Personal loan growth intentionally constrained
Personal loan book grew only 3% YoY as management imposed guardrails on low-ticket and non-salaried personal loans after observing industry stress. This limits growth from a high-yielding segment.
BANKINDIA / bear-case history
Track the concerns that keep returning.
Bank of India · risk themes across the available quarters.
Research layer active
Bear-case history
Risks carried through the record.
medium
Geopolitical exposure in chemical, ceramics, and trade finance sectors
Management explicitly identified chemical, ceramics, and import-export sectors (particularly oil/gas) as directly impacted by West Asia crisis, with increased working capital cycles. SMA numbers in these sectors require close monitoring.
CASA ratio declined 3 percentage points
CASA ratio declined 3% and retail term deposits also declined 3% as depositors shifted to mutual funds, equity, and insurance products. While cost optimization helped, the structural shift in deposit behavior could pressure margins if not fully offset.
PSU bank consolidation speculation deflected
On merger questions, management stated 'no comments, no discussion with us, only for the government to answer'—an evasive non-response that may leave investors uncertain about long-term strategic independence.
SMA-2 book doubled to ₹4,120 crore
SMA-2 (overdue 61-90 days) increased from ₹2,200 crore to ₹4,120 crore, largely from three state government accounts, though backed by guarantees.
CASA ratio declining structural pressure
CASA ratio fell from 41% to 38% YoY due to shift of deposits to alternative investments, increasing reliance on bulk deposits.
Yield on advances down 80 bps in 9 months
Yield on advances declined due to 125 bps repo rate cuts, with 64% of book linked to EBLR, pressuring NIMs.
ECL implementation impact on capital
Expected Credit Loss framework may impact CRAR by ~2% (₹9,200-9,400 crore), though spread over 5 years at 0.40% per annum.