Indian Overseas Bank surges 21% in 2 days post Q4 results, hits 52-wk high

The bank reported a net profit of Rs 144 crore in Q4FY20 as against a net loss of Rs 1,985 crore in Q4FY19.

Shares of Indian Overseas Bank (IOB) were locked in the upper circuit band of 10 per cent, at Rs 13.18 -- also its 52-week high -- for second straight day on the BSE on Friday after the bank reported a net profit of Rs 144 crore for the quarter ended March 2020 (Q4FY20) on the back of lower provisioning for bad loans. The state-owned bank had posted a net loss of Rs 1,985 crore in the year-ago quarter.

The stock has rallied 21 per cent in the past two trading days on the BSE. The trading volumes on the counter jumped over three-fold with a combined 19.5 million equity shares changing hands while there were pending buy orders for 7.52 million shares on the BSE and NSE till 10:18 am.

After making losses continuously for the last 18 quarters, the public sector lender IOB reported profit as bad loans declined significantly. This will, the management says, help the bank to come out of the prompt corrective action (PCA) imposed by the Reserve Bank of India (RBI) some five years ago.

Net Interest income (NII0 during March quarter of FY20 grew 3.6 per cent to Rs 1,532 crore as compared to Rs 1,479 crore in the corresponding quarter of the previous fiscal. Provisioning for bad loans and contingencies during the quarter under review fell to Rs 1,060 crore as against Rs 4,502 crore in the year-ago quarter.

On the asset quality front, there was a huge improvement in gross non-performing assets (NPA) which stood at 14.78 per cent of the gross advances as on March 31, 2020, as against 21.97 per cent at the end of March 2019. Net NPA declined to 5.44 per cent from 10.81 per cent in previous year quarter.