 "Indian Overseas Bank's Q3 net profit more than doubles to Rs 454 cr")
State-owned Indian Overseas Bank (IOB) on Wednesday reported a 113 per cent jump in its standalone profit after tax (PAT) to Rs 454 crore in the quarter ended December 2021, helped by lower provisions and higher cash recovery.
Its standalone PAT stood at Rs 213 crore in the corresponding quarter last year.
"The profit in the quarter was driven by lower provisioning requirements, improvement in cash recovery and also as we were able to contain our operational cost," the bank's Managing Director and CEO Partha Pratim Sengupta told reporters.
The bank, which came out of the Reserve Bank of India's (RBI) prompt corrective action (PCA) framework in September 2021, is aiming the net profit to touch around Rs 1,600 crore in the current financial year.
Interest income marginally declined to Rs 4,198 crore during the quarter ended December 31, 2021, compared with Rs 4,244 crore last year. Sengupta said lower treasury income due to the hardening of yields impacted the interest income.
Net interest margin (NIM) declined to 2.40 per cent from 2.45 per cent in the year-ago period.
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Its gross non-performing assets (GNPAs) reduced to 10.45 per cent, against 12.19 per cent a year ago.
Net NPA came down to 2.63 per cent from 3.13 per cent.
Sengupta said slippages in the quarter stood at Rs 1,254 crore. Of this, Rs 650 crore was on account of divergences in NPA classification pointed out by the RBI. The divergences were mainly in education and agriculture loans of the lender, he said.
Provisions fell to Rs 1,073 crore from Rs 1,518 crore in the year-ago period. The provision coverage ratio (PCR) improved to 92.33 per cent as against 91.91 per cent.
The total cash recovery stood at Rs 1,199.51 crore. This includes recovery of Rs 247.37 crore from technically written-off accounts and sale to asset reconstruction companies (ARC) of Rs 241.46 crore and security receipts.
The lender has identified three stressed accounts worth Rs 1,800 crore to be transferred to National Asset Reconstruction Company Ltd (NARCL).
Its COVID-19 restructured book stood at Rs 5,500 crore.
The bank's capital adequacy ratio (CRAR) stood at 15.41 per cent.
Sengupta said the bank plans to raise Rs 1,000 crore through tier-II bonds in this quarter.
Total deposits increased by 5.55 per cent to Rs 247,118 crore and gross advances grew by 7.89 per cent to Rs 1,48,316 crore.
The bank's shares on Wednesday closed at Rs 21.65 apiece, a jump of 4.09 per cent on the BSE.
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