Indian Bank vs Bank of India (2026): ROA, NIM, NPAs, Growth & Which Is Better?

Indian Bank vs Bank of India: Q1 FY2027 scoreboard

Indian Bank has moved beyond the basic PSU-bank turnaround milestone

For many public-sector banks, the first target after the NPA crisis was simply:

• Get GNPA down.
• Stop losing money.
• Rebuild capital.
• Return ROA toward 1%.

Indian Bank is already at 1.31% ROA and nearly 19.5% ROE.

Its problem is no longer proving the balance sheet survived.

Its problem is proving those returns deserve to persist at a higher valuation.

Bank of India has only recently crossed the 1% ROA threshold

That itself is an important achievement.

ROA improved approximately 19 basis points year on year to 1.01%.

If Bank of India can sustain 1%+ and move toward 1.2%, the valuation mathematics change quickly because the stock still trades below book.

This is the central BOI rerating thesis.

Premium test #2: Indian Bank's 77-basis-point NIM advantage is enormous

Indian Bank global NIM: 3.29%.

Bank of India global NIM: 2.52%.

The difference is approximately 77 basis points.

That is one of the largest economic gaps in the entire comparison.

Both are government-owned banks.

Both compete for similar deposits.

Both lend to retail, MSME, agriculture and corporates.

Indian Bank currently extracts substantially more spread from its balance sheet.

Why does Indian Bank have the wider margin?

Several factors work together:

• Higher CASA.
• Granular RAM lending.
• Asset pricing.
• Lower funding cost.
• A disciplined loan mix.

Domestic CASA is 39.73%.

Cost of deposits fell to approximately 4.80%.

Domestic NIM improved to 3.41%.

The liability franchise is not merely large—it is productive.

Bank of India's NIM is the main weakness in an otherwise strong quarter

Global NIM was approximately 2.52%, slightly below the prior-year level.

This occurred even while:

• Advances grew almost 19%.
• Credit cost fell.
• Asset quality improved.
• Operating profit rose 26%.

The implication is important.

Bank of India is creating profit partly through scale, non-interest income, lower provisions and improved efficiency rather than a superior spread.

That can still be an excellent model if funding cost improves

Bank of India does not need Indian Bank's 3.3% NIM to rerate.

If NIM merely moves toward the 2.55%-2.60% range while advances grow mid-teens and credit cost remains controlled, earnings can continue expanding.

The valuation does not price in perfection.

Premium test #3 produces a surprising draw on gross NPA

Indian Bank GNPA:

1.86%.

Bank of India:

1.81%.

Bank of India is actually five basis points lower.

This matters because it prevents a lazy conclusion that Indian Bank simply has a much cleaner gross loan book.

It does not.

The real asset-quality difference appears after provisions

Indian Bank NNPA is only 0.15%.

Bank of India is at 0.51%.

Indian Bank provision coverage is 98.22%.

Bank of India is 93.83%.

Indian Bank therefore has more aggressively absorbed recognised credit risk through provisions and write-offs.

0.15% NNPA is close to a fully provisioned recognised-stress book

It does not mean Indian Bank has no credit risk.

Future slippages can always emerge.

It means very little of the already-recognised bad-loan stock remains exposed on a net basis.

This makes future profit less vulnerable to old legacy NPAs.

This is exactly why investors should separate stock and flow

Stock: how many bad loans already exist?

Flow: how quickly are new bad loans entering the system?

Indian Bank has the cleaner residual stock.

Bank of India currently has the lower fresh-slippage and credit-cost flow.

Both are positive, just in different ways.

Premium test #4: Indian Bank operates more efficiently

Cost-to-income is 44.80% versus Bank of India at 46.33%.

The difference is not massive.

But Indian Bank also starts with a much wider NIM.

That means more operating revenue survives both the interest spread and expense layers before provisions.

Indian Bank's efficiency improved year on year

Cost-to-income fell by nearly one percentage point.

Operating profit increased 16.5%.

NII increased 16.9%.

Those numbers show revenue is expanding faster than the cost base.

That is the operating leverage investors want from a mature PSU bank.

Bank of India's efficiency improvement is more dramatic

Cost-to-income fell sharply to 46.33%.

Operating profit increased almost 26%.

Non-interest income increased 19%.

Recoveries from written-off accounts also contributed.

This is one reason Bank of India can generate 36% PAT growth despite only a 2.52% NIM.

Premium test #5 is where Bank of India wins: growth

Advances +18.64% versus Indian Bank +13.89%.

Deposits +14.90% versus Indian Bank +13.47%.

Bank of India is currently expanding faster on both sides of the balance sheet.

This is the strongest challenge to Indian Bank's valuation premium.

Bank of India's loan growth is also broad

RAM advances increased approximately 19.75%.

Within that:

• Retail +20.60%.
• MSME +19.34%.
• Agriculture +18.92%.
• Corporate +18.44%.

This is not a one-segment growth spike.

Growth near 19% can transform a sub-book-value bank—or destroy the thesis

At 0.79x book, fast clean growth is powerful.

Book value compounds.

Profit compounds.

The market can simultaneously expand the multiple.

That creates three engines of shareholder return.

But if rapid lending eventually produces higher NPAs, the exact opposite occurs.

Indian Bank is deliberately growing at a more moderate pace

Total advances increased approximately 13.89%.

RAM remains about two-thirds of domestic advances.

Retail grew 18.74%.

MSME grew 17.03%.

