Indian Overseas Bank reports Q1 net at ₹633 crore, up by 26.6%

Public sector Indian Overseas Bank on Monday reported a 26.60% rise in its net profits for the April-June 2024 quarter at ₹633 crore.

The city-headquartered bank had registered a net profit of ₹500 crore during the corresponding quarter of last year.

Total income during the quarter under review grew to ₹7,568 crore up by 21.54% from ₹6,227 crore registered in the same quarter of last year.

The total business of the bank during the quarter under review grew by 16.04% to ₹5,28,773 crore from ₹4,55,664 crore registered in the same period of last year.

For the quarter ending June 30, 2024, the Net Interest Margin stood at 3.06% while the Provision Coverage Ratio improved to 96.96% registering an improvement of 293 basis points.

The Non-Interest Income grew by 28.64% year-on-year to ₹1,033 crore in Q1FY'25 as against ₹803 crore registered in Q1 of last financial year.

The interest income grew by 20.48% year-on-year to ₹6,535 crore during the April-June 30 2024 quarter as against ₹5,424 crore registered year ago.

The BASEL III Capital Adequacy Ratio improved to 17.82% as of June 30, 2024.

Briefing reporters, the bank's Managing Director and CEO Ajay Kumar Srivastava said the increase in net profit because the net income has increased.

"Interest income as well as non-interest income and expenses we have been able to control to a certain extent so, net profit has increased because operating profit has increased.", he said.

To a query, he said the bank has set a target recovery of ₹5,500 crore during the financial year against last year's total recovery of ₹4,700 crore.

"I think we will be able to cross ₹5,500 crore in recoveries this year. Q1 we have made a recovery of ₹582 crore. Balance in nine months we will be able to recover the remaining ₹5,000 crore...," he said.

For the quarter ending June 30, 2024, the total recovery of the bank stood at ₹582.27 crore while recovery made from the technically written-off accounts was ₹311.37 crore.

To another query, Srivastava said the board has approved fund raising of ₹5,000 crore during the financial year as part of diluting the Government of India's stake in the bank.

"The board has given its approval for raising capital. We may raise it through QIP (Qualified Institutional Placement) later this year. After this, the Government of India holding is expected to come down by 10-12%." he said.

The Gross NPA (Non-Performing Assets) stood at 2.89% as of June 30, 2024, as compared to 7.13% as of June 30, 2023, while Net NPA stood at 0.51% as of June 2024 as compared to 1.44% as of June 30, 2023.