India Ratings has affirmed Bank of India’s ‘IND AA+’ rating with a stable outlook for its infrastructure and Tier 2 bonds. This reflects the bank’s systemic importance, improving capital position, and operating buffers. The ratings agency has withdrawn the issuer rating and AT1 bonds. The affirmation is based on the bank’s ability to maintain its market share and improve its financial performance. The key rating drivers include continued government support and adequate capitalization.
Rating Affirmation
India Ratings and Research (Ind-Ra) has affirmed the ratings for Bank of India’s infrastructure and Tier II bonds at ‘IND AA+’/Stable. The agency also withdrew the issuer rating and additional tier 1 (AT1) bonds.
Key Rating Drivers
The ratings affirmation reflects Bank of India’s systemic importance, driven by an increase in its market share in net advances and a stable market share in deposits. As of end-December 2025, the Government of India (GoI) held a 73.38% stake in the bank. The ratings also consider the bank’s improving capital position and operating buffers, enhancing its ability to absorb potential credit cost increases.
Financial Performance and Outlook
Bank of India’s capital position remains strong, with a common equity tier-1 ratio of 13.76% in Q3FY26. The bank achieved a return on assets of 0.96% in Q3FY26. The bank’s gross NPA ratio decreased to 2.26% in Q3FY26, and the net NPA ratio reduced to 0.6%. Ind-Ra anticipates that the bank’s asset quality will continue to improve. The bank reported a net profit of INR326 billion during FY21-Q3FY26.
Liquidity and Deposit Profile
The bank maintains adequate liquidity, with a short-term asset-liability mismatch covered by an excess statutory liquidity ratio of INR47 billion as of Q2FYE26. The end period liquidity coverage ratio was 109% as of September 30, 2025. However, Bank of India’s low-cost current account and savings account (CASA) deposits stood at 32.6% as of Q3FYE26, which is below peer median levels.
Source: BSE
