From mint · Samriddhi Mahar · · 1m 10s
Bank of India forecasts NIM rise to 2.55% in H2 FY27 post RBI rate hike
Bank of India predicts net interest margin will climb to 2.55% in second half of FY27 after RBI rate hike.
In brief
Bank of India predicts net interest margin will climb to 2.55% in second half of FY27 after RBI rate hike. Bank of India expects its net interest margin to rise to 2.55% in H2 FY27 due to faster loan repricing following RBI's 25-basis-point rate hike. Originally reported by mint.
Bank of India NIM forecast
Bank of India expects net interest margin to rise to 2.55% in H2 FY27 after RBI rate hike.
“Bank of India expects margins to improve in H2 FY27 as faster loan repricing offsets slower deposit-cost increases, while strong FCNR(B) inflows boost liquidity but weigh on near-term NIMs.”
NIM definition
NIM measures the difference between interest earned on loans and what banks pay on deposits.
RBI rate hike impact
66% of Bank of India's advances linked to external benchmarks allow immediate rate pass-through.
Deposit repricing
Deposit rates reprice slowly with 60% of term deposits in 12-18 month maturity buckets.
FCNR(B) deposits
Bank mobilised $2.2 billion in FCNR(B) deposits, equivalent to ₹21,000-22,000 crore.
FCNR(B) leverage
80-90% of FCNR(B) deposits came through leveraged route with up to 9x leverage.
NIM performance
Global NIM stood at 2.47% in September quarter, up from 2.41% a year earlier.
The takeaway
Bank of India expects its net interest margin to rise to 2.55% in H2 FY27 due to faster loan repricing following RBI's 25-basis-point rate hike.
