 "Vacuum at top in IOB")
Chennai-based public sector lender Indian Overseas Bank (IOB) has remained headless in the absence of a full-time chief executive for almost two months now.
R Koteeswaran had retired as managing director (MD) and chief executive officer (CEO) at the end of June 2016. He had joined Indian Overseas Bank on December 31, 2014. Prior to this assignment, Koteeswaran was executive director at Bank of India.
Pawan Kumar Bajaj, another executive director, has moved to Kolkata-based United Bank of India as managing director and chief executive.
Vibha Batra, former co-head for financial ratings at ICRA, said: “This is the last thing one should expect for the bank, which is passing through a bad phase. It is matter of serious concern.”
While Banks Board Bureau has recommended names for the post of MD & CEO, the government has cleared names for two banks - United Bank of India and Bank of Maharashtra. The government, which holds a 73.58 per cent stake in the bank, is yet to announce a new MD & CEO for IOB, which is reeling under losses and bad loans.
The bank reported a net loss of Rs 1,450.5 crore in the quarter ended June 2016, compared to a net profit of Rs 14.76 crore a year ago.
IOB’s gross non-performing assets (NPAs) stood at Rs 33,913.15 crore as on June 30, 2016 against Rs 16,451.2 crore as on March 31, 2016 and Rs 30,048.63 crore as on June 30, 2015.
The ratio of gross non-performing assets to gross advances stood at 20.48 per cent as on June 30, 2016 against 9.4 per cent as on March 31, 2016 and 17.4 per cent as on June 30, 2015.
The bank’s provisions and contingencies (excluding tax provisions) rose 222.17 per cent to Rs 2,137.81 crore in the June 2016 quarter over June 2015 quarter. The provision coverage ratio of the bank was at 47.61 per cent as on June 30, 2016.
The bank expects further equity infusion of Rs 3,101 crore from the government in the current year. Timely equity support from the government continues to be the key driver for the bank’s credit profile. The rating is constrained by the deterioration in the lender’s key asset quality indicators over the recent past, which adversely impacted its solvency and capitalisation profile, ICRA said.
R Koteeswaran had retired as managing director (MD) and chief executive officer (CEO) at the end of June 2016. He had joined Indian Overseas Bank on December 31, 2014. Prior to this assignment, Koteeswaran was executive director at Bank of India.
Pawan Kumar Bajaj, another executive director, has moved to Kolkata-based United Bank of India as managing director and chief executive.
Vibha Batra, former co-head for financial ratings at ICRA, said: “This is the last thing one should expect for the bank, which is passing through a bad phase. It is matter of serious concern.”
While Banks Board Bureau has recommended names for the post of MD & CEO, the government has cleared names for two banks - United Bank of India and Bank of Maharashtra. The government, which holds a 73.58 per cent stake in the bank, is yet to announce a new MD & CEO for IOB, which is reeling under losses and bad loans.
The bank reported a net loss of Rs 1,450.5 crore in the quarter ended June 2016, compared to a net profit of Rs 14.76 crore a year ago.
IOB’s gross non-performing assets (NPAs) stood at Rs 33,913.15 crore as on June 30, 2016 against Rs 16,451.2 crore as on March 31, 2016 and Rs 30,048.63 crore as on June 30, 2015.
The ratio of gross non-performing assets to gross advances stood at 20.48 per cent as on June 30, 2016 against 9.4 per cent as on March 31, 2016 and 17.4 per cent as on June 30, 2015.
The bank’s provisions and contingencies (excluding tax provisions) rose 222.17 per cent to Rs 2,137.81 crore in the June 2016 quarter over June 2015 quarter. The provision coverage ratio of the bank was at 47.61 per cent as on June 30, 2016.
The bank expects further equity infusion of Rs 3,101 crore from the government in the current year. Timely equity support from the government continues to be the key driver for the bank’s credit profile. The rating is constrained by the deterioration in the lender’s key asset quality indicators over the recent past, which adversely impacted its solvency and capitalisation profile, ICRA said.