Indian Overseas Bank (IOB) on Wednesday reported a net loss to Rs 1,425.06 crore for the December quarter as against a net loss of Rs 516.03 crore in the corresponding quarter last year.
Indian Overseas Bank (IOB) on Wednesday reported a net loss to Rs 1,425.06 crore for the December quarter as against a net loss of Rs 516.03 crore in the corresponding quarter last year. The Chennai-based public sector lender has attributed the widening of the losses to higher provisioning against bad loans.
IOB said in a statement: “On account of increased provisions for domestic and overseas advances including provision made for asset quality review, as per the Reserve Bank of India’s direction, resulted in net loss.”
Total income of the bank declined to Rs 6,446 crore during the quarter from Rs 6,776 crore in the same period a year ago. The gross NPAs, as a percentage of total advances, rose to 12.64% from 8.12% in the same quarter a year ago. Net NPAs went up to 8.32% compared to 5.52% .
Total provisions, excluding for income tax, increased to Rs 1,896.06 crore as against Rs 1,183.04 crore in the same period last fiscal.
Net interest margin of the bank declined to 1.93% in the December quarter. Total business stood at Rs 4.10 lakh crore at the end of third quarter of the current fiscal.
The credit-deposit (CD) ratio for Q3 stood at 77.75% as against 75.75% for Q2, while the provision coverage ratio was at 50.36%.
The bank has been put under prompt corrective action by the Reserve Bank of India since October 2015 with the view to improving internal processes to deal with mounting non-performing assets.
The apex bank had specified certain regulatory trigger points, as a part of prompt corrective action (PCA) framework, in terms of three parameters — capital to risk weighted assets ratio (CRAR), net NPA and Return on Assets (RoA) — for initiation of certain structured and discretionary actions in respect of banks hitting such trigger points.