Indian Overseas Bank’s (IOB) standalone net profit for the quarter ended March rose 24% YoY to ₹808 crore due to increase in interest income and improvement in asset quality.
Interest income rose 28% to ₹6,629 crore. Net interest income increased to ₹2,763 crore from ₹2,276 crore. Net interest margin (NIM) grew to 3.53% from 3.20%.
“It is the highest net profit the bank has registered for Q4 and ₹2,656 crore for the full year,” MD & CEO Ajay Kumar Srivastava told the media.
Gross non-performing asset (NPA) declined by 434 bps to 3.10%, while that of net NPA declined by 126 bps to 0.57. Provision coverage ratio improved to 96.85% (92.63%). Capital adequacy ratio rose to 17.28% from 16.10%.
Total cash recovery for FY24 was ₹4,549 crore against ₹4,285 crore, while slippages were at ₹1,516 crore (₹4,029 crore). IOB plans to recover ₹5,500-6,000 crore during FY25 and maintain NIM in the range of 3.28-3.30%.
Total deposits of the bank stood at ₹2.86 lakh crore, of which CASA deposits accounted for ₹1.26 lakh crore and term deposits for the balance. Gross advances rose 15.9% to ₹2.19 lakh crore, of which Retail Agriculture and MSME (RAM) contributions to domestic advances was ₹1.46 lakh crore.
Mr. Srivastava said that the ratio between RAM and corporate sector advances were in the ratio of 73:27 and it would be altered to 60:40 in the next two to three years.
Asserting that they have pegged the credit growth target for FY25 at 13-14% and deposits at 11-12%, he said the bank would be focusing on renewable energy, solar, manufacturing sector and jewel loans among others.
On fund raising, he said that the lender would be raising about ₹5,000 crore in three or four tranches and through different instruments. The Government of India equity stake stood at 96% and would come down to 84-85%, following the fund raise.
To a question, Mr. Srivastava said: “IOB has posted steady performance in all the key parameters for the last 6-8 quarters. The trend is improving. Going forward, we don’t see any challenges to maintain this growth.”
During the current year, IOB plans to open 100 new branches.
