 "Vacuum at top in IOB")
At an EGM called by the Bank on Thursday, the shareholders approved allotment of upto 55,57,14,797 shares to the Government, which in turn will infuse Rs 1,551 crore on preferential basis.
The central government has recently announced an allocation of Rs 3,101 crore into the bank by way of preferential allotment of equity, which is struggling with high non-performing assets (NPA). Almost 50 per cent of this amount, Rs 1,551 crore, is marked for immediate infusion, which would help the Bank to keep its capital adequacy ratio within the limits.
State-run Indian Overseas Bank, has reported a net loss of Rs 1,451 crore ($217 million) with a further rise in its sour assets, for the first quarter of this fiscal year.
Bad loans as a percentage of total loans rose to 20.48% as of end-June from 17.4% three months earlier, according to a regulatory filing of the Bank.
Provisions, including for bad loans, more than tripled from a year earlier to Rs 2,138 crore in the three months to June 30.
The total income saw a decline of 12% to Rs 5,868 crore during the quarter as against Rs 6,672 crore recorded during the corresponding quarter of previous year.
The Capital Adequacy Ratio in Basel III is at 9.47%. The bank said that the government of India has allocated Rs 3,101 crore by way of preferential allotment of equity and 50 per cent of this amount, Rs 1,551 crore, is marked for immediate infusion. With the fund infusion, the Capital Adequacy Ratio of the bank will be above the regulatory minimum of 9.625 per cent, it added. After the capital infusion, it would be at 10.37 per cent.
