Care Ratings has reaffirmed Bank of India’s (BOI) AA+ rating with a stable outlook for its Tier II bonds, infrastructure bonds, and fixed deposits. The ratings factor in BOI’s established franchise, granular deposit base, comfortable capitalization, diversified advances portfolio, and improved financial performance. The Government of India’s majority stake (73.38% as of September 30, 2025) and expected support are also key factors.
Rating Reaffirmation by Care Ratings
Care Ratings has reaffirmed the AA+ rating with a stable outlook for several debt instruments of Bank of India (BOI). This includes Tier II bonds and infrastructure bonds, reflecting the agency’s confidence in the bank’s financial stability and operational performance. This decision was disclosed on November 13, 2025.
Key Rating Drivers
The ratings assigned to BOI’s debt instruments are supported by the bank’s strong pan-India branch network, which contributes to a diverse deposit base. The bank’s capital position is considered comfortable due to regular capital infusions. The rating also takes into account the backing of the Government of India, which held a 73.38% stake in the bank as of September 30, 2025.
Asset Quality and Profitability
While the bank’s asset quality is improving, it is still relatively weaker than its peers. Gross non-performing assets (GNPA) ratio stood at 3.27% and net non-performing assets (NNPA) ratio at 0.82% as of March 31, 2025. However, improvement in asset quality parameters is expected. The bank’s net interest margin (NIM) may face some pressure in FY26 due to faster repricing of advances.
Financial Performance Highlights
The bank reported a profit after tax (PAT) of ₹9,219 crore for FY25, compared to ₹6,318 crore for FY24. The return on total assets (ROTA) was 0.95% for FY25 against 0.74% for FY24. In H1FY26, BOI reported a PAT of ₹4,807 crore.
Rating Sensitivities
Positive rating triggers include improvement in profitability with ROTA remaining above 0.8% on a sustained basis and sustained improvement in asset quality parameters. Negative triggers include a fall in profitability with ROTA remaining below 0.30%, decline in capitalization levels, and sustained deterioration in asset quality.
Details of Rated Instruments
Tier-II Bonds: CARE AA+; Stable has been assigned to bonds worth ₹2,500 crore.
Infrastructure Bonds: CARE AA+; Stable has been reaffirmed for bonds worth ₹5,000 crore.
Fixed Deposit: CARE AA+; Stable has been reaffirmed.
Source: BSE