Bank of India sees loan growth topping 13% target on strong retail, MSME momentum

Bank of India expects its loan growth to exceed its current guidance of 12–13%, with strong traction across retail, agriculture, and MSME segments, according to Rajneesh Karnatak, MD & CEO of the bank.

“So loan growth has been 14% on a global basis, and on the domestic side, it is much better,” Karnatak said. He added that agriculture grew 13%, MSME 16%, and retail 19%, leading to an overall 17% rise in the RAM segment year-on-year. “Even corporate credit has grown in double digits at around 10%,” he said. “So when we are saying the guidance of around 12–13%, yes, the guidance is conservative, and we are fully confident that we’ll be surpassing this.”

He noted that the guidance factors in geopolitical concerns such as ongoing wars and tariff issues, but said the bank remains confident about maintaining growth momentum.

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On profitability, Karnatak said the global NIM stood at 2.55%, while domestic NIMs were stronger at around 2.86%. He expects improvement from the third quarter as repricing benefits flow through. “We should see a better uptick in net interest income from Q4,” he said. The bank’s NIM guidance for FY26 is around 2.6%, assuming no further rate cuts by the Reserve Bank of India.

“If the rate cut does happen, it will impact the net interest income for all banks,” he added, noting that 63% of Bank of India’s book is linked to the repo rate.

He added that SMA accounts above ₹5 crore have also declined, from ₹8,000 crore in Q1 to ₹6,000 crore in Q2, now forming below 1% of the total standard loan book. The bank’s credit cost fell to 0.28% in Q2, compared with 0.55% in Q1, driven by lower slippages.

Bank of India, with a market capitalisation of ₹58,979.81 crore, has seen its shares gain over 24% in the past year.

For the full interview, watch the accompanying video

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