MUMBAI: A massive improvement in asset quality helped the public sector lender Indian Overseas Bank (IOB) on Thursday report a record Rs 808 crore net income for the March quarter, up from Rs 650 crore in the year ago period, making it the highest ever number for the Chennai-headquartered bank.
Similarly, the bank also reported its highest ever annual earnings at Rs 2,656 crore for FY24, up from Rs 2,099 crore in FY23.
Overall its bad loan piles have more than halved in the reporting period, leading to lesser provisions; on the other hand the bank also made near record recoveries, that too from written off accounts, leading to write back of provisions made earlier.
Ajay Kumar Srivastava, the CEO of IOB, attributed the healthy set of numbers to the "exceptional control over slippages, with only Rs 1,517 crore of slippages in the quarter, accounting for just 0.87% of performing advance". Another boost was the recoveries which printed in at Rs 4,549 crore of which recovery in the quarter was Rs 1,468 crore as against Rs 1,400 crore a year ago. Of the total recoveries claw-back technically written off accounts stood at Rs 2372.44 crore.
The most important aspect driving the net income was the massive improvement in the bad loan piles, he said, adding the gains on the margin side too aided the bottom line. The all-important net interest margin rose by 33 bs to 3.53 percent in the quarter.
Total income during the quarter went up to Rs 9,112.67 crore from Rs 6,630.57 crore in the same quarter last year and the same for the year soared to Rs 29,730.97 crore from to Rs 23,523.42 crore.
Gross NPAs more than halved to 3.10% from 7.44% a year ago, and so did net NPAs which also more than halved to 0.57% from 1.83%, Srivastava said. In absolute terms, these numbers were printed in at Rs 6,794 crore in the quarter from Rs 14,072 crore a year ago and at Rs 1,217 crore from Rs 3,266 crore.
Net interest income for the quarter improved to Rs 6,629 crore, a significant growth from Rs 5,192 crore. Total business surged to Rs 5,04,923 crore from Rs 4,49,892 crore. Of this, gross advances rose to Rs 2,19,018 crore from Rs 1,89,009 crore. Total deposits rose to Rs 2,85,905 crore from Rs 2,60,883 crores and the low cost Casa deposits ratio rose to 43.90 from 43.74 and the cost to income ratio gained massively to 62.58 from 49.23.
IOB said it had initiated multi-pronged steps to sell 92 non-performing assets in two lots through e-auction under the open auction method to recover ₹13,472 crore.
Late last week, the bank said in a statement that it has published a sale notification to recover maximum amount from NPAs number over 92 accounts. The earlier measures taken by the bank had resulted in reduction of GNPAs from 11.69% as of March 2021 to 3.9% in December 2023.
The first portfolio includes 46 accounts financed under consortium arrangements, three accounts under multiple banking arrangements, and the remaining two sole banking ventures. Further, 38 accounts within the portfolio are formally admitted under the purview of NCLT. The second portfolio consists of 41 sole banking accounts.
IOB asked interested asset reconstruction companies and other eligible transferees to submit expressions of interest by May 13 to participate in the forthcoming e-auction scheduled for May 28.