Agriculture grew 9.96%.

Corporate credit increased around 11.5%.

This is still healthy growth—it is simply less aggressive than Bank of India's.

Indian Bank's retail mix contains an interesting risk-control signal

Personal loans declined while secured categories expanded.

Auto loans grew more than 32%.

Housing and mortgage loans grew double digits.

Jewel lending expanded rapidly.

Personal loans contracted.

This suggests growth is not being generated by indiscriminate unsecured expansion.

Indian Bank is also expanding infrastructure exposure

Infrastructure credit grew strongly, including newer areas such as data-centre financing.

This provides exposure to India's capex cycle.

It also changes the risk profile.

Large infrastructure loans can be high-quality when project economics are robust, but they create longer-duration and concentration risks that retail lending does not.

Capital strength produces another split verdict

Bank of India total CRAR: 18.69%.

Indian Bank: 17.58%.

Bank of India wins on total regulatory capital.

But Indian Bank CET1 is slightly higher:

16.51% versus Bank of India at 15.97%.

CET1 is the highest-quality common-equity layer.

Neither bank currently looks capital constrained

Both can fund meaningful asset growth through retained earnings if present profitability persists.

The question is not whether either bank meets regulatory minimums.

It is whether high credit growth consumes capital faster than earnings replenish it.

What does the Bank of India buyer receive for accepting lower quality?

• Almost 19% loan growth.
• Nearly 15% deposit growth.
• 36% PAT growth.
• Lower current slippage ratio.
• Lower credit cost.
• Higher total capital ratio.
• A stock below book value.
• A P/E of only about 5.55x.

That is not a distressed-bank valuation attached to distressed-bank operating metrics.

The valuation gap is larger than the profitability gap

Indian Bank ROE is roughly 21% higher than Bank of India's on a relative basis.

Its P/B multiple is almost 100% higher.

This does not automatically make Indian Bank expensive.

It means the market has already capitalised much more of its quality.

What would justify Indian Bank moving above today's valuation?

The bank would need to preserve:

• ROA around 1.3% or higher.
• ROE near 19%-20%.
• NIM above 3.2% globally.
• NNPA around 0.15%-0.20%.
• Cost-to-income around 45%.
• Double-digit advances growth.

If those metrics endure through the next credit cycle, the premium looks fundamentally earned rather than speculative.

Indian Bank's own guidance suggests some normalisation

Management guidance points toward:

• Advances growth around 11%-13%.
• Deposits around 9%-11%.
• NIM around 3.10%-3.25%.
• ROA around 1.20%-1.30%.
• Cost-to-income near 45%.

Current Q1 metrics are therefore slightly stronger than portions of full-year guidance.

Investors should not simply annualise the best quarter.

What would justify a major Bank of India rerating?

BOI does not need to catch Indian Bank on every metric.

A credible rerating could occur if:

• ROA stays above 1% and moves toward 1.1%-1.2%.
• ROE stays mid-teens.
• NIM improves toward 2.6%.
• Credit growth remains around 15%-16%.
• GNPA remains below 2%.
• Credit cost remains controlled.

A bank earning acceptable returns does not necessarily deserve to remain permanently at 0.8x book.

The strongest Bank of India argument is multiple expansion plus book growth

If book value grows because profits are retained and P/B moves from 0.79x toward 1x, shareholders benefit from both:

higher underlying book value

and

a higher price paid for that book.

This is the classic repaired-bank rerating model.

The strongest Indian Bank argument is compounding without needing a rerating

Indian Bank does not require its P/B to rise dramatically if:

• Book value compounds quickly.
• ROE remains near 20%.
• Credit losses stay low.
• The market continues assigning a premium multiple.

That is a quality-compounder model rather than a turnaround model.

The Bull Run market snapshot shows the market already distinguishes the two stories

Indian Bank was already close to the conventional RSI overbought threshold in Bull Run's August 25 snapshot.

That does not make the stock expensive by itself.

It does show stronger recent market recognition of the quality story.

Indian Bank vs Bank of India FAQs

Which bank is larger?

Bank of India currently has the larger global deposit and advance base.

Which is growing loans faster?

Bank of India, at approximately 18.64% versus Indian Bank at 13.89%.

Which has higher NIM?

Indian Bank by a wide margin, with 3.29% global NIM versus Bank of India at 2.52%.

Which has better CASA?

Indian Bank, with domestic CASA around 39.73% versus Bank of India at 36.68%.

Which has better gross NPA?

Bank of India is marginally lower at 1.81% versus Indian Bank at 1.86%.

Which has lower net NPA?

Indian Bank by a substantial margin, at 0.15% versus Bank of India at 0.51%.

Which has higher ROA?

Indian Bank at 1.31% versus Bank of India at 1.01%.

Which has higher ROE?

Indian Bank at 19.48% versus Bank of India at 16.12%.

Which has lower credit cost?

Bank of India at approximately 0.15% versus Indian Bank at 0.23%.

Which stock is cheaper?

Bank of India on both late-August P/E and P/B.

Where can investors compare them on Bull Run?

Use the Indian Bank stock page, Bank of India stock page and Public Sector Bank sector page.

Research sources

• Bull Run — Indian Bank
• Bull Run — Bank of India
• Bull Run — Public Sector Bank sector research
• Indian Bank official Q1 FY2027 financial results
• Indian Bank official investor presentations
• Bank of India official financial results
• Bank of India investor relations