Mumbai: India Ratings and Research (Ind-Ra) has reaffirmed Bank of India’s (BoI) Basel III-compliant Tier II bonds and long-term infrastructure bonds at ‘IND AA+’ with a stable outlook, reflecting the bank’s strong capital position, improving asset quality, and continued government support. Simultaneously, Ind-Ra has withdrawn BoI’s issuer rating and Basel III Additional Tier I (AT1) bonds in line with its withdrawal policy.
Ratings Reaffirmation Driven by Systemic Importance and Strong Capital
India Ratings cited BoI’s systemic importance as the sixth-largest public sector bank in India, serving both domestic and international clients through 5,447 domestic and 22 overseas branches. The bank’s capital adequacy remains robust, with a Common Equity Tier-1 (CET1) ratio of 13.76% and an overall Capital Adequacy Ratio (CAR) of 17.09%, providing sufficient buffers to absorb potential credit shocks.
The bank’s asset quality continues to improve, with gross and net non-performing assets (NPAs) declining to 2.26% and 0.6% respectively, supported by recoveries, write-offs, and a provision coverage of 73.9%. Profitability metrics remain healthy, with an annualized return on assets (RoA) of 0.96% for Q3FY26.
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Bond-Specific Details
- Infrastructure Bonds: INR 150 billion rated ‘IND AA+’/Stable
- Basel III Tier II Bonds: INR 25 billion rated ‘IND AA+’/Stable
- Basel III AT1 Bonds: INR 25 billion withdrawn
Ind-Ra noted that BoI’s deposit growth has lagged behind credit growth, resulting in a loan-to-deposit ratio of 82%. Maintaining deposit momentum will be crucial for sustaining future performance.
Analyst Insights
Vivek Singh, Analyst at India Ratings, commented, “The ratings reaffirmation underscores BoI’s improving financial metrics, systemic importance, and adequate capital buffers. Continued government support and disciplined risk management remain key drivers for the bank’s credit profile.”
The agency expects BoI to sustain its growth trajectory in the near to medium term, supported by strong capitalization, prudent credit cost management, and ongoing improvements in asset quality.
About Bank of India
Bank of India is a leading Indian public sector bank, with a significant presence in retail and corporate banking. Operating through over 5,300 domestic branches and 22 international offices, BoI focuses on sustainable growth, asset quality improvement, and leveraging government support to strengthen its financial position.
