Indian Overseas Bank Q3 profit at Rs 213 cr vs Rs 6,075 cr year-ago loss

Lender has said that it plans to come out of Prompt Corrective Action by focusing on recovery, low cost deposits and less capital consuming advances

Indian Overseas Bank (IOB) on Tuesday reported a profit of Rs 213 crore during the quarter December 2020 compared to Rs 6,075 crore in loss a year ago, as its management refused to comment if the state-owned lender was "on the block" for disinvestment.

Operating profit rose to Rs 1,731 crore from Rs 762 crore a year ago, helping plans to come out of the central bank’s Prompt Corrective Action (PCA) by focusing on recovery, low cost deposits and less capital consuming advances.

"We cannot comment as we are not aware on whether we are on the block or not," said Partha Pratim Sengupta, MD & CEO, adding "it's a matter of time to come out from the PCA."

Sengupta said the government infusing Rs 8,217 crore in the last fiscal had helped his bank to strengthen business. IOB has reduced its exposure to corporates to focus on Retail, Agriculture, MSME (RAM), which now account to around 76 per cent of its loan book.

Around Rs 3,000 crore or 2.5 per cent of the bank’s assets could be restructured, he said. Around Rs 18,000 crore worth of NPAs are waiting for resolution before National Company Law Tribunal (NCLT.)

Gross non-performing assets (NPA) dropped to Rs 16,753 crore during the quarter ended December 2020 from Rs 23,734 crore, a year ago. Net NPA dropped to Rs 3,905 crore from Rs 7,087 crore, a year ago. Gross NPA ratio 12.19 per cent per cent during the quarter ended December 2020 stood at Rs 16,753 crore as compared to Rs 23,734 crore or 17.12 per cent, a year ago. Net NPA ratio 3.13 per cent from 5.81 per cent.

Net NPA has improved to 3.13 per cent--lower than the 6 per cent limit prescribed by the Reserve Bank of India. Provision Coverage Ratio improved to 91.91 per cent.

Bank holds total provision of Rs 924 crore, which includes Covid-19 provision of Rs 683 crore and for adherence to Supreme Court order Rs 241 crore.

CASA of the Bank improved to 40.93 per cent as on December 31, 2020 as against 39.10 per cent as on December 31, 2019. Total CASA has increased from Rs 86,530 crore as on December, 31, 2019 to Rs 95,830 crore as on December 31, 2020.