Bank of India: Margins to Bottom Out in Q4, Focus on RAM Lending for Growth

• Bank of India expects net interest margins (NIMs) to bottom out in the March quarter (Q4FY26) and improve thereafter, assuming no further repo rate cuts.
• The bank maintained yield on advances by churning low-yielding corporate advances and reducing the cost of deposits, which fell to 4.77% by December.
• Bank of India is prioritizing Retail, MSME, and Agriculture (RAM) lending, targeting to increase its share of advances to 65% from the current 58% for better margins and diversification.
• Despite a slight rise in slippages due to one road asset, the bank expects fresh slippages in Q4 to be at the same level as Q3, with SMA book reduced to ₹5,500 crore.
• The bank aims for a recovery of ₹2,000 crore in Q4 and targets a Return on Assets (ROA) of 1% in the coming quarters, reaching 0.91-0.92% for FY26 and 1% for FY27.

Why It Matters: Bank of India anticipates margin improvement post-Q4, driven by strategic portfolio adjustments and RAM lending focus.