CALCULATE YOUR SIP RETURNS

Bank of India Expects Loan Growth to Surpass Guidance of 12–13% in FY26

Written by: Akshay ShivalkarUpdated on: 20 Oct 2025, 9:59 pm IST
Bank of India expects to surpass 12–13% loan growth guidance in FY26, driven by strong retail, MSME, agriculture segments and their improving NIMs.
Bank of India Expects Loan Growth to Surpass Guidance of 12–13% in FY26
ShareShare on 1Share on 2Share on 3Share on 4Share on 5

Bank of India has indicated that its loan growth for FY26 is likely to exceed the current guidance of 12–13%. The bank attributes this to strong traction in retail, MSME, and agriculture segments, which have shown consistent expansion. MD & CEO Rajneesh Karnatak shared the outlook during an interaction with CNBC TV18. He stated that the bank's strategy remains focused on maintaining growth momentum whilst managing risks.

Loan Growth Outlook for FY26

Bank of India recorded loan growth of 14% on a global basis, with domestic performance showing stronger momentum. Retail lending grew 19%, MSME 16%, and agriculture 13%, leading to a 17% rise in RAM segments year-on-year.

Corporate credit recorded double-digit growth at around 10%, contributing to overall expansion. Karnatak noted that the guidance of 12–13% was conservative. The bank is confident of surpassing it in FY26.

Profitability and Margins in FY26

Global net interest margin (NIM) stood at 2.55%, whilst domestic NIMs were stronger at 2.86%. Karnatak expects improvement from Q3 FY26 as repricing benefits flow through. "We should see a better uptick in net interest income from Q4," he said.

The bank's NIM guidance for FY26 is around 2.6%, assuming no further rate cuts by the Reserve Bank of India. Karnatak added that 63% of the bank's loan book is linked to the repo rate. This could impact margins if rates are reduced.

Asset Quality and Credit Cost Trends

Asset quality indicators remained stable during the quarter. SMA accounts above ₹5 crore declined from ₹8,000 crore in Q1 FY26 to ₹6,000 crore in Q2 FY26. They now form less than 1% of the standard loan book.

Credit cost fell to 0.28% in Q2 FY26 from 0.55% in Q1 FY26, aided by lower slippages. Recovery and upgrades during the quarter stood at ₹3,253 crore. This was higher than ₹1,739 crore in the previous quarter.

Bank of India Share Price Performance

Bank of India's market capitalisation stands at ₹59,080 crore. Shares of the bank have gained 23.8% in the past year. This reflects investor confidence in its financial performance.

Wholesale advances grew 11.6% year-on-year, whilst domestic advances rose 11%. Deposits showed healthy growth, with CASA deposits up 8%. This supports the bank's liquidity position and growth trajectory.

Conclusion

Bank of India reported strong growth in retail, MSME, and agriculture lending. This contributes to overall loan expansion beyond its FY26 guidance. Margins are expected to improve from Q3 FY26, whilst asset quality remains stable with declining credit costs. The bank continues to monitor interest rate trends and credit performance closely, maintaining its focus on balanced growth across segments.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Oct 20, 2025, 4:29 PM IST

Akshay Shivalkar

Akshay Shivalkar is a financial content specialist who strategises and creates SEO-optimised content on the stock market, mutual funds, and other investment products. With experience in fintech and mutual funds, he simplifies complex financial concepts to help investors make informed decisions through his writing.

Know More

We're Live on WhatsApp! Join our channel for market insights & updates

Open Free Demat Account!

Join our 3 Cr+ happy customers

+91
Enjoy Zero Brokerage on Equity Delivery
4.4 Cr+DOWNLOADS
Enjoy ₹0 Account Opening Charges

Get the link to download the App

Get it on Google PlayDownload on the App Store
Open Free Demat Account!
Join our 3 Cr+ happy customers