Bank of India Share Price

Bank of India Limited fundamental analysis of banking company

In this article, we will examine Bank of India Limited fundamentally to understand its business model and industry and determine if it is a good investment fit for you.

Bank of India Limited

Bank of India (BoI) is a leading Indian public sector bank with its headquarters in Bandra Kurla Complex, Mumbai. Founded on September 7, 1906, it has been government-owned since its nationalisation in 1969. The bank operates over 5,100 branches across all states and union territories in India, including specialised branches. These branches are managed through 69 Zonal Offices and 13 FGMO Offices.

BoI offers a wide range of products and services, including retail banking, corporate banking, investment banking, mortgage loans, private banking, wealth management, asset management, investment management, risk management, mutual funds, exchange-traded funds, index funds, and credit cards.

As of December 2023, Bank of India operates 5,139 branches and 8,166 ATMs & CRMs around the world, including 22 overseas branches.

Is the banking sector a goldmine investment?

India’s banking sector is turning around and carefully looking forward to a good prospect within the year 2024. This will affect deposits positively due to steady interest rates, and manageable inflations as well as GDP that remains strong. There has been an impressive transformation in this industry, with non-performing loans dropping, better capital adequacy ratios, and improved profitability.

Profit of the Indian banking sector increased in 2023, witnessing an aggregate increase of 38.4%, with public sector banks leading the charge by nearly tripling their net profits. Non-performing assets reached multi-decade lows of 3.9% (Gross NPAs) and 0.78% (Net NPAs) by the year-end. This significant improvement underscores the sector’s focused efforts in risk management and debt recovery.

In light of these factors, Bank of India Limited appears to be a promising choice for investment. The bank has shown resilience and growth, and its stock has received positive analysis and opinions. Therefore, investing in Bank of India Limited could be a strategic move for those looking to tap into the potential of India’s growing banking sector.

Who are Bank of India’s competitors in the banking sector?

Bank of India operates in a highly competitive environment. Some of its main competitors in the banking sector include:

• State Bank of India (SBI)
• Canara Bank
• Axis Bank
• Bank of Baroda (BOB)
• Dhanlaxmi Bank
• Bank of Maharashtra
• IDBI Bank Ltd.
• Indian Bank

History of Bank of India Ltd.

Here’s a brief history of Bank of India Limited:

• Incorporation: Bank of India was founded on 7th September 1906 by a group of eminent businessmen from Mumbai, Maharashtra, India. The Bank was under private ownership and control until 19th July 1969 when it was nationalised along with 13 other banks.
• Product range: Bank of India provides a wide range of financial products. These include retail banking, corporate banking, investment banking, mortgage loans, private banking, wealth management, asset management, investment management, risk management, mutual funds, exchange-traded funds, index funds, credit cards, and insurance.
• Infrastructure: As of December 2023, Bank of India has over 5,139 branches and 8,166 ATMs & CRMs around the world, including 22 overseas branches. These branches are managed through 54 zonal offices.
• Certifications: While specific certifications for Bank of India are not mentioned in the search results, banks in India are regulated by the Reserve Bank of India (RBI) and need to comply with various regulatory requirements.
• Awards and recognition: Bank of India has received several awards and accolades. Some of them include the “National Award for Outstanding Performance in SHG Bank linkage by DAY NRLM MoRD” for FY21-22, “Rajbhasha Kirti Puraskar-3rd prize” by MoHA-GOI for FY21-22, and recognition as the “3rd best-performing bank in Agriculture Infrastructure Fund Scheme” under Atma Nirbhar Scheme, a flagship program of GOI.

Company Profile of Bank of India Ltd.

Pros:

• Profitability: The bank’s net profits for Q4 FY24 stood at Rs.1439 Cr, up by 7% YoY while FY24 net profit was Rs. 6318 cr, up by 57% on a YOY basis.
• Dividend Payout: The bank has recommended a dividend of INR 2.80 (that is 28%) per equity share for the fiscal year 2023-2024. This could be a source of regular income for shareholders.
• Recovery of Dues: The bank has been able to recover dues from defaulters, as seen in the case where a UK Court asked Nirav Modi to pay Bank of India $8 million.

Cons:

• Poor Sales Growth: The company has delivered a poor sales growth of 8.29% over the past five years. This could indicate a lack of growth opportunities or poor management performance.
• Low Return on Equity: The company has a low return on equity of 7.59% over the last 3 years. This could suggest that the company is not using its shareholders’ investments effectively.
• Decline in Non-Interest Income: In Q4FY24, non-interest income was Rs. 1,751 Cr, compared to Rs. 3,099 Cr in Q4FY23. A decline in non-interest income can affect the bank’s profitability.

The Finances

Here’s a summary of Bank of India Limited’s financial information as of June 2024:

Shareholding pattern of Bank of India Ltd.

Here’s a concise summary of Bank of India Limited’s shareholding pattern as of June 2024 :

• Promoters: Hold 73.4%
• Foreign Institutional Investors (FII): 4.5%
• Domestic Institutional Investors (DII): 15.8%
• Public: 6.3%

Peer multiple comparison

Let’s compare Bank of Limited with its peers that have complete data available. Here’s a concise table: