IOB Net Up 21.52% In Q1; Plans To Raise Rs 175 Crore

New Delhi, July 25: | Updated: Jul 26 2002, 05:30am hrs
Indian Overseas Bank (IOB) on Thursday reported a 21.52 per cent growth in net profit at Rs 72.96 crore during the first quarter of this fiscal and said it plans to mop up Rs 175 crore through debt issue by December.

“The net profit for the first quarter was Rs 72.96 crore as against Rs 60.04 crore during the year-ago period, despite a Rs 20 crore provision for VRS expenditure,” IOB chairman SC Gupta told reporters after a board meeting here.

Operating profit of the bank surged 107.96 per cent to Rs 158.07 crore during the quarter ended June 2002, mainly due to significant increase in interest income, he said.

Keeping its options open for a public issue in the next fiscal, the IOB chief said the bank targets to raise Rs 175 crore through sub-ordinated debt papers for increasing its Tier-II capital by December.

The Chennai-based bank raised Rs 111 crore through an IPO Sep 2000, to dilute government holding by 25 per cent.

“We do not need fresh capital (Tier-I capital) now as our capital adequacy ratio is 10.82 per cent. We may or may not go for an public issue next fiscal,” Mr Gupta said, adding IOB’s CAR was 9.5 per cent prior to the IPO.

He said the bank targets a 16-17 per cent growth in business (deposits plus advances) this fiscal.

IOB’s business was near Rs 50,000 crore in April-June 2002, with deposits at Rs 32,689 crore while advances were at Rs 16,505 crore.

As part of retail thrust, Mr Gupta said the bank targets to sanction Rs 500 crore towards housing loans this fiscal of which Rs 111 crore has been extended in first quarter itself.

IOB targets to bring down its gross non-performing asset ratio to 9.75 per cent this fiscal from 10.31 per cent in 2001-02 while cutting net NPA to 5.75 per cent from 6.32 per cent till March 2002. “We want to recover NPAs worth Rs 300 crore this fiscal. We want to go all out to exercise the powers vested with the bank by the Securitisation ordinance,” Mr Gupta said.

Although IOB recovered Rs 65 crore worth of sticky assets in the first quarter, fresh accumulation of NPAs were to the tune of Rs 150 crore.