Indian Overseas Bank (IOB) on Thursday reported a 58% year-on-year jump in its net profit for the September quarter to ₹1,226 crore, supported by higher interest income and lower operating expenses. The lender has maintained a ₹1,000-crore-plus quarterly profit for the third consecutive quarter.
Interest income rose 15% year-on-year to ₹7,849 crore while interest expenses grew 11% to ₹4,789 crore. Consequently, net interest income (NII) increased 21% to ₹3,059 crore. Domestic net interest margin (NIM) improved to 3.35% compared with 3.21% in the year-ago period and 3.17% in the June quarter.
Total advances expanded 21% to ₹2.78 lakh crore while deposits rose 9% to ₹3.39 lakh crore. The bank’s total business crossed the ₹6-lakh-crore milestone, reaching ₹6.17 lakh crore at the end of the quarter, up 14%.
Retail advances surged 45% to ₹78,765 crore while agricultural advances grew 27% to ₹83,023 crore. Advances to the MSME sector increased 17% to ₹48,494 crore. However, corporate advances fell 3% to ₹50,133 crore. Retail, agriculture, and MSME loans together now account for 81% of the total loan book, up from 76% in Q2FY25.
Managing Director and CEO Ajay Kumar Srivastava said the retail and agricultural loan portfolios are expected to surpass the ₹1-lakh-crore mark each during FY26.
Low-cost current and savings account (CASA) deposits rose 4% to ₹1.37 lakh crore while retail term deposits grew 15% to ₹1.71 lakh crore. Current account deposits declined by ₹3,127 crore, or 10%, due to the outflow of high-ticket accounts, leading to a fall in CASA share to 41% from 42.44% a year ago. “In the current circumstances, CASA remains a major challenge for all banks, and anything above 40% is considered good,” Srivastava said.
The credit-to-deposit (CD) ratio sharply improved to 81.98% from 74.09% in the corresponding quarter last year. The asset quality also strengthened, with gross NPA improving to 1.83% from 1.97% in the June 2025 quarter while net NPA declined to 0.28% from 0.32%. Total recoveries during the quarter stood at ₹874 crore, including ₹461 crore from technically written-off accounts.
Shares of IOB on Thursday closed 1% down at ₹39.78 on the NSE.