IOB net surges twofold to ₹350 cr. as income rises
Bank to focus on recovery, says MD
Public sector lender Indian Overseas Bank (IOB) standalone net profit for the fourth quarter ended March increased more than twofold to ₹350 crore on account of a rise in other income and decline cost of deposits.
“We have excelled in all the key parameters and have requested the Reserve Bank to remove us from the Prompt Corrective Action,” said P.P. Sengupta, MD & CEO.
“Going forward, we will focus on recovery, low-cost deposits and less capital-consuming advances.”
According to him, in FY21, the bank made cash recoveries worth ₹4,200 crore against the targeted ₹4,100 crore and this fiscal, it aimed to recover ₹4,600 crore.
To a question, he said that the bank had strengthened its balance sheet by increasing the provision coverage ratio to 90.34% from 86.94%. It plans to transfer bad loans worth ₹1,600 crore to the National Asset Reconstruction Company Ltd.
In Q4, total income rose by ₹537 crore to ₹6,074 crore, interest income contracted by ₹385 crore to ₹4,057 crore and net interest margin declined to 2.2% from 2.6%.
Gross non-performing assets declined to 11.69% from 14.78%( in absolute terms to ₹16,323 crore from ₹19,913 crore) while net NPAs declined to 3.58% from 5.44%.
Total business rose to ₹3,79,885 crore from ₹3,57,723 crore. During the year, IOB reduced the concentration of bulk deposits and high cost deposits and increased retail term deposits to have a stable and sustainable deposit profile and reduce the cost of funds. It also evolved a policy of not taking fresh exposures to stressed sectors, below hurdle-rated accounts and BB and below rated accounts. The bank also exited from accounts in the stressed sectors, wherever feasible.
On Monday, the board approved raising ₹2,000 crore for the current fiscal by issue of 125 crore equity shares either by way of follow on public offer/rights issue and issue of Basel-III compliant tier-II bonds of ₹1,000 crore on private placement or public issue.
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