IOB Q3 net profit rises 21% to ₹874 cr. on improved show, asset quality

Public sector lender Indian Overseas Bank (IOB) reported December quarter net profit rose nearly 21% to ₹874 crore from ₹723 crore in the year earlier on the back of improved asset quality and business.

The performance comes ahead of its proposed qualified institutional placement (QIP) this quarter to raise ₹2,000 crore that consequentially will reduce the government holding by around 2.5%. The government now holds 96.38% in the Chennai-headquartered bank.

On the December results, MD and CEO Ajay Kumar Srivastava said the higher net profit came on a more than 13% increase in total income to ₹8,409 crore (₹7,437 crore). Net-interest income rose 16.30% in the quarter to ₹2,789 crore (₹2,398 crore). Net Interest Margin (NIM) stood at 3.33% (3.12%).

Net NPA (non-performing asset) ratio reduced to 0.42% from 0.62% in the year earlier period. It was an improvement sequentially too as net NPA for September quarter was 0.47%. Gross NPA ratio declined to 2.55% from 2.72% in the previous quarter and 3.90% year earlier.

Total recovery for the third quarter stood at ₹956.65 crore with recovery from the written off accounts at ₹676.64 crore.

Total business increased 9.82% to ₹5,42,753 crore (₹4,94,209 crore). Total deposits rose 9.74% to ₹3,05,121 crore (₹2,78,046 crore), while advances increased 9.93% ₹2,37,632 crore (₹2,16,163 crore). CASA improved 9.45% to ₹1,32,338 crore, with a CASA ratio of 43.37%.

IOB shares closed 3.91% higher at ₹52.61 apiece on the BSE.