IOB Q1FY23: Net profit after tax increases 20% to Rs392 crore

8 Aug 2022 , 09:49 AM

Due to a significant decrease in provisioning needs, the state-owned Indian Overseas Bank recorded a 20% increase in net profit for the June quarter, coming in at Rs392 crore compared to Rs327 crore in the same quarter last year.

A crucial measure of profitability, its net interest margin (NIM), increased to 2.53% for the quarter.

Partha Pratim Sengupta, Managing Director, stated, "We will target to enhance NIM to 2.6% by the end of the year," adding that recovery from stressed assets will be crucial to improving the ratio.

Due to a mark-to-market provision of Rs340 crore on investments, the bank's operational profit for the quarter was lower than expected at Rs1,026 crore compared to Rs1,202 crore, Sengupta said.

Overall provisions decreased to Rs630 crore from Rs868 crore in the same period last year, principally as a result of lower provisions for bad loans in accordance with an improvement in asset quality.

The bank's gross non-performing assets ratio was 9%, down from 11.48% a year earlier. On the back of the recovery, it was able to reduce NPA by Rs1,000 crore. Net NPA ratio increased from 3.15% over the same period to 2.43%.

Provision coverage ratio for the bank was 91.86%.

To reach Rs1.64 lakh crore, its gross advances increased by 17.7% year over year. Sengupta stated that the bank will shortly start talks with investors and is trying to raise Rs1,000 crore in qualifying institutional placement to continue development.