Indian Overseas Bank (IOB) reported a 56% year-on-year jump in net profit at ₹1,365 crore for the third quarter, extending its ₹1,000-crore-plus quarterly profit run to the fourth straight quarter since March 2025.
Total income rose 15% year-on-year to ₹9,672 crore, driven by growth in both interest and non-interest income. Interest income increased 15% to ₹8,172 crore during Q3FY26, while non-interest income also grew at a similar pace to ₹1,499 crore. Interest expenses rose 13% to ₹4,874 crore, helping net interest income (NII) grow 18% to ₹3,299 crore.
Net Interest Margin Stability
Domestic net interest margin (NIM) moderated to 3.42% from 3.47% a year ago but improved sequentially from 3.35% in the September quarter. Managing Director and CEO Ajay Kumar Srivastava said the bank will continue to maintain domestic NIM at 3.3% to 3.4% range.
The bank’s total business stood at ₹6.44 lakh crore as of Q3FY26. Advances grew 24% year-on-year to ₹2.95 lakh crore, led by strong traction in retail and agriculture loans. Retail advances surged 43% to ₹83,838 crore, while agricultural advances rose 35% to ₹92,996 crore. MSME advances increased 17% to ₹50,635 crore. Retail, agri and MSME (RAM) loans now account for 77% of the total loan book, up from 72% a year ago.
Srivastava said the spurt in retail loans is largely driven by housing, vehicle loans and loans against property (LAP). “In Vehicle loans, there was a huge demand post the GST rate cut,” he said.
Liability and Deposit Mix
On the liability side, deposits grew 15% year-on-year to ₹3.49 lakh crore. Low-cost current and savings account (CASA) deposits rose 8% to ₹1.43 lakh crore. Within that savings bank deposits increased 14% to ₹1.17 lakh crore, while current account deposits declined 6% to ₹25,927 crore..
Srivastava said current account money comes on the last day of the quarter and goes away the next day. “It does not add any value to the system. We have taken a conscious call on those types of transactions and given direction to the branches,” he said. CASA ratio slipped to 41% from 44% in the year-ago period. Retail term deposits grew 16% to ₹1.75 lakh crore
Asset quality improved further, with gross non-performing assets (NPA) declining to 1.54% from 1.83% in the September quarter and 2.55% a year ago. Net NPA also improved sequentially to 0.24% from 0.28%.
Total slippages during the quarter stood at ₹301 crore, largely from retail, agriculture and MSME segments, while the corporate book saw no slippages. Recoveries during the quarter were around ₹890 crore compared with ₹957 crore in the December 2024 quarter. “₹630 crore or 71% of the total recoveries are from technically written off accounts,” Srivastava said, adding that the bank is confident of achieving its ₹4,500 crore recovery target for the full year.
Shares of IOB closed 2% higher at ₹36.15 on the NSE.