Indian Overseas Bank (IOB) on Wednesday reported a 30.2% rise in its net profit to Rs 723 crore for the third quarter of FY24, compared with Rs 555 crore in the year-ago period. Increased interest income and higher recovery from technically written-off accounts boosted the profit.
Total income stood at Rs 7,437 crore, against Rs 6,006 crore, registering a growth of around 24%. Ajay Kumar Srivastava, MD and CEO, said the growth in net profit was due to an increase in interest income and the handsome recovery. The bank has been tightly monitoring the slippage and recovery aspects.
“In Q3, we had fresh slippage to the tune of Rs 331 crore, whereas we could recover Rs 1,126 crore, out of which cash recovery was at Rs 327 crore. The important aspect was that morethan 60% of the total recovery was form technically written-off accounts,” he said.
IOB has recovered Rs 3, 200 crore so far in the current fiscal and expects to surpass the target of Rs 4,700 crore by the end of March 31.
The bank has been able to contain slippages to around Rs 300 crore every quarter and its slippage ratio in Q3 stood at 0.17% “ It will be able to maintain the net NPA ratio below 1% going forward, In Q3, it stood at 0.62%, and we will be able to further reduce it in the coming quarters,” Srivastava said.
On the asset quality front, net NPAs improved to 0.62% against 2.43% while the gross NPA ratio declined to 3.90% from 8.19%. The provision coverage ratio was at 96.85% as compared to 91.34%.
Interest income increased by 22% to Rs 6,176 crore from Rs 5,056 crore while non-interest income stood at Rs 1,262 crore, compared with Rs 950 crore, marking a growth of 33%.
The net interest margin (NIM) stood lower at 3.12%, against 3.27% in the same quarter last fiscal. “This was due to the impact of increases in interest rates on deposits,” he said. CASA increased to Rs 1,20,915 crore.
Total business of IOB increased to Rs 4,94,209 crore from Rs 4,32,530 crore. Deposits grew to Rs 2,78,046 crore from Rs 2,57,480 crore while gross advances stood at Rs 2,16,163 crore, compared with to Rs 1,75,050 crore.