Public sector lender Indian Overseas Bank (IOB) reported a 113% growth in standalone net profit for the third quarter ended December to ₹454 crore due to cash recovery and containing operating costs.
“Even though we came out of Prompt Corrective Action (PCA) on September 29 we are still being monitored closely by RBI for one more year. We are following the strict prudential norms. This will give us better results,” said P.P. Sengupta, MD and CEO.
Interest income contracted to ₹4,198 crore from ₹4,244 crore and other income fell by 23% to ₹1,186 crore. Net interest margin declined to 2.4% from 2.45%.
Gross non-performing assets (GNPAs) shrank to 10.4% from 12.19%, while net NPAs declined to 2.63% from 3.13%. Provision Coverage Ratio improved to 92.33% from 91.91%.
“Going forward, we would like to bring down thegGross NPA to single digit by March 31, 2022. The domestic NPA is at 9.8-9.9%, while overseas NPA is more than 16%. Our aim is to bring it down and [we] are trying all sorts of cash recovery,” he said, adding that the bank was confident of doubling the annual profit during this fiscal to ₹1,660 crore (Rs.831 crore).
Total recovery stood at ₹1,200 crore, including recovery from tech write-off of ₹247 crore and sale to ARC of ₹241 crore and security receipts against ₹1,056 crore.
Total business stood at ₹4,92,507 crore against ₹4,58,276 crore. Deposits in the current and savings accounts (CASA) gained 42.53% to ₹1,05,105 crore.
According to Mr. Sengupta, about ₹17,942 crore worth of NPAs were waiting for NCLT resolution. In the first phase, IOB had submitted three accounts worth ₹1,800 crore to the bad bank.
On capital requirement, Mr. Sengupta said the bank would need to immediately to raise tier-II capital of ₹1,000 crore and the balance of ₹2,000 crore after reviewing March figures.
“This would happen during the March quarter or next year. We need capital of ₹3,000 crore for the next two to three years. For this, we have to strengthen our balance sheet, ratings and investors’ interest,” he said.
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