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Indian Overseas Bank saw Q3 net profit at Rs 212 crore

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Chennai: Indian Overseas Bank has posted a profit of Rs 212 crore for the third quarter on the back of improvement in its assets quality, lower provisioning against stressed assets and a 82.36% increase in other income. The public sector bank had reported a loss of Rs 6,057 crore in the same period a year ago.
IOB MD Partha Pratim Sengupta said the recovery was aided by a number of measures. “We decided to come out of the stressed corporate sector by reducing our exposures and we are going towards capital light advances with focus on retail, agri and MSME segment, and our treasury has performed well,’’ he added. The bank also cleaned up red ink due to capital infusion. “Infusion of capital by the Government of India in the last financial year helped us improve our books. Following this we made adequate provisions and restarted our business,” he added.
Exceeding the set recovery target of Rs 1,000 crore per quarter, IOB has achieved recovery of Rs 1,055 crore in Q3. It had recovered Rs 760 crore in Q2. On coming out of the Prompt Corrective Action (PCA), Sengupta said, “We have achieved all the parameters to move out of PCA. However, the leverage ratio is still pending due to lack of benefit from certain assets. It is our duty to show good results. It is left for the RBI to decide now.” IOB’s income saw an increase of 82.4% at Rs 1,543 crore in the December quarter, as against Rs 846 crore last Q3. Total income stood at Rs 5,787 crore as against Rs 5,199 crore in the year ago period. IOB’s asset quality has improved with gross non-performing assets (NPAs) falling to 12.2% of the gross advances by December 31, 2020, as against 17.1% by the end of December, 2019. Net NPAs declined to 3.1% from 5.8% in the same period.
The Provision Coverage Ratio stood comfortably at 91.9%. Capital adequacy ratio has gone up to 11.5%. The bank has made provision aggregating to Rs 924 crore (including Covid-19 provision of 683 crore) to cover stressed accounts. This includes an additional provision of Rs 241 crore for stressed accounts on adherence to the Supreme Court order.
On September 3, the apex court, in an interim order to consider the hardships of the pandemic and moratorium, directed that accounts which were not declared NPA till August 31, 2020 shall not be declared NPA till further orders.
However, gross advances dipped to Rs 1.37 lakh crore in December, 2020, from Rs 1.38 lakh crore in December, 2019.

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