CareEdge Ratings has reaffirmed the AA+ rating with a stable outlook for Bank of India’s Basel-III compliant Tier II Bonds and Long Term Infrastructure Bonds. The ratings factor in the bank’s established franchise, granular deposit base, comfortable capitalization supported by periodic capital infusions, diversified advances portfolio and improving financial performance. The rating agency expects some pressure on the bank’s net interest margin (NIM) in FY26.
Ratings Reaffirmed
CareEdge Ratings has reaffirmed the ratings for Bank of India’s (BOI) debt instruments, including Basel-III compliant Tier II Bonds and Long Term Infrastructure Bonds. The reaffirmation reflects BOI’s established market position and improving fundamentals.
Key Rating Drivers
The ratings are underpinned by several key factors:
- Established Franchise: BOI benefits from its pan-India branch network and a granular deposit base.
- Capitalization: The bank maintains comfortable capitalization levels, supported by regular capital infusions from the Government of India (GoI), which holds a majority stake (73.38% as of September 30, 2025).
- Diversified Advances: BOI has a diversified advances portfolio.
- Improving Financial Performance: The bank has demonstrated improvement in its financial performance over the recent years.
Potential Challenges
While the overall outlook is stable, CareEdge Ratings anticipates that BOI’s Net Interest Margin (NIM) could face some pressure in FY26, potentially impacting profitability in the near term. The bank’s ability to continue improving asset quality remains a key area of focus.
Rating Details
The following ratings have been reaffirmed:
- Infrastructure bonds: CARE AA+; Stable
- Tier-II bonds: CARE AA+; Stable
- Fixed deposit: CARE AA+; Stable
- Certificate of deposit: CARE A1+
Financial Highlights (as of September 30, 2025)
- Total income: ₹41,144 crore
- Profit after tax: ₹4,807 crore
- Gross NPA: 2.54%
- Net NPA: 0.65%
- Total capital adequacy ratio: 16.69%
Source: BSE
