Indian Overseas Bank Q1 earnings: Net profit rises 49% to ₹1,659 crore, NII jumps 34%

Indian Overseas Bank, the Chennai-based state-run lender, on Monday, July 20, reported a net profit of ₹1,659 crore in the first quarter of current financial year, marking an increase of 49% from ₹1,111 crore in the same period last year. The sharp jump in profit came on the back of lower provisions for bad loans and a healthy loan growth during the quarter.

In April-June period, Indian Overseas Bank's provisions for bad loans dropped by 41% to ₹105 crore and advances rose by 23% to ₹3.22 lakh crore.

The Chennai-based lender's net interest income or difference between interest earned on loans and expended on deposits advanced 34% to ₹3,688 crore as against ₹2,746 crore in the year-ago period.

The bank said that its domestic net interest margin (NIM) rose to 3.48% and while global NIM rose to 3.37%.

The bank's asset quality showed an improvement as its gross non-performing assets (NPAs) came in at 1.33% in Q1 down from 1.97% in the year-ago period.

In absolute terms, gross NPAs stood at ₹429 crore.

Indian Overseas Bank said that its total business increased by 18% to ₹6.98 lakh crore and total NPA recovery stood at ₹654 crore during the quarter, which was 3.35 times the quarterly slippages.

The bank's total slippages during the quarter reduced to ₹195 crore and slippage ratio came down to historic low at 0.06% for the quarter, Indian Overseas Bank said in a press release.

The Chennai-based lender expanded its domestic network to 3,522 branches with the addition of 28 new branches during the quarter.

Indian Overseas Bank shares came under strong buying interest after earnings announcement as the stock jumped as much as 4.87% to hit an intraday high of ₹35.50, outperforming the NIFTY PSU Bank index which was up 2.75%.

Trading volume in Indian Overseas Bank shares jumped by eight times to 1.98 crore shares compared with an average of 24.88 lakh shares traded daily in the past two weeks.