Bank of India reported a 36% rise in net profit to ₹3,068 crore for Q1 FY27, supported by higher interest and non-interest income. The bank aims to boost its foreign currency deposit base by $1.2 billion using RBI's swap window. Investors should note the slight decline in net interest margins despite overall earnings growth.
Detailed Coverage
Bank of India has reported a standalone net profit of ₹3,068 crore for the first quarter of fiscal year 2027, marking a 36% growth compared to the ₹2,252 crore reported in the same period last year. This performance was driven by healthy growth in core banking operations and higher non-interest income, which helped offset a sharp decline in treasury gains.
The bank’s net interest income, which reflects the difference between interest earned from loans and interest paid on deposits, grew by 13% to ₹6,833 crore. Additionally, other income sources—including fee-based earnings and recoveries from previously written-off accounts—showed strong momentum, rising 19% to ₹2,579 crore. Specifically, recoveries from written-off loans rose 89% to reach ₹609 crore, contributing significantly to the bottom line.
Asset Quality and Margin Trends
While the bank’s profit grew, its net interest margin, a key metric of profitability from lending, saw a slight compression to 2.52% from 2.55% in the year-ago quarter. This suggests that the cost of deposits may be rising slightly faster than the yield earned on advances. Provisions for non-performing assets remained largely stable with a modest 4% increase to ₹1,144 crore. A notable factor in the profit increase was a ₹181 crore write-back in provisions for standard assets, which provided a one-time boost to net earnings compared to the minimal ₹8 crore write-back in the previous year.
The bank has seen healthy expansion in its business scale, with global deposits rising 15% to reach ₹9,57,924 crore and global advances increasing 19% to ₹7,97,775 crore as of the end of June 2025. Management has signaled a focus on strengthening its foreign currency reserves, specifically targeting $1.2 billion in inflows through FCNR(B) deposits by utilizing the Reserve Bank of India’s limited-period concessional swap window. The bank has already secured $200 million of this target since early June.
Investors looking ahead should monitor whether the bank can maintain its credit growth momentum while managing potential pressure on net interest margins. The effectiveness of the FCNR(B) deposit strategy in managing liquidity and the sustainability of recoveries from written-off accounts will be important factors in the coming quarters.