Chennai-based public sector lender Indian Overseas Bank (IOB) on Saturday reported a 20% increase in its net profit at Rs 392 crore for the first quarter of FY 23 as against Rs 327 crore in the corresponding quarter of last fiscal. The income of the bank stood slightly lower at Rs 5,028 crore as compared to Rs 5, 155 crore. The bank is looking to raise around Rs 1,000 crore capital from the market this year through QIP, for which talks have been initiated with the investors.
Partha Pratim Sengupta. MD and CEO of IOB, told media persons that the bank has been making all round improvements on all parameters every quarter since it had come out of prompt corrective action (PCA) in September 2021.
“During the quarter gross NPA (GNPA) was reduced by Rs 1,006 crore. GNPA ratios improved to 9.03 % from 9.82%, q-o-q. The net NPA was at Rs 3,698 crore with ratio of 2.43 % as against Rs 3,998 crore with ratio of 3.15% reducing it by Rs 300 crore in absolute terms,” he said. Provision coverage ratio has improved to 91.86 % as against 91.56%.
Interest income stood at Rs 4,435 crore for the quarter as against Rs 4,063 crore. Non-interest income was at ?593 crore as against Rs 1,092 crore due to increase in other income. Net interest margin (NIM) stood at 2.53%.
He said the bank is expecting to improve the NIM beyond 2.6% and for that containing the slippage will be the priority. The bank is also looking to compensate the treasury business losses by increasing the fee income pie.
CASA of the bank improved to 43.07 % as against 41.63%. Total CASA has increased from Rs 1,01,129 crore to Rs 1,12,012 crore.
Sengupta said the bank is on course on its recovery plans. “As a thumb rule, we are looking at recovering Rs 1,000 crore every quarter and this quarter was no exception where we ended up with a cash recovery of Rs 1,048 crore. The NCLT recovery is happening in bits and NARCL has admitted three accounts. In NCLT , we have a total cases of 221 aggregating to Rs 18,773 crore,” he said.
On the fund raising, he said the Rs 1,000 crore capital would be sufficient for the bank for its advances growth plan. It will look to lend to retail, agri, MSME and corporate customers, evenly. “So, we may have each segment accounting for around 20 to 25%. There will be demand from corporate sector, especially road sector and we will go for rated accounts,” he said.
The bank has evolved a policy of not taking fresh exposures in stressed sectors, below hurdle rated accounts and BB and below rated accounts. The bank has also exited from accounts in the stressed sectors due to improve the quality of assets.
Total business increased to Rs 4,23,589 crore against Rs 3,81,885 crores. Total deposits increased to Rs 2,60,045 crore as against Rs 2,42,941 crore. Gross advances increased to Rs 1, 63,544 crore as against Rs 1,38,944.