The bank had made all the provisions in the December quarter and could bring net NPA less than 6%.
Partha Pratim Sengupta, the former deputy managing director of State Bank of India, has been appointed as the new MD & CEO of Chennai-based public sector lender Indian Overseas Bank (IOB). His appointment will be with effect from the date of assumption of office and upto his date of attaining the age of superannuation, that is till December 31, 2022, or until further orders, whichever is earlier, IOB said in a stock exchange filing late evening on Thursday.
Prior to his elevation to the post of deputy MD in SBI he was the CGM of SBI Kolkata circle. Sengupta during his more than three decades of experience with SBI had served in various capacities in different geographies and has hands-on experience both in retail and corporate banking.
Sengupta replaces Karnam Sekar who retired last month after steering the loss-making IOB into profitability. After making losses continuously for the last eighteen quarters, IOB reported a net profit of Rs 144 crore for the fourth quarter of FY’2020, paving the way for the bank to come out of the prompt corrective action (PCA) imposed by the RBI, some five years ago. IOB had reported a net loss of Rs 1,985 crore in Q4 of the last financial year and a net loss of Rs 6,075 crore in the last quarter, sequentially.
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Karnam Sekar then told media persons that the bank will write to RBI after viewing the June quarter results seeking revocation of PCA. He added that less provisioning and increased recoveries have helped the bank to post the profit which is sustainable in the long run.
The bank had made all the provisions in the December quarter and could bring net NPA less than 6%. Its corporate credit pie had almost exhausted with all the accounts having been classified. Retail, agriculture and MSM (RAM) portfolio grew to almost 70% of the loan book.
The bank had 772 loss incurring branches in March 2014 which was one of the immediate effects of rapid branch expansion. The continuous follow up from the administrative layers and efforts taken at the branch level has helped to reduce the number of loss incurring branches from 772 branches in March 2014 to 115 branches in March 2020. Higher thrust on retail and MSME lending was laid down to improve the yield level apart from diversification of the risk.