY25.

Geographic Concentration Risk

65% of domestic branches are in rural and semi-urban areas, making the bank sensitive to the rural economy.

Third Party Dependencies

Dependency on Statutory Central Auditors (4 firms reappointed) and technology vendors for digital banking implementation.

Technology Obsolescence Risk

Risk of falling behind in digital interface; the bank is mitigating this by investing in people and systems to adopt global best practices.

Credit & Counterparty Risk

Gross NPA at 2.54% and Net NPA at 0.65% as of September 2025. SMA (Special Mention Accounts) declined from 6.88% to 4.69% YoY in FY25.