Bank of India Assigned 'BBB' Long-Term and 'A-2' Short-Term Issuer Credit Ratings by S&P
S&P Global Ratings assigned Bank of India 'BBB' long-term and 'A-2' short-term issuer credit ratings with a stable outlook. The ratings reflect strong government support, adequate capitalization, solid funding, and healthy liquidity. The bank is expected to improve risk management and asset quality.
Credit ratings from a major agency like S&P have a significant impact on a bank's borrowing costs, investor confidence, and overall market perception, influencing its ability to raise capital and conduct business.
The assignment of 'BBB' long-term and 'A-2' short-term issuer credit ratings by S&P Global Ratings, along with a stable outlook, is a positive development for the bank, indicating financial strength and stability.
S&P Global Ratings has assigned 'BBB' long-term and 'A-2' short-term issuer credit ratings to Bank of India (BOI), with a stable outlook on the long-term rating. This rating reflects the very high likelihood of extraordinary support from the Government of India if needed, owing to the bank's very important role as a public sector bank and the government's majority ownership and control.
The ratings are underpinned by BOI's sufficient capitalization, solid funding, and healthy liquidity. The bank is expected to continue improving its risk management and asset quality over the next two years, with capitalization remaining adequate to support credit growth above the industry average. BOI's established reputation, solid deposit base, and ample liquidity contribute to its creditworthiness, although profitability and asset quality currently lag industry averages.
S&P anticipates that BOI's S&P Global Ratings-adjusted risk-adjusted capital (RAC) ratio will be between 7.0%-7.5% over the next two years. Credit costs are expected to remain below the industry average, though they could rise to approximately 0.6% in fiscal 2028 and 0.7% in fiscal 2029. New nonperforming loan formation is anticipated to hover around 1.0% over the next two years.
The bank's funding is strong, supported by stable and sticky deposits, with a CASA ratio of 37.0% as of June 2026. BOI also maintains an ample pool of liquid assets. The stable outlook reflects that on the sovereign, with expectations of continued improvement in risk management and capitalization.
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Bank of India filed this with the NSE as a statutory disclosure, categorised under other regulatory filings. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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