Indian Overseas Bank (IOB) has exhibited impressive performance across key parameters during the December 2023 quarter. Its net profit, net interest income and advances grew in double digits and its asset quality also exhibited improvements during the period.
For the quarter ended December 31, 2023, the Chennai-headquartered PSU lender’s net profit grew by 30 per cent to ₹723 crore compared with ₹555 crore in the year-ago quarter, helped by strong rise in net interest income and lower provisions.
Its operating profit rose by 16 per cent at ₹1,780 crore (₹1540 crore in Q3 of FY23) amid about 6 per cent rise in net interest income at ₹2,398 crore (₹2,272 crore).
Interest income grew 22 per cent at ₹6,176 crore (₹5,056 crore), while non-interest income rose to ₹1,262 crore (₹950 crore). Provisions for NPA were lower at ₹367 crore (₹1,121 crore).
Controlling slippages
Fresh slippages were at ₹331 crore, but total recoveries were higher at ₹1,126 crore, of which about 56 per cent came from technically written-off accounts. In the December 2023 quarter, the slippage ratio was 0.17 per cent, which was described as ‘one of the best in the industry’ by the bank.
“We have been controlling slippages at ₹300-odd crore level as our monitoring mechanism is working fine. Going forward, we would be able to maintain the slippages at the same level, while doing higher recoveries,” said Ajay Kumar Srivastava, MD and CEO of the IOB.
For the December 2023 quarter, the gross NPA ratio fell to 3.9 per cent from 8.19 per cent in the year-ago quarter and 4.74 per cent in the preceding quarter. Net NPA stood at 0.62 per cent against 2.43 per cent in Q3 of FY23 and 0.75 per cent in Q2 of this fiscal. “We hope to maintain net NPA below 1 per cent in the coming quarters too,” he said.
The total business of the bank grew 14 per cent at ₹4,94,209 crore in the December 2023 quarter compared with ₹4,32,530 crore.
Gross advances increased by 23.5 per cent to ₹2,16,163 crore as of December 31, 2023 (₹1,75,050 crore in Q3 of FY23). Of the total credit, the RAM (retail, agriculture and MSME) segment accounted for about ₹1,37,000 crore, accounting for 69 per cent of the total credit portfolio.
Total deposits grew 8 per cent to ₹278,046 crore (₹257,480 crore).
The bank’s CASA ratio dipped marginally to 43.49 per cent from 43.65 per cent in the September 2023 quarter and 44.50 per cent in the year-ago quarter. “But we have recorded growth in absolute terms – to ₹1,20,915 crore from 1,14,591 crore,” he said.