Indian Overseas Bank Q1 net profit up 171% at Rs327cr on lower provisioning and lower interest outgo

Indian Overseas Bank Ltd reported -1.50% fall in total consolidated revenues in the Jun-21 quarter at Rs5,155cr

Aug 04, 2021 10:08 IST India Infoline News Service

Indian Overseas Bank Ltd reported -1.50% fall in total consolidated revenues in the Jun-21 quarter at Rs5,155cr, but revenues were -15.13% lower on sequential basis compared to Mar-21 quarter due to sharply lower other income component. On yoy basis, the lower interest and investment income were offset by higher other income.

On a yoy basis, the revenues from corporate treasury were sharply lower while the revenues from retail banking were flat to marginally higher. However, the income from corporate banking showed a growth on yoy basis. The bank expects to come out of the prompt correction action shortly, after which it can expand its loan books.

Profit after tax (PAT) for the Jun-21 quarter was higher by 171% at Rs327cr due to higher other income and lower provisioning, which fell by more than 11% to Rs868cr. NIMs were flat to marginally lower at 2.34% while the CASA ratio was marginally higher at 41.63% in the Jun-21 quarter. Cost to income ratio was also stable at around 53.57%.

Gross NPAs at 11.48%, was sharply lower in yoy terms, but absolute NPAs are still quite high. This should temper once the bank comes out of PCA and is able to build its asset book. The ROA at 0.46% is fairly attractive while the capital adequacy is comfortable at above 15% although expansion of loan book from these levels will require additional capital buffers.


Financial highlights for Jun-21 compared yoy and sequentially


Indian Overseas Bank
Rs in Crore Jun-21 Jun-20 YOY Mar-21 QOQ
Total Income ₹ 5,155 ₹ 5,234 -1.50% ₹ 6,074 -15.13%
Operating Profit ₹ 1,202 ₹ 1,094 9.84% ₹ 1,724 -30.29%
Net Profit ₹ 327 ₹ 121 170.64% ₹ 350 -6.61%
Diluted EPS ₹ 0.19 ₹ 0.07 ₹ 0.21
Operating Margins 23.31% 20.91% 28.39%
Net Margins 6.34% 2.31% 5.76%
Gross NPA Ratio 11.48% 13.90% 11.69%
Net NPA Ratio 3.15% 5.10% 3.58%
Return on Assets 0.46% 0.16% 0.50%
Capital Adequacy 15.48% 10.93% 15.32%

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