Indian Overseas Bank reports 58% jump in March quarter profit after tax

Chennai-based Indian Overseas Bank (IOB) reported a 58% jump in profit after tax (PAT) to Rs 552 crore in the quarter ended March 2022. The operating profit stood at Rs 1,614 crore in Q4FY22 against Rs 1,724 crore in the year-ago period. The net interest margin for Q4FY22 was 2.41% compared with 2.39% in the December 2021 quarter.

The bank posted 12% year-on-year growth in gross advances, which stood at Rs 1,55,801crore as against Rs 1,39,597 crore a year ago.

The bank is expected to continue on its growth trajectory even as the interest rate cycle has reversed aided by a well-diversified loan portfolio, Partha Pratim Sengupta, MD & CEO of Indian Overseas Bank, said in a press meeting.

The demand for retail loans is likely to continue going ahead as there is enough liquidity in the banking system as of now after the lender disclosed its results, Sengupta said. The liquidity situation is subject to future actions taken by the Reserve Bank of India, he cautioned. Additionally, salary hikes in some sectors of the economy may also lead to higher demand for retail and home loans, he said.

The lender expects 25 % growth in its bottomline going ahead aided by strong loan growth and improving asset quality. In the post-Covid period, there is good revival in the MSME sector, Sengupta said, which will help the bank maintain its 12 % loan growth.

Although the lender is not saying no to corporate loans, it has diversified its portfolio and is maintaining a cautious approach towards corporate loans.

On asset quality front, Indian Overseas Bank’s gross non-performance asset ratio improved to 9.82% in March 2022 from 10.40% sequentially and 11.69% a year ago. Its net NPA ratio increased marginally to 2.65% in March 2022 from 2.63 % sequentially and 3.58% a year ago. Provision Coverage Ratio (PCR) improved from 90.34% as on March 21 to 91.66% as on March 22.