Indian Overseas Bank reports net profit of Rs 148 cr

Chennai-based public sector lender Indian Overseas Bank (IOB) on Friday reported a net profit of Rs 148 crore for the second quarter of the current financial year. It had posted a Rs 2,254-crore net loss in the corresponding quarter of the previous fiscal. Total income stood at Rs 5,430 crore, against Rs 5,024 crore, registering a growth of 8%.

Speaking to mediapersons through a virtual press conference, Partha Pratim Sengupta, MD & CEO, said the bank has made profit for three quarters in a row, riding on good recovery and decreased bad loans, resulting in lower provisioning.

“The bank has made marked improvement on all parameters, resulting in clocking profit of Rs 148 crore. We have made exit from stressed sectors and corporate pie had been reduced to negligible portion of the loan book, as it continues to focus on retail, agri and MSME (RAM) sectors. As of now, our RAM share constitutes around 74% of loan book, and going forward, we will ideally have 80% RAM and 20% corporate split,” he said.

The net interest margin stood at 2.18%, against 1.86% in the corresponding quarter last fiscal, while interest income stood at Rs 4,363 crore, compared with Rs 4,276 crore.

Sengupta said IOB will approach the regulator for bringing the bank out of the prompt corrective action (PCA) framework after evaluating the Covid-19 impact on its balance sheet. “We had held internal discussions on this, and we want to wait till March before approaching the RBI for revoking the PCA. We want to evaluate the Covid-19 impact and proceed further. Till then, our focus will be on strengthening the balance sheet.”

The gross NPA got reduced to 13.04%, compared to 20%, while net NPA stood at 4.3%, compared with 9.84%. IOB’s provision coverage ratio improved to 89.36%, against 75.85%.

CASA of the bank improved to 40.26%, against 38.067%. Gross advances stood at Rs 1,35,469 crore, compared with Rs 1,43,350 crore as on September 30, 2019.