Indian Overseas Bank

Indian Overseas Bank conducted 10^th Annual general meeting in Chennai on 20 July 2010. The meet was addressed by Suhas Anand Bhat - Chairman and Managing Director of the Bank.

Highlights of the meet are:

• The Total Business grew from Rs 175925 crore as on 31 March 2009 to Rs 191577 crore as on 31 March 2010 recording a growth of 9% on y-o-y basis.
• Total deposits has grown by 11% to Rs 110795 crore as on 31 March 2010 from Rs 100116 crore as on 31 March 2009.
• Gross Advances grew by 7% from Rs 75810 crore as on 31 March 2009 to Rs 80782 crore as on 31 March 2010.
• Credit Deposit ratio stood at 72.91% as on 31^st March 2010 as against 75.72% as on 31 March 2009.
• The dip in the operating profit by 27% and Net Profit by 47% is due to fall in treasury profits, higher provisioning for bad debts, provision for wage arrears and slow growth in advances.
• The Net Investments as on end of FY10 stood at Rs 37651 crore as against Rs 31215 crore in FY11.
• The return on Assets stood at 0.53% in 2009-10. The return on average Net Worth was 11.97% in FY10.
• The Gross NPA ratio was 4.47% and Net NPA ratio was 2.52% at end of FY10. The increase in Gross NPA and Net NPA ratios were due to the defaults mainly seen in the infrastructure, priority trade finance and real estate sectors which in turn is reflective of Global economic crisis.
• The Provision coverage ratio (PCR) has improved to 53.97%. This may be viewed in the back drop of the 70% PCR norms prescribed by RBI to be reached by September 2010 or such other date may be permitted by RBI.
• The bank is aggressive in NPA recovery. It has recovered and upgraded Rs 508 crore of NPA during the Q1FY11 as against Rs 177 crore during Q1FY10.
• CARA as per Basel II frame work as on 31.03.2010 works out to be 14.78%.
• The Business per employee stands increased from Rs 6.89 crore to Rs 7.12 crore. The profit per employee stands at Rs 2.63 lakh as on 31 March 2010.
• The Book value per share has increased from Rs 104.94 by end of FY10 to Rs 111.89 a year ago.
• The Shareholders have approved dividend of 35% for FY10.
• IOB has fixed base rate at 8.25% on basis of cost of deposits effective from 1^st July 2010. The base rate shall be subject to review at least once in a quarter.
• The bank has 4 new agricultural credit schemes viz. IOB Urban Horticulture, IOB Agri Transport, ION Green Card and IOB Arthias. The bank is observing each month as special schemes to increase credit flow viz. tractor month April 2010, Farmers Club Month - May 2010, KCC Month - June 2010, Rural Godown Month - July 2010, SHG Month - August 2010 etc.
• The bank has entered in to Joint Venture agreement with Bank of Baroda and Andhra Bank for setting up a banking subsidiary in Malaysia. The shareholding pattern in the subsidiary is Bank of Baroda 40%, Indian Overseas Bank 35% and Andhra Bank 25%. The Ministry of finance has since approved the JV partner application and the commercial bank license for setting up a banking subsidiary in Malaysia. The JV bank is named as India International Bank (Malaysia). Steps are being taken to incorporate the company in the approved name following which an application will be made to Bank of Negara for baking License.
• The bank has achieved 100% network status as well as 100% CBS status of branches. The bank has also added 195 new ATM's during the year taking total no of ATM's to 771 as on 31 March 2010.
• During the year FY10, the bank has opened 65 new branches and upgraded 20 extension counters in to full fledged branches. At end of FY10, the bank has 2002 branched and 14 extension counters in India and 6 overseas branches. During the year bank has opened Representative office at Dubai and office has become fully operational since February 2010.

Roadmap ahead:

• To build two proven advantages - Strong rural penetration and overseas presence
• Accelerated thrust on pro active NPA management and NPA recovery. Plans to have vigorous NPA recovery.
• Selective, measured and sustained credit expansion