Sequentially, net profit grew 22.3 per cent from Rs 121 crore in June quarter of this fiscal.
Total income rose 8.1 per cent to Rs 5,431 crore during the quarter under review as against Rs 5,024 crore in the same quarter of 2019-20, Indian Overseas Bank (IOB) said in a regulatory filing.
Interest income increased to Rs 4,363 crore from Rs 4,276 crore a year ago.
There was a substantial improvement in bank’s asset quality as the gross non-performing assets (NPAs) plunged to 13.04 per cent of the gross advances as of September 30, 2020 from 20 per cent at the end of September 2019.
In value terms, gross NPAs or bad loans fell to Rs 17,659.63 crore as against Rs 28,673.95 crore a year ago.
Net NPAs reduced to 4.30 per cent (Rs 5,290.60 crore) from 9.84 per cent (Rs 12,507.97 crore) a year ago.
Total fresh slippages (other debits to existing NPA accounts) for September quarter were contained at Rs 292 crore, the lender said.
“Total cash recovery for September 2020 was Rs 513 crore (including cash recovery) as against Rs 172 crore in June 2020,” it said.
Provisions for bad loans and contingencies fell to Rs 1,192.55 crore during the quarter under review from Rs 2,996.04 crore set aside in the year-ago quarter.
IOB said it has made required provisioning in advances in specific accounts so as to improve net NPAs.
The bank’s gross advances fell to Rs 1,35,469 crore as of September 30, 2020 from Rs 1,43,350 crore a year ago. However, it was slightly higher from Rs 1,31,565 crore at the end of June 2020.
“The bank has evolved a policy of not taking fresh exposures in stressed sectors, below hurdle rated accounts and BB and below rated accounts. The bank has also exited from accounts in the stressed sectors, wherever feasible,” it said.
The bank has grown under retail and agri sector and re-balanced the advance balance by consciously reducing the stressed sector in corporate segment, it added.
Provision coverage ratio improved to 89.36 per cent at the end of September 2020 as against 75.85 per cent at the end of September 2019.
IOB’s average cost of deposit reduced to 4.89 per cent from 5.41 per cent, while net interest margin improved to 2.18 per cent for the quarter as against 1.86 per cent in the year-ago period.
The bank said on relaxation of COVID-19 related lockdowns, it started mega e-auction process pan-India for sale of properties.
The first such e-auction was conducted, fetching countable recovery by sale of properties and such e-auctions are planned to be conducted every month like in 2019-20, IOB said.
Shares of IOB on Friday closed 0.72 per cent lower at Rs 9.65 apiece on the BSE.