Public sector lender Indian Overseas Bank (IOB) posted a net loss of R516 crore for the third quarter compared to a net profit of R75 crore in the same quarter last fiscal.
The bank attributed the huge loss to increase in provisions for domestic and overseas advances and also due to a conscious decision by the bank to contain credit growth. Total income stood at R6,647.45 crore compared to R6,190.20 crore.
The bank’s business grew 6.18% to R4,11,354 crore as on December 31, 2014 from R3,87,406 crore. Total deposits rose 9.14% to R2,32,822 crore from R2,13,319 crore, a year ago.
Advances rose only 2.55% to R1,78,532 crore as on December 31, 2014, from R1,74,087 crore. Gross NPAs as on December 31, 204 stood at R14,501 crore against R13,334 crore as on September 30, 2014, with a gross NPA ratio of 8.12% (compared to 5.27%, a year ago) and 7.35%, respectively. During the same quarter last year, the bank’s gross NPA was R9,168.08 crore.
Net NPA as on December 31, 2014, stood at R9,511.15 crore against R9,108.81 crore as in September 30, 2014, with a net NPA ratio of 5.52% and 5.17%, respectively. However, slippages during the quarter were reduced by 50%. Provision coverage ratio improved to 50.03% as on December 31, 2014, from 48.74%as on September 30, 2014. The bank’s capital-adequacy ratio (CRAR) as per Basel-III, Tier-I stood at 7.24% as on December 31, 2014 and Tier-II was at 2.91%.
Total CRAR stood at 10.15% compared to 10.30% during the quarter ended September 30, 2014.
Last week, the bank had issued Basel-III-compliant additional tier-I perpetual bonds for R1,000 crore to augment the capital requirement of the bank under Basel-III.