State-run Indian Overseas Bank (IOB) has posted a 170 per cent increase in net profit during the first quarter of the current financial year ended on June 30 to Rs 327 crore, from Rs 121 crore during the same quarter in 2020-21.
Total income during the first quarter of 2021-22 was seen at Rs 5,155 crore, down marginally by 1.5 per cent from Rs 5,234 crore during the same period last year. The bank’s managing director and chief executive officer P P Sengupta said fewer provisions and more recovery mainly contributed to the rise in net profit. IOB's provision for bad loans and contingencies for the quarter under review dropped by 11 per cent from Rs 970 crore during the first quarter of the last financial year to Rs 868 crore during the April to June quarter of 2021.
The bank’s asset quality showed signs of improvement with its gross non-performing assets falling by 16 per cent from Rs 18,921 crore during the first quarter in 2020-21 to Rs 15,952 during the same quarter this fiscal. GNPA ratios improved to 11.48 per cent from I1.69 per cent in Q1 last year. Net NPA for the period under review dipped 34 per cent to Rs 3,998 crore during the current financial year. The bank said that its net NPA stood at 3.15 per cent, which is within the prescribed limit of the Reserve Bank of India. IOB’s provision coverage ratio was seen at 91.56 per cent.
Though IOB has seen slippages to the tune of Rs 1,158 crore, it saw a higher cash recovery of Rs 1,125 crore. This was compared to a cash recovery of only Rs 275 crore during the same time last financial year, he said.
Owing to a reduction in interest expenditure, the lender's operating profit rose from Rs 1,094 crore to Rs 1,202 crore during the period under review. During the quarter, the bank’s total business (including investment) increased by 8 per cent to Rs.4,78,365 croreas against Rs. 4,43,155 crore during the April to June quarter of 2020. The bank’s total deposits too saw a rise of 8 per cent in Q1 to Rs 242,941 crore from Rs 225,546 crore during the same period last fiscal.
The bank's CASA improved to 4l.63 per cent as on June 30 this year from 41.02 per cent in the same quarter in 2020-21. Total CASA also increased from Rs 92,514 crore last year to Rs 101,129 crore during the Q1 of this fiscal, SB (Savings Bank) registered 10.82 per cent year-on-year growth compared to last year.
Gross advances increased to Rs 1,38,944 crore as on June 30, 2021 from Rs l,31,565 crore during the year-ago period. The bank said it has evolved a policy of not taking fresh exposures in stressed sectors, below hurdle-rated accounts and BB and below rated accounts. The bank has also exited accounts in stressed sectors. During the quarter, the bank’s interest income saw a decline of 6 per cent, while non-interest income increased by 17 per cent.
Regarding Covid restructuring, Sengupta said, “We have done around Rs 4,300 crore of Covid restructuring, we are also planning to do another Rs 3,000 crore. We are expecting that most of the restructured accounts will be turning around.”