NEW DELHI: Indian Overseas Bank on Thursday posted a net profit of Rs 121 crore for June quarter 2020 mainly due to fall in bad loans.
The state-owned lender posted a net loss of Rs 342.08 crore for the same quarter a year ago.
In March quarter, the bank had a profit of Rs 144 crore, Indian Overseas Bank said in a regulatory filing.
Total income of the bank during April-June 2020-21 rose to Rs 5,233.63 crore from Rs 5,006.48 crore in the same period of the previous fiscal, mainly due to increase in treasury income, it said.
Interest income stood at Rs 4,302 crore for the quarter as against Rs 4,336.39 crore a year ago mainly due to decrease in MCLR (marginal cost of funds based lending rate), it added.
Provisions and contingencies for the quarter were reduced to Rs 969.52 crore as against Rs 1,157.82 crore parked aside for the year- ago period, as the bad loan proportion of the bank came down significantly.
Gross non-performing assets (NPAs) were cut to 13.90 per cent of gross advances as on June 30, 2020 from 22.53 per cent by the same period of 2019.
In value terms, gross NPAs or bad loans came down to Rs 18,290.84 crore from Rs 33,262 crore.
Likewise, net NPAs dipped to 5.10 per cent (Rs 6,080.89 crore) from 11.04 per cent (Rs 14,173.84 crore).
Total deposits increased to Rs 2.26 lakh crore as on June 30, 2020 as against Rs 2.21 lakh crore by June last year, it said.
Total business was up at Rs 4.41 lakh crore from Rs 4.37 lakh crore.
Gross advances stood at Rs 1.32 lakh crore by June-end as against Rs 1.47 lakh crore by the year-ago same period, IOB said, adding the bank has evolved a policy of not taking fresh exposures in stressed sectors, below hurdle rated accounts and BB and below rated accounts.
"The bank has also exited from accounts in the stressed sectors to improve the quality of assets," said the Chennai-headquartered lender.
The net interest margin -- interest earned minus interest expended -- improved to 2.08 per cent from 2.01 per cent.
IOB said it made recovery of Rs 1,991 crore during June 2020 quarter as against recovery of Rs 2,238 crore a year ago and the total fresh slippage (other than debits to existing NPA accounts) for the quarter stood at Rs 257 crore.
Provision coverage ratio improved to 87.97 per cent from 72.24 per cent, it said. IOB stock closed at Rs 11.43 on BSE, up 3.63 per cent from the previous close.