Bank of India Q2FY26 results: Net profit up 7.62% on dip in credit costs

The Mumbai-based lender's shares ended 1.67 per cent lower, closing at Rs 123.30 per share on the BSE

Public sector lender Bank of India (BOI) on Friday reported a 7.62 per cent on-year rise in net profit to ₹2,555 crore for the July-September 2025 quarter (Q2FY26), on reduction in credit cost.

 

The Mumbai-based lender’s shares ended 1.67 per cent lower, closing at ₹123.30 per share on the BSE.

 

Its net interest income (NII) shrank by 1.24 per cent to ₹5,912 crore in Q2FY26, compared to ₹5,986 crore in the same quarter ended September 2024 (Q2FY25). Net interest margin (NIM) declined by 40 basis points year-on-year (Y-o-Y) to 2.41 per cent in Q2FY26 from 2.81 per cent a year ago.

 

R Karnatak, managing director and chief executive officer, BOI, said net profits improved due to decline in provisions for bad loans. The NII should begin to improve after the deposit repricing is complete in the second half. The transmission of repo rate cuts to customers is already through.

 

The bank’s non-interest income, comprising treasury, fees, commissions, etc., fell by 12 per cent Y-o-Y to ₹2,220 crore in Q2FY26.

 

Profit from treasury activities, including the sale and revaluation of investments, nosedived by 57 per cent to ₹314 crore in Q2FY26 from ₹730 crore a year ago. Bank does not see much treasury income in the third quarter, given the prevailing market conditions, Karnatak said in virtual media interaction after results.

 

The credit costs aka provisions for non-performing assets (NPAs) declined sharply to ₹472 crore in Q2FY26, down from ₹ 1,427 crore a year ago.

 

Advances grew 14.03 per cent Y-o-Y to ₹7.09 trillion in Q2FY26. Retail, agriculture, and MSME advances grew by 17.02 per cent Y-o-Y to ₹3.47 trillion in the September quarter of FY26.

 

Karnatak said the credit offtake including festive season is expected to be robust in the second half of the financial year. There is a sanctioned credit pipeline of ₹70,000 crore in corporate, retail, and agricultural loans.

 

Total deposits increased 10.08 per cent Y-o-Y to ₹8.53 trillion. The share of low-cost deposits-- current accounts and savings accounts (CASA)-- declined to 40 per cent at the end of September 2025, down from 41 per cent a year ago.

 

The bank’s asset quality improved, with gross NPAs declining to 2.54 per cent in September 2025 from 4.41 per cent in September 2024.

 

Net NPAs also declined to 0.65 per cent in September 2025 from 0.94 per cent in September 2024. The provision coverage ratio (PCR), including written-off accounts, improved to 93.39 per cent in September 2025 from 92.22 per cent a year ago.

 

The bank’s capital adequacy stood at 16.69 per cent, with Common Equity Tier-1 capital at 14.49 per cent at the end of September 2025.