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New Delhi: Indian Overseas Bank (IOB) on Friday reported a 25 per cent rise in net profit to Rs 625 crore in the September quarter on the back of a decline in bad loans.
The state-owned lender had posted a net profit of Rs 501 crore in the year-ago period.
Total income in the second quarter of the current fiscal rose to Rs 6,935 crore from Rs 5,852 crore in the same period a year ago, IOB said in a regulatory filing.
Interest income improved to Rs 5,821 crore for the quarter ended September 30 from Rs 4,718 crore in the same quarter a year ago.
Operating profit grew to Rs 1,677 crore in the quarter under review as against Rs 1,494 crore in the September 2022 quarter.
The Chennai-based bank's asset quality showed an improvement as gross Non-Performing Assets (NPAs) declined to 4.74 per cent of gross advances at the end of the September quarter from 8.53 per cent a year ago.
Similarly, net NPAs or bad loans declined to 0.68 per cent as against 2.56 per cent in the year-ago period.
The provision coverage ratio of the bank saw an improvement at 96.76 per cent from 90.94 per cent in the same quarter a year ago.
The Net Interest Margin (NIM) of the bank increased to 3.12 per cent in the latest September quarter as compared to 2.79 per cent a year ago.
On the NIM outlook for FY24, IOB Managing Director Ajay Kumar Srivastava said it would be anything above 3 per cent.
With regard to recovery, he said the bank has recovered Rs 1,069 crore in the quarter while the fresh slippage was contained at Rs 300 crore during the same period.
He said the bank expects a recovery of about Rs 5,000 crore during this financial year as some bigger accounts would come up for resolution before the National Company Law Tribunal later this year.